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Imperialism and nationalism in the Caribbean : the political economy of dependent underdevelopment in… Thakur, Rishee S. 1976

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BlPSRIALISM AND NATIONALISM IN THE CARIBBEAN: THE POLITICAL ECONOMY OE DEPENDENT U i m E R D E Y E L O P K E N T IN GUIANA by RISHEE S . THAEUR B.A., U n i v e r s i t y of A l b e r t a , 1972 ' A THESIS SUBMITTED IN PARTIAL PULPILY-PENT- GE THE REQUIREMENTS POR THE DEGREE OP MASTER C P A R T S i n t h e Department o f P o l i t i c a l S c i e n c e Me a c c e p t t h i s t h e s i s as c o n f o r m i n g t o t h e r e c m i r e d s t a n d a r d THE UNIVERSITY OP BRITISH COLUMBIA Spring, 1976 Rishee S. Thakur, 1976 In p r e s e n t i n g t h i s t h e s i s in p a r t i a l f u l f i l m e n t o f the r e q u i r e m e n t s f o r an advanced degree at the U n i v e r s i t y o f B r i t i s h Co lumb ia , I ag ree that the L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r r e f e r e n c e and s tudy . I f u r t h e r agree t h a t p e r m i s s i o n f o r e x t e n s i v e c o p y i n g o f t h i s t h e s i s f o r s c h o l a r l y purposes may be g r a n t e d by the Head o f my Department o r by h i s r e p r e s e n t a t i v e s . It i s u n d e r s t o o d tha t c o p y i n g o r p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l not be a l l o w e d w i thout my w r i t t e n p e r m i s s i o n . Department o f POLITICAL SCIENCE The U n i v e r s i t y o f B r i t i s h Co lumbia 2075 Wesbrook Place Vancouver, Canada V6T 1W5 Date April 20. 1976 i i ABSTRACT The p r e s e n t s t a g e o f t h e v a s t m a j o r i t y o f t h e p e o p l e s o f t h e t h i r d w o r l d i s c h a r a c t e r i z e d as e x i s t i n g i n v a r i o u s s t a g e s o f underdevelopment. Beyond t h a t , however, t h e r e does not appear t o he any o v e r r i d i n g consensus as t o how t h e y got t h e r e , o r perhaps more importantl;/", what combin-a t i o n o f p o l i c i e s a r e l i k e l y t o o b v i a t e such c o n d i t i o n s . C o n s e q u e n t l y , t h e r e has been a p r o l i f e r a t i o n of t h e o r i e s and p r e s c r i p t i o n s t h a t have r e s u l t e d i n v a r y i n g degrees o f s u c c e s s and f a i l u r e , w i t h o u t s u c c e e d i n g i n - a n y major way t o a l l e v i a t e t h e c o n d i t i o n s o f p o v e r t y and o p p r e s s i o n . The major problem w i t h such a t t e m p t s i s i n t h e i r " a l l - o r - n o t h i n g " approach'", c h a r a c t e r i z e d by t h e b e l i e f t h a t s p e c i f i c changes a r e e i t h e r a l l p e r v a d i n g i n t h e i r e f f e c t s o r , on the o t h e r hand, a r e not s i g n i f i c a n t enough t o w a r r a n t any p a r t i c u l a r d i s t i n c t i o n . The purpose o f t h i s s t u d y i s t o show t h a t s u c h an approach i s m i s l e a d i n g , F i r s t o f a l l , underdevelopment i s seen as t h e r e s u l t o f a s p e c i f i c form o f development t h a t has as i t s b a s i s t h e r e l a t i o n s h i p o f t h e advanced c a p i t a l i s t and t h e u n d e r d e v e l o p e d c o u n t r i e s o f the t h i r d w o r l d . S i n c e t h i s r e l a t i o n s h i p i s c h a r a c t e r i z e d by a h o s t o f i n t e r l o c k i n g arrangements i t i s necessary, t o comprehend them i n t h e i r t o t a l i t y , i f the p r o c e s s i s t o be u n d e r s t o o d a t a l l . I t s h o u l d i i i be immediately r e c o g n i z e d , however, t h a t though s p e c i f i c changes may not e f f e c t the s t r u c t u r a l c o n t i n g e n c i e s of the r e l a t i o n s h i p , they sometimes are of such s i g n i f i c a n c e t h a t they c o n s t i t u t e an important change. Such an a r t i c u l a t i o n of the problem has the d e c i s i v e advantage of n o t i n g and r e c o r d i n g the s p e c i f i c changes w i t h i n t h i s r e l a t i o n s h i p w h i l e r e c o g n i z i n g the a l l p e r v a s i v e e f f e c t s of i t s t o t a l i t y . The r e s u l t of such an i n v e s t i g a t i o n l e d us to the f o l l o w i n g c o n c l u s i o n s : ( l ) the r e c e n t change i n the a t t i t u d e of the advanced c a p i t a l i s t c o u n t r i e s has r e s u l t e d i n g r e a t e r f l e x i b i l i t y i n t h e i r d e a l i n g s with the underdeveloped count-r i e s . Most important, i n t h i s r e s p e c t , has been t h a t the "enclave economies" have been l a r g e l y r e l i n q u i s h e d . M u l t i -n a t i o n a l c o r p o r a t i o n s , a t the same time, have been w i l l i n g and. even c a l l i n g f o r l o c a l government p a r t i c i p a t i o n i n t h e i r a c t i v i t i e s . (2) Governments of the t h i r d w o r l d have demanded and subsequently a p p r o p r i a t e d g r e a t e r c o n t r o l of the l o c a l economy through p a r t i c i p a t i o n and even n a t i o n a l i z a t i o n o f key s e c t o r s . T h i s , i n a d d i t i o n , allowed f o r g r e a t e r maneuver-a b i l i t y on the so c a l l e d " i n t e r - i m p e r i a l i s t b a t t l e f i e l d " , w i t h the r e s u l t t h a t they can now a p p r o p r i a t e l y be d e s c r i b e d as j u n i o r p a r t n e r s o f the system. Thus", i m p e r i a l i s m and development are not c o n t r a -dictor}'" terms; i t i s simply t h a t dependent underdevelopment i s the new form of i m p e r i a l i s t c o n t r o l . i v TABLE OP CONTENTS CHAPTER Page 1 Introduction: Towards A D e f i n i t i o n of Imperialism . 1 I: Imperialism: An I n t e l l e c t u a l Problem .... 1 I I : L i b e r a l Democracy and i t s Defenders 4 I I I : Communist Orthodoxy 8 IV: Imperialism, "Unequal Exchange" and the Myth of Classlessness 14 V: Imperialism and the Structural Changes i n C a p i t a l i s t Development 27 2 The Limits of Nationalism 48 I: The Caribbean: An American lake 48 I I : Anglo-American Interests and Guyanese Nationalism 59 I I I : Nationalism and Guyana's Economy 75 3 Imperialism and Economic Nationalism 89 I: The Changing Character of Poreign Investments 89 I I : Poreign Capital and the Caribbean Economies 94 I I I : Bauxite, Alcan and Guyana's Economy 97 IV: Guyana's Economy and the Nationalization of DEMBA 136 Conclusion 163 Bibliography 168 LIST OF TABLES TABLE Page 1 D i r e c t American Investments i n L a t i n America "by Sectors. 91 2 P r i v a t e Investments Prom the United States i n L a t i n American by P r i n c i p l e Sectors. 91 3 Value of Domestic Exports of S p e c i f i e d Commod-i t i e s Showing Percentage of T o t a l Domestic Exports f o r Selected Caribbean Countries - 1961 .95? 4 P r i n c i p a l Operating S u b s i d i a r i e s and A f f i l i a t e s of Alean Aluminum L i m i t e d . 106 5 Export of Bauxite from Guyana a t Approximate Value With T o t a l Tax and R o y a l t i e s P a i d , 1917-1970. 108 6 Sales by Mining from Other I n d u s t r i e s f o r Guyana - 1959. 113 7 Purchases by Mining from Other I n d u s t r i e s f o r Guyana 1959. 114 8 A c t u a l Payments of Tax and R o y a l t i e s by DEMBA to the Government of Guyana- 1939. 118 9 H y p o t h e t i c a l Payments of Tax and R o y a l t i e s t o the Government of' Guyana - 1939., 119 10 Transfer P r i c e s and Taxes on Exports of Un-processed (Dried) Caribbean Bauxite. 124 11 P r i c e of Guyana Bauxite i n R e l a t i o n to United States and u - t n e r Caribbean Producers - I960 126 12 P r i c e of Guyana Bauxite i n R e l a t i o n to United States and Other Caribbean Producers - 1963 126 13 Average P.O.B. P r i c e of Bauxite Imported i n t o the U n i t e d States - 1953-1962. 128 14 P.O.B. Export P r i c e s of Dry Bauxite i n Guyana 129 15 Input-Output Table f o r Ton of Aluminum: Mining to Semi-Fabricating. 132 v i 16 V e r t i c a l Integration of Pour International Companies of Caribbean Bauxite - 1964. 133 17 Location of G.D.P. Created by Processing of Caribbean Metal-Grade Bauxite & 1964 134 18 L o c a t i o n of Input Demand Generated by Processing of Metal-Grade Bauxite - 1964 134 v i i • A CKHOW IEDGEMENT Many pe o p l e w i l l r e c o g n i z e t h e i r i n d i v i d u a l c o n -t r i b u t i o n s t o t h i s s t u d y . B u t , f o r t h e most p a r t , i t was a few non-academics who p r o v i d e d me w i t h t h e i r l e a r n e d r e s o u r c e -f u l n e s s t h r o u g h o u t the f o r m a t i o n and p r e s e n t a t i o n o f t h e p r i n -c i p a l i d e a s . My r e l a t i o n s h i p w i t h Horace Gopeesingh, G l e n P e r s a d and raj b r o t h e r s , Andra and V i d y a , a l l common pe o p l e w i t h tremendous f o r e s i g h t , t y p i f i e d t h e c o n s t r u c t i v e a t t i t u d e o f t r u e t e a c h e r s . S p e c i a l t h a n k s must be g i v e n t o David B a i and R i c h a r d P r u c h t f o r t h e c o u n t l e s s hours o f i n v a l u a b l e a s s i s t -ance. I n a d d i t i o n , t h e c r i t i c i s m s and s u g g e s t i o n s o f Tony Simmons and Roger Bowen were a c o n s t a n t s o u r c e o f encouragement. My s u p e r v i s o r , P h i l i p R e s n i c k , must bet commended f o r h i s c r i t i c i s m s and g u i d a n c e , w h i c h a l o n e e n a b l e d me t o see t h i s t h e s i s t h r o u g h i t s f i n a l f o rm. My t y p i s t s Joy and Ann deserve much more t h a n a c u r s o r y note o f a p p r e c i a t i o n f o r d o i n g t h e " s h i t work". l a s t , b u t perhaps most i m p o r t a n t , a s p e c i a l "Thank you!" t o Shannon, whose p a t i e n c e and s u p p o r t made i t a l l p o s s i b l e , d e s p i t e my many i d i o s y n c r a s i e s . CHAPTER ONE: INTRODUCTION: TOWARDS A DEFINITION OP IMPERIALISM I* Imperialism: An Intellectual Problem Lenin i n his famous, but now somewhat dated, pamphlet Imperialism. The Highest Stage of Capitalism: A Popular Outline. characterized the process of capitalist expansion i n the following terms: "Imperialism i s capitalism at the stage of development at which the dominance of monopolies and finance capital i s established", i n which the export of c|,pi:tal has acquired pronounced import-ance, in which the division of the world anions the international trusts has begun"i i n which the division of a l l territories of the globe among the ihiggest capitalist powers has been completed." What i s important to grasp i n the above i s that i t i s an attempt, a "relative and conditional" one at that, as Lenin himself recognized, to sketch the contours of the structural changes of capitalism as i t emerged from the long depression of 1873-1896, However, the ensuing debate seems to have produced more obsfucation, either as a result of f i d e l i t y to L e n i n or a v e r s i o n t o h i s t h e o r y , r a t h e r t h a n c l a r i t y and p r e c i s e f o r m u l a t i o n about t h e r e a l meaning of the s t r u c t u r a l changes i n c a p i t a l i s m . P a r t o f the problem i s due, i n l a r g e p a r t , to the o r t h o d o x y t h a t c h a r a c t e r i z e d M a r x i s t p o l i t i c a l economy f o r the b e t t e r p a r t o f t h e f i r s t h a l f o f t h i s c e n t u r y and w h i c h u n t i l t he 1960's showed v e r y few, i f any, s i g n s o f change. As Mandel n o t e d : "... a t t h e v e r y moment when t h e bank-r u p t c y o f t r a d i t i o n a l b o u r g e o i s p o l i t -i c a l economy becomes p l a i n , and when b o u r g e o i s economic'thought made i t s g r e a t p r a g m a t i c t u r n , M a r x i s t economic t h o u g h t , f a r f rom making a f r e s h l e a p f o r w a r d , i t s e l f e x p e r i e n c e d a p r a g m a t i c t r a n s f o r m a t i o n a t l e a s t i n the S o v i e t U n i o n and e v e r y m i l i e u dominated by the S o v i e t U n i o n . Prom b e i n g an i n s t r u -ment o f r e s e a r c h i n t o o b j e c t i v e t r u t h i t was degraded t o the r o l e of j u s t i -f y i n g a p o s t e r i o r i the p o l i t i c a l and economic d e c i s i o n s ? t a k e n by t h e g o v e r n -ment of t h e USSR". However, sometimes we a r e apt", perhaps t o o often", t o l o o k f o r s c a p e g o a t s r a t h e r t h a n t h e s o c i a l p o l i t i c a l and economic e x p l a n a t i o n s f o r t h e p r o c e s s o f h i s t o r y and t h e i n t e l l e c t u a l and o t h e r problems t h a t a r i s e from such developments. I t s h o u l d be r e c o g n i z e d f i r s t l y , t h a t academic i n s t i t u t i o n s b e f o r e and a f t e r t h e Second World War, were the p r e r o g a t i v e o f t h e few, w i t h t h e i r a t t e n d a n t i d e o l o g i c a l p e r s u a s i o n ; s e c o n d l y , t h a t l e f t p o l i t i c s was dominated by the workers-' movement", o r more p r e c i s e l y tre-de u n i o n i s m ; and f i n a l l y , t h a t much o f t h e p o l i t i c a l energy was sapped by t h e t r a u m a t i c events o f 3 the f i r s t half of this century: the F i r s t World War, followed a decade later by the crash of 1929 and the depression of the 1930*s and immediately succeeded by the Second World War and then', perhaps f i n a l l y , the vississitudes of the Cold War. This i s by no means an attempt to account for the development of Western intellectual history i n the 20th century. Suffice i t to say, however, that intellectual development i s part and parcel of the process of social, p o l i t i c a l and economic development. "(For) mankind always takes up only such problems as i t can solve: .since looking at the matter more closely, we w i l l always find that the problem i t s e l f arises only when the material conditions necessary for i t s solution already exist or at least are in the process of formulation." p We are not", however, about to provide an apology for the failure of Marxism to keep pace with changing histori c a l circumstances nor at the same time to find scapegoats for such failures. It i s intended rather to locate the d i f f i c u l t i e s and shortcomings of certain intellectual developments, which on the one hand, provided the rationale for reformism, vulgar economism and platitudes about the ine v i t a b i l i t y of histor-i c a l forces, and on the other suffered from the limitations of i,ts own social", and histori c a l circumstances. 4 I I . L i b e r a l Democracy and i t s Defenders One of the major consequences of the above has been the p r o l i f e r a t i o n of p o l i t i c a l and economic theories e x t o l l i n g the virtues of the l i b e r a l democratic state and i t s attempts to deal with the problems of development i n c o l o n i a l and post-colonial s o c i e t i e s . Professor Walt W. Rostow f o r example", i n h i s celebrated but now somewhat infamous pu b l i c -ation, The Stages of Economic Growth; A Non-Communist  Manifesto! 1 claims that: One extremely important version of the ploughback process has taken place through foreign trade. Developing economies have created from t h e i r natural resources major export indust-r i e s , and the rapid expansion i n exports has been used to finance the import of c a p i t a l equipment and to service the foreign debt during take-o f f . 4 I f i t were not f o r the i n t e n s i t y and i d e o l o g i c a l passion with which t h i s view i s held, i n turn determining i n so many respects the p o l i c y of governments of both the developed and the underdeveloped countries", the subsequent costs i n s o c i a l and human misery would, indeed, be the Archimedian point of 5 the court jester. A cursory glance at the h i s t o r y of the r e l a t i o n s h i p between developed c a p i t a l i s t countries and t h e i r economic appendages t e l l s a completely d i f f e r e n t story. I f as Professor Rostow claims, trade and export industries provide 5 the necessary capital for "take-off" towards self-sustained growth"^ then the economies of Peru and Mexico from the "bullion that was "carted-off" by the Spanish;^ of the Carribean, the north-east of Brazil and the Southern United States from the cotton^ sugar and tobacco they supplied 8 Europe; of India from the cotton spices and the riches of Akbar^ the Itoghul Emperor, siphoned off by the British;^ of Africa from the human cargo in slaves brought to labour in the plantation colonies of Europe and North America;"''0 etc. (the l i s t is legion) should have made them some of the most developed and therefore, perhaps some of the richest areas of the world. However, quite the contrary is the case? While forming the organizing centre for that accumulation of capital 11 which helped finance the industrial revolution, today most i f not a l l of these areas suffer from what commentators of one ideological persuasion or another refer to as less developed, underdeveloped, and third world to designate a state of social", political and economic destitution. Following Professor Rostow's rationalization i t would be the crowning irony of history that while the Kohinoor Diamond of Akbar, the Moghul Emperor, finally ended up in the Tower of London as part of the Crown Jewels, the Indians were abandoned to the slums of Bombay, Delhi and Calcutta, as a result of the total destruction of their indigenous way of l i f e . 6 Many have claimed, as Professor Rostow does not f a i l to do, that the conditions alluded to i n the above~i belong s t r i c t l y to the era of colonialism and now that the vast majority of the areas once under c o l o n i a l control have attained p o l i t i c a l independence and joined the family of nations, as independent p o l i t i c a l e n t i t i e s , underdevelopment i s a product of t h e i r own making, or at l e a s t so i n large part^ It i s t h e i r c u l t u r a l heritage"^ t h e i r r e l i g i o n , s o c i a l structure and general p o l i t i c a l attitudes that constitutes - " 1 2 the stumbling block towards development. What i s being denied of course", i s the material dimensions of h i s t o r y and the permanent relationships that are a necessary accessory to the process of c a p i t a l i s t development. The economic r e l a t i o n -ships of the developed c a p i t a l i s t countries and the areas they penetrated i n the heyday of colonialism are assumed to be temporary i n nature and whatever negative consequences they produced are viewed merely as aberrations of good intentions the "white mem's burden" misapprehended or the " c i v i l i s i n g mission" gone astray. Another staunch defender of establishment p o l i t i c a l and economic theory*,' Professor Joseph A. Schump#ter", main-tains that: (The) facts are scarcely i n dispute. And since they f i t into the picture and mode of l i f e which we have redognised to be the necessary products of capitalism", since we can grasp them adequately from the necessities of that mode of l i f e and industry, i t follows that capitalism is by its very nature anti-imperialist. Hence we cannot readily devise from i t such imperialist tendencies as actually exist, but must evidently see th^ m as alien elements, carried into the v/orld of capitalism from outside supported-,by non-capitalist factors from outside. ^ We agree. "lhe facts are scarecely in dispute"; not sur-prisingly though*, Professor Schumpeter does not provide any. What must be shown is that the industrialized economies no longer have need for the cheap products of India and Brazil, Saudi Arabia and Jamaica, Zaire and Chile", and that no manip-ulation results from the factors of industrial ownership. Further i t must be demonstrated that investments from the Industrialized nations do not unduly interfere with the process pf development, in terms of creating structural dislocations, enclave economies, and general dependence of those economies upon which i t so generously showers its blessings. It must show that the inequality and uneveness in development which exists, not only on a national scale but also regionally, is the product not of industrialization but of the dead-weights of colonialism. "These white washing sycophants of bour-geois economics"7 a s Marx called them, would have us believe that11 competition reduces the price of a l l commodities to the minimum cost of their production","^ when we know that the terms of trade, leaving aside the uneconomic manipulation of the factors involved, for the underdeveloped countries have 8 declined steadily, especially with the advent of capitalist 15 forms of production. I l l Communist Orthodoxy The foregoing^ however, should not be taken to be an endorsement of the obverse position which maintains that essentially, nothing has changed since the days of colonial-ism. Palme Dutt, for example, argues that: "The characteristic feature of the new governments was continuity with the old imperialist regime* The entire adminis-trative machinery of imperialism was taken over and carried forward. The same bureaucracy^ judiciary and policp of the old imperialist agents and servitors.. The same methods of repr-ession ... The vast assets, investment holdings and financial interests of imperialism in India were zealously protected, and the even flow of imperialist exploitation continued. This "nothing-has-changed" attitude has its origins in two, not wholly unrelated, theoretical misconceptions that contain grave implications for the development of the third world. Pirst',, on the economic level, the process of imperialism is seen as "decadent parasitism"!, which has as its driving force the "extraction of tribute" from the areas i t penetrate, 17 because of superior military and productive capabilities. ' Much of the shortcomings of this analysis, stems from its uncritical allegiance and fidelity to Marx and Lenin; who were much more concerned with the process of capitalist 9 development as the increasing expansion of the reproduction of the means of production in its "pure form" (Marx), and its "imperialist stage" (Lenin), rather than the relation-ship of capitalism with its non-capitalist variant. But even so", a close reading of Marx and Lenin does not bear out •"iff the above claim. While i t is certainly true that Marx had argued that capitalism "constantly throws in capital, 19 thirsting after exploitation and "abstinence", he never meant i t as a one way process, as many of his more popu&ar, 20 writings may seem to suggest. The process is nevertheless inherently uneven since the means of production and reproduction gravitate towards the centre of capitalism, while reducing the peripheral areas to a state of ossified underdevelopment. The phenomenon can best be understood by a reciprocal interaction of the centre and the periphery in which the power constellations of the centre are predominant. As a photograph of the world taken at a point in time", this model consists of a world metropolis (today the United States) and its governing class and its national and international satellites and their leaders ... that i s , taking a photograph of the slice of the world we get a whole chain of metropolises and satellites', which runs from the world metropolis down to the hacienda or rural merchant who are satellites of the local commercial metro-politan centre but in their turn have peasants as their satellites. 1 0 The process is accomplished, as Marx had noted with regards to India", by a total and wholesale destruction of the indigenous way of l i f e . The means was not simply British infantry or artillery, where and when the Indians resisted, but by the systematic innundation of the Indian market with the cheap cotton products of Manchester and Liverpool. British steam and Science uprooted over the whole surface of Hindostan, the Union between agriculture and manufactur-ing industries ... social organizations disorganized and dissolved into, their units thrown into a sea of woes', and their individual members losing at the same time their ancient form of c i v i l i z -ation and their2b,ereditary means of subsistence ... In other words, the British, by the destruction of the in-digenous handicrafts and "home Industries", did not simply effect the domination of the Indian economy and society as a result, but also produced the dependence of the Indian economy on Britain and the needs of British capitalism. More generally the argument assumes that local political and economic forces are simply a function of imperialist manipulation and no amount of internal changes can produce any significant transformation. Part of the difficulty, for such simplistic characterization, is the complex and contradictory nature of the relationship between a capitalist centre and its periphery. As Rosa Luxembi-ug noted the relationship was far from assuming any precise 1 1 configuration. "The general result of the struggle "between capitalism and. simple commodity production is this: after substituting commodity economy for simple economy", capital takes the place of simple commodity economy, non-capitalist organizations provide a fertile soil for capitalism, more strictly: capital feeds on the ruins of such organization, and although this non-capitalist milieu is indispensable for accumulation the latter proceeds at the cost of. their medium never-theless by eating i t up. Historically the accumulation of capital is a kind of meta-bolism between capitalist economy and those pre-capitalist methods of production with-out which i t cannot go on and which, in 2* this light, i t corrodes and assimilates." p The problem, or more precisely^ a partial answer, is to see that while the evolution of internal political and economic institutions are historically and logically connected to the structural contingencies of the external economic and political situation* the failure to industrialize, diversify and thus bring about the development of a truly independent economy, results not simply from the exploitation and domination of the indigenous economy, but also from the dependence of that economy and the forces created and maintained by the exigencies of the local political economy. Secondly, on the political level", nationalism is seen simply as a mechanism of obscuring the inherent interests of a national bourgeousie and its imperial counterpart. Ascendant classes of colonial societies are a manipulated 12 group,*'1' Capitalist expansion amounts to simply "the export 25 of social conflict of the capitalist countries;" ^  where the social and political dimensions of capitalism are reproduced in toto", and the process of so called decolonization merely shifts the hasis of control, i f at a l l . "The essence of neo colonialism is that the, state which is subject to i t is in theory, independent and has a l l the_. outward trappings of international sovergnity,. In reality its economic system and thus, its political policy is directed from outside." Such a vulgar economism and crass Machivellianism, however", negates the underlying consensus that is necessary for capitalist development. "(Any) theory must recognize that imperialism was as much a function of its victims collo-boration or non-colloboration of their indigenous politics, as i t was of European expansion. The expansive forces generated in industrial Europe had to combine with elements within the agrarian societies of the outer world to make empire at a l l practicable ... domination is only practic-able in so far as alien power is translated 07 into terms of indigenous political economy". More recently i t is claimed that nationalism, because of the subsidiary roles i t plays in international politics, is unable to effect any independent policies to extricate itself from the perennial oscillation of the machin-ations of super-power politics. The underlying assumption is a logical derivation of the economic analysis, which holds that i t is the vagaries of imperialism that are ultimately 13 r e s p o n s i b l e f o r t h e economic f o r m a t i o n s i n c o l o n i a l s o c -i e t i e s ' , and t h e r e f o r e the s o c i a l and p o l i t i c a l s t r u c t u r e t h a t r e s u l t from such f o r m a t i o n s . There i s no d e n y i n g the f a c t t h a t i m p e r i a l i s m i s i n l a r g e p a r t r e s p o n s i b l e f o r the p o l i t i c a l and economic i n s t i t u t i o n s o f c o l o n i a l and p o s t - c o l -o n i a l s o c i e t i e s . But t o deny t h o s e s o c i e t i e s any p o l i t i c a l and economic autonomy i s t o deny t h e p r o c e s s o f h i s t o r i c a l d e v e l -opment. The f a c t o f the m a t t e r i s t h a t t h e n a t i o n a l and com-p r a d o r b o u r g e o i s i e , as l e a d e r s o f the n a t i o n a l i s t movement', p r e s e n t e d themselves as champions o f n a t i o n a l l i b e r a t i o n w h i l e p u r s u i n g p o l i c i e s t h a t were n o t always i n d i r e c t c o l l u s i o n w i t h i m p e r i a l i s m . Much of t h e c o n f u s i o n on t h e p o l i t i c a l l e v e l , a r i s e s f r o m t h e much l a u d e d , but dubious a n a l y t i c a l approach", w h i c h argues t h a t s i n c e i m p e r i a l i s t c o n t r o l and d o m i n a t i o n i s , a l l p e r v a s i v e and s i n c e the m a j o r i t y o f the p o p u l a t i o n o f c o l o n i a l s o c i e t i e s l i v e i n t h e r u r a l a r e a s and s u f f e r from r e l i g i o u s s u p e r s t i t i o n and p o l i t i c a l conservatism', p o l i t i c a l l i b e r a t i o n i s n o t l i k e l y t o be f o r t h coming because o f the l a c k o f l e a d e r -s h i p and d i r e c t i o n . Such changes become p o s s i b l e o n l y t h r o u g h the i n t r o d u c t i o n o f s o c i a l and p o l i t i c a l c o n s c i o u s n e s s f r o m o u t -side', e i t h e r t h r o u g h a p r o l e t a r i a n vanguard o r an i n t e l l e c t u a l ""28 l e a d e r s h i p . But, s i n c e the p r o l e t a r i a t c o n s t i t u t e s o n l y a s m a l l m i n o r i t y i n c o l o n i a l s o c i e t i e s , and a l r e a d y e x i s t s as a 14 privileged class: (l) i t is doubtful whether i t is about to assume any such revolutionary leadership, since revol-utionary change poses a direct threat to the privileged position i t has acquired; ( i i ) leadership does not guarantee fundamental changes, since i t can easily be led down the path of reformism, as we have seen in the vast majority of cases in Latin America; and ( i i i ) leadership can easily be substituted for control and manipulation of the political process, since i t is easy to assert the disappearance of classes after the revolution without the corresponding adjust-ment in reality. However, since there have been no revolu-tions, or very few, which in any case can be explained away by extraordinary circumstances, we ought not assume that there have been any significant changes in the structural compos-ition of colonial societies. The necessary explanation, of course, is that the proletariat has failed to live up to its "historical mission". The problem, however, is not that there has not been any significant changes nor that the pro-letariat failed", but that the analysis itself le aves a lot to be desired. IV: Imperialism. "Unequal Exchange" and the Myth of  Olasslessness. Quite recently, the concept of "unequal exchange", as the theoretical foundations of a theory of imperialism, 15 has attracted much attention, ^  It has as i t s "basis the inequality that results from trade between the developed capitalist countries and the less developed countries of the third world. The argument", i n i t s bare essentials', assumes that " i f a l l the' factors of production in a competitive economy" that have a claim on the f i n a l product are mobile, then their individual rewards would be the same wherever and whenever they were employed", i.e. each factor would be rewarded according to their quantative inputs and their 30 relative values as established by a free competitive market. However, this i s far from being the case and the two most important factors of production stand on opposite sides of the economic spectrum - immobile labour and motile capital. Because of this immobility of labour, i t is unable to compete, on the basis of available s k i l l s and resources, to secure i t s "natural" share of the f i n a l product, since capital i s able to readily shift i t s resources to areas offering the most profitable returns. The mobility of capital, however, i s not universal. Since capitals are nationally owned they would tend readily to shift from foreign areas of investment rather than their home base. Thus", labour i n the home base would be able to extract i t s "natural" share, i f not more*, of the f i n a l product. The net result i s a progressive tend-31 ency of the r i s i n g organic composition of capital i n i t s home base, and a subsequent rise i n the price of commodities I6;< produced in those areas. On the other hand, given the mobility of capital outside its territorial "base and the immobility of labour in those same areas, labour is unable to demand and receive its natural share of the final product. Thus we would have a stagnation or lowering of the organic composition of capital and a consequent decrease or stag-nation of the prices of commodities produced. Given these differences in wages, based on the differences in the organic composition of capital, in a capitalist centre and its peri-phery, a natural inequality is inherent when products are exchanged. "It thus becomes clear that the inequality in wages as such, a l l other things being equal is alone the cause of inequality of exchange." When transformed to the level of international trade, the differences in the organic composition of capital, based on the inequality in wage rates, constitutes the central mechanism in the whole process of the development of under-development - "wages are the cause and external exploitation the e f f e c t E x t e r n a l exploitation, therefore, through the medium of international trade is the crucial element in effecting the continuous dependence of the local economy and "All imperialisms", as a result, "are in the last analysis, mercantile in character". 17' The solution for underdeveloped countries, there- " JLere rests in their ability to regulate their trading patterns and relationships with the advanced capitalist countries. The reason being, that the underdeveloped coun-tries are unable to effect any immediate and drastic changes in their organic composition of capital and thus their wages rates, which would have the desired effect of raising the prices, of their products in international trade. There are three possible courses of action open to underdeveloped countries: (l) The establishment of a world wide tax on imports from the underdeveloped countries entering the advanced capitalist countries. This would have the effect of raising the prices of such commodities above and beyond their "normal" price. The difference would then be returned to the under developed countries in the form of a rebate earmarked for particular development projects, or the national government > for its normal budgetary problems or special development funds, (i i ) The removal*, or at least a reduction in tariffs, and other indirect means of raising the prices of products from the underdeveloped countries, which would make such commodities much more attractive to consumers of the advanced capitalist countries. The functioning of both these mechanisms, however, is voluntary, and while the first may produce some positive results i f and when instituted, the second in no way 18 guarantees a greater return to the underdeveloped, countries, *t also has the added disadvantage of making the vast majority of underdeveloped countries more dependent on a few export commodities and the fluctuations of an international market, since there are no guarantees of price levels. The only other option open to the underdeveloped countries is in the imposition of an export tax on a l l commodities leaving their ports. If wages cannot "be raised, either in the country generally or selectively in the export sectors, the only means left to these countries for preventing the excess surplus value from draining away abroad through unequal exchange is to make up for the inequality in the rate of surplus value by imposing a tax on exports."' This is the only fool-proof scheme available to the under-developed countries, whereby they can improve not only their deteriorating terms of trade but also end the process of "unequal exchange". On the other hand, internal changes through nationalization and/or expropriation results in further deterioration since this would mean an end of royalty payments and competition among different nationalized enter-prises would reduce the international price of commodities to the actual cost of production1, thereby resulting in further erosion of the underdeveloped countries terms of trade', resurrecting the old process of "unequal exchange".^ 19 On t h e p o l i t i c a l l e v e l t h i s argument reduces i t -s e l f t o ( l ) I m p e r i a l i s m i s n e c e s s a r i l y a r e l a t i o n s h i p between and among n a t i o n s where t h e r e i s no room f o r d i f f e r e n t c l a s s e s and g r o u p s . P o l i t i c a l s t r a t e g i e s , t h e r e f o r e , must assume a n a t i o n a l i s t c h a r a c t e r , i f i t i s t o r i d i t s e l f o f the n a t i o n a l e x p l o i t a t i o n t o w h i c h i t i s s u b j e c t e d . "The c l a s s i s not a f o r m o f i n t e g r a t i o n t h a t t a k e s precedence over the n a t i o n ; t h i s i s proved by t h e f a c t t h a t w e s t e r n w o r k i n g c l a s s a p p r o p r i a t e s t o i t s bene-f i t p a r t o f t h e p r o f i t s o f e x c h a n g e w i t h t h e u n d e r d e v e l o p e d c o u n t r i e s " . (11) Marx l i v e d an i l l u s i o n i n c a l l i n g f o r t h e w o r k e r s o f a l l c o u n t r i e s t o u n i t e . The w o r k i n g c l a s s o f t h e developed c a p i t a l i s t c o u n t r i e s a r e " o b j e c t i v e l y " t i e d t o the e x p l o i t -a t i o n o f t h e u n d e r d e v e l o p e d c o u n t r i e s . "... t h e r e l a t i v e i m p o r t a n c e of t h e n a t i o n a l e x p l o i t a t i o n from w h i c h a w o r k i n g c l a s s s u f f e r s t h r o u g h b e l o n g i n g t o the p r o l e -t a r i a t d i m i n i s h e s c o n t i n u a l l y as compared w i t h t h a t from w h i c h i t benefits.-.through b e l o n g i n g t o a p r i v i l e g e d n a t i o n , a moment comes when t h e aim o f i n c r e a s i n g t h e n a t i o n a l income i n a b s o l u t e terms p r e v a i l s o v e r t h a t o f i m p r o v i n g t h e r e l a -t i v e s h a r e o f one p a r t o f the n a t i o n o v e r t h e o t h e r . Prom t h a t p o i n t onward t h e p r i n c i p l e o f n a t i o n a l s o l i d a r i t y ceases t o be c h a l l e n g e d i n p r i n c i p l e ' , however, v i o l e n t and r a d i c a l t h e s t r u g g l e o v er t h e s h a r i n g o f t h e cake may be. T h e r e a f t e r a de f a c t o u n i t e d f r o n t o f t h e w o r k e r s and c a p i t a l i s t s o f the w e l l - t o - d o c o u n t r i e s d i r e c t e d a t t h e poor n a t i o n s , c o e x i s t s w i t h an i n t e r n a l t r a d e - u n i o n s t r u g g l e o v er t h e s h a r i n g o f t h e l o o t " . 20 First of a l l , Emmanuel's argument that exploit-ation occurs between nations and not classes i s of dubious analytical and conceptual validity. The concept of exploit-ation to begin with i s a designation of the economic relations between classes and their rewards on the " f i n a l product" of capital, labour and technology. "Exploitation" therefore, "expresses a production r e l a t i o n " ^ 0 and not an exchange one, though i n this case the exchange relation is a necessary accessory to the production relation and as a result deter-mines the particular form that i t (exchange) assumes. How this i s transformed to the level of the state i s d i f f i c u l t to comprehend, since this would necessarily mean classifying colonial societies, indeed a l l societies, as homogeneous units with minor^: i f any, variations i n social and p o l i t i c a l composition. Nationally, therefore", the concepts of class and power relationships are superfluous since they hide the inherent unity of interests of particular nationalities. If such assumptions are true one i s l e f t at a loss to account for the disparities in wealth, inequalities of opportunities, distribution of power, changes i n occupational structure, social and economic composition of different groups and the general stratifications of society", not as differences between nations but within thern.'^ "'" Emmanuel", however", insists that "Exploitation i s not a fact of production "but of appropriation"".'"'"'^  and goes on to argue with Gunder Frank, that this is so because there is not one, but in fact several capitals, which are involved in the process of production, circulation and ex-change and which appropriate their individual share of the final product.*^ It is difficult", however, to see several capitals in an age of multinational corporations (MNCs), where for a l l intents andfparposes the process of production, distribution and exchange have a l l been verticals/integrated, • Perhaps, more importantly, circulation is not an independent variable but a dependent one and cannot exist", therefore, without the specific form of production, since i t is the latter that calls i t into being. "The process of circulation is a phase of the total process of reproduction. But no value is produced in the process of circulation and therefore no surplus value ... i f a surplus value is realized in the sale of produced commodities then this7is "because i t already existed in them. Secondly", i t is becoming increasingly difficult to sustain the argument that " a l l imperialisms, in the last analysis, are mercantile in character", in light of recent developments. A recent study by the Social and Economic  Council of the United Nations, on Multi-national corporations  in World Development, showed that a substantial part of the exports of particular commodities from underdeveloped economies originate from the foreign a f f i l i a t e s of MNCs. Por example, i n Latin America: Their share i n the total exports of manufacture from these regions, which was 12 percent in 1957 reached 41 per cent i n 1966. This share varies by country;, thus in Argentina, between 1965 and 1968", exports of United States a f f i l i a t e s account-ed for 14#5 percent of total exports. In Mexico, i n 1966, United States manufact-uring a f f i l i a t e s accounted for 87 percent of exports of manufactures and i n Brazil they represented 42 percent. Moreover, this i s not trade between individual nation states but represents to a large extent, trade between a f f i l i a t e s and parents of MNCs* A recent GATT study, for example, placed 30 percent of a l l world trading between and among 4.8 a f f i l i a t e s of multinational corporations. Now, i t i s d i f f i c u l t to see how imperialism can be reduced to mercantil ism when so much of world trade i s controlled not by nations but by MNCs and their foreign a f f i l i a t e s . Consequently, one cannot speak i n terms of "Unequal Exchange" and properly assess the values transferred, when a major portion of i t i s 49 "transacted outside the sphere of any market". "Now", since so much trade takes place within international firms, i t may ts£ke place at bogus transfer prices. Where, as i n the case of o i l , for example, one branch of the firm sells goods to another branch i n a different country, the prices of these sales can be manipulated i n l i e u of esp i t a l move-ments and the firm can locate i t s income 2 3 and so take i t s profits i n whichever country i t wishes. So charging a low transfer price for raw materials pro-duced i n one country and exported to another within the same firm,' may he financially equivalent to charging a high price and then repatriating the profits. This i s one reason why the theory of unequal exchange has to he incorporated into the aspects of the theory of imggrialism which deal with investments. Lastly, the UN study referred to above, estimated that "International production^ defined as production1 subject to foreign control or decision and measured by: the sales of foreign a f f i l i a t e s of multinational corporations has surpassed trade as the main vehicle of international economic exchange ... international production reached approximately $330 b i l l i o n i n 1971. This was some what larger than total export ofr-all markfet economies ($310 b i l l i o n ) . 5 1 Further",' in the same study and elsewhere, i t has been demon-strated that the production of subsidiaries of MNCs have i n -creasingly been i n the area of import substitution, i n order to evade the imposition of tax on imports and other t a r i f f 52 barriers erected to protect local industries. The end result", of course, i s a further decline i n the volume of trade. The only conclusions to be drawn from this are (l) that imperialism i s i n decline, since trade i s no longer the primary medium of obtaining and transferring goods and 24 services; or ( l l ) a l l imperialisms are not mercantile in character", since surplus and profits can he extracted by-other means, as well. With regards to Emmanuel's solution, there is no doubt that the imposition of an export tax on a l l commodities leaving the ports of an underdeveloped country will raise the price of these commodities', and therefore increae the financial benefits accruing to the nation. The case of the Arab o i l increases is", of course, the classic example. "But" as Johan Galtung noted', "this is only "bargaining within An old pattern - "53 not a change of international structure." There are no guarantees that such financial gains would be used to diversify and develop the local economy nor be redistributed to benefit the majority of the people. As a matter of fact, the situation is not very different from that suggested by Emmanuel. While there is the transfer, of some U.S. and Eurodollars in the form of industrial plants to the Arab States", "the vertical division of labour survives". This has two distinct disadvantages. On the one hand", since the factors of industrial ownership can be easily manipulated, the dependency of the underdeveloped country is thereby further exacerbated a n Q o n ^ e other, the economy of the under-developed country becomes increasingly integrated into the needs and demands of the foreign firms", which control the 25 necessary industrial factors for development. As Galtung noted, even i f the Arab States were swamped with industrial plants, which i n any case i s highly unlikely*^ this would not radically alter the terms of exchange, " ••• vertical division of labour i s main-tained, both i n the f i e l d of capital (center provides investment', periphery provides market); i n the field.of labor (center provides know-how, research'^ periphery proyides unskilled lajaor) some of i t lo c a l l y , i n the periphery, some of i t as Fremdarbeiter i n the center; and i n the ! ,land f factor (periphery providing goods at a much lowertrlevel of process-ing than the center). The transfer of such currencies, nevertheless, constitutes an important change. It not only allows for greater man-euverability by the underdeveloped country, within the frame-work of imperialism", but also means the further deepening and, therefore^ strengthening of the process of capitalist devel-opment. This results on the one hand, i n greater local auton-omy", but"", on the other, assures the continuity of the unequal partnership. s On the p o l i t i c a l level", we have already argued that imperialism", essentially an exploitive relationship", i s not a relation between nations'", but between competing social classes. The claim on the "final-product" i s thus not only a material one, but a political-ideological one as well - the claim to a l l important p o l i t i c a l power,1 The recent history of decolonization has sufficiently demonstrated that nation-2 6 alist movements are either unwilling or unable to effect the necessary changes for an independent nationalist development. The case of the Caribbean is very instructive. Political decolonization occured precisely at the moment when radical nationalists", who opposed the stranglehold of their economies, were either made to compromise their nationalism or were forcibly subdued. Nationalism, or what was left of i t , was thus not only a means of guaranteeing a continuation of the exploitive relationship', but", in addition, was used as a fa.cade to obscure the inherent contradictions of colonial societies. The present crisis of underdevelopment shows only too harshly the limits of such nationalism. It has failed in every important respect to deliver the promised goods. ThUs is precisely the shortcoming that Emmanuel's illusory solution hides. "... the inequalities of development seem to be capable of 'correction' through manipu-lation of prices and wages, whereas only a revolutionary transformation of production relations with the subsequent development of the productive forces*, can make i t possible to end the poverty of the peoples of the dominated countries, who are exploited at one and the same time by imperialism ana"" their own dominant classes." The question is not simply one of correcting a certain im-balance, but of 27 changing the entire foundation of the re l a t i o n s h i p ; a re l a t i o n s h i p which takes i t s cue not from a p a r t i c u l a r system of exchange "but from a system of production already estab-l i s h e d . V: Imperialism and the Structural Changes i n O a p i t a l i s t  "Development The concept of Imperialism however, has seen better days and much has been said r ecently to resurre&t it'from the 56 dogmatism of party p o l i c y and the aversion of i n t e l l e c t u a l s . In addition to what has already been said let. me record very schematically, what I consider to be the central features i n the changing r e l a t i o n s h i p between the advanced c a p i t a l i s t countries and the underdeveloped countries of the 57 t h i r d world. The very use of the term imperialism, when accepted as a v a l i d conceptual and a n a l y t i c a l category, conjures d i f f e r -ent dimensions of p o l i t i c a l economy to d i f f e r e n t people. The f i r s t task, therefore, i s to a r t i c u l a t e the necessary para-meters of p o l i t i c a l economy encompassed by the use of the term imperialism, begin with, the term implies three d i f f e r e n t , inherently and l o g i c a l l y r elated, sets of categories and re l a t i o n s h i p s , a l l r e l a t i n g to the development of capitalism and the states of l e v e l s of development of the productive forces i n d i f f e r e n t areas of the world. This model was succ i n c t l y 28 stated by Bob Sutcliffe in his Conclusion to Studies in the  Theory of Imperialism. (a) The development and the economic and class structure of advanced capitalist societies (especially the factors which drive them towards geographical expan-sion of their economies) and the relations between them; (b) the economic and political relations between advanced nations and backward or colonial nations within the world capitalist system; (c) the development of economic and class structure in the more backward nations of the capitalist system, especially the roots of their dominai^on and their failure to industrialize. The f i r s t refers to iahat Marx described as "the expansion in the reproduction of the means of production" and what Lenin described as a special stage in the development of capitalism; "Imperialism emerged as the development and direct continuation of the fundamental ,-q characteristics of capitalism in general". In this process there are constant and continuous attempts by national capitals to dominate and gain control of the most lucrative sources of raw materials and resources for the extraction of surplus value. This enables such capital to gain ascendancy by further accummulation, while, at the same time, denying their competitors access to such sources. The resulting competition, as Lenin argued, constituted the fund-amental contradiction in imperialism which would eventually lead to inter-imperialist riv-alries. That this is no longer the case, has been sufficiently demonstrated by the experience 2 9 o f h i s t o r y , e s p e c i a l l y a f t e r the Second World War wit h the f o r m a t i o n o f a " S o c i a l i s t " b l o c . However, t h i s does not mean t h a t c a p i t a l i s m operates i n u n i t y or t h a t a l l n a t i o n a l c a p i t a l s a re i n a l l i a n c e when c o n f r o n t e d by c r i s i s s i t u a t i o n s . S u f f i c e i t t o say, a t t h i s time, t h a t the so c a l l e d " u n r e s o l v -a b l e c o n t r a d i c t i o n " has been l a r g e l y superceded and the r e l a t i v e l y autonomous s t a t e s o f advanced c a p i t a l i s t c o u n t r i e s have stepped i n a t c r u c i a l j u n c t u r e s to r e s o l v e d i f f i c u l t i e s i n v o l v i n g d i f f e r e n t n a t i o n a l c a p i t a l s . There has been however, e s p e c i a l l y by the mid 1960's w i t h the r e c o v e r y o f Europe and Japan, an i n t e n s i f i c a t i o n o f competing c a p i t a l s , but wit h an 60 i n h e r e n t c o m p a t a b i l i t y o f i n t e r e s t s . The second r e l a t i o n s h i p r e f e r s t o t h a t between the advanced c a p i t a l i s t c o u n t r i e s and the areas o f the t h i r d world i t p e n e t r a t e s i n i t s s e a r c h f o r accumulative s o u r c e s . T h i s seems the most popular c o n c e p t i o n o f i m p e r i a l i s m , o r , a t l e a s t , what most commentators mean when the term i s employed. I t has as i t s b a s i s the a p p r o p r i a t i o n o f s u r p l u s v a l u e through the medium of investments and the e x t r a c t i o n of s t r a t e g i c raw m a t e r i a l s a t v e r y minimal c o s t s . O r i g i n a l l y * most o f t h i s investment was i n the a r e a of raw r e s o u r c e s , t y p i f i e d by o i l and m i n e r a l ore d e p o s i t s , where f o r a l l i n t e n t s and purposes they e x i s t e d as " e n c l a v e s " w i t h few, i f any, l i n k s w i t h the r e s t o f the economy. The term "enclave", however, i s a misnomer, s i n c e i t was p r e c i s e l y such investments t h a t produced 30 structural dislocations in the local economy, "by an increasing displacement of the traditional sectors without providing adequate substitutes. Such investments, at the same time, created the dependence of the local economy, since, in most cases, i t was the only provider of long term "wage" employment and, perhaps, more importantly, the only source of foreign 62 exchange. Much of this, however, has changed over the last decade and there has been a pronounced shift i n investment patterns, allowing for greater local autonomy through partner-ship ventures and in cases outright nationalization by local 63 governments. As already noted above, this does not result in a drastic change in the structural relationship between advanced capitalist countries and the underdeveloped countries of the third world. It is simply indicative of the changing nature of colonial societies. It is also reflective of the fact that the structure of dependent capitalist development has been finally and firmly established, leaving the advanced capitalist countries reasonably certain that such changes would not put an end to the supply of strategic raw materials, even i f i t means higher prices. What i t means, simply, is a further deepening and, therefore, strengthening of the process of capitalist development.^ The third point refers to the state of social, political and economic underdevelopment, in which the indig-enous political economy necessarily finds itself, after the • 31 process of domination and dependence have been firmly estab-lished. The situation results from the economic drain of its surplus, to which the underdeveloped economy has been subjected. It, is also indicative of the extent to which its development has been distorted by the implantation of the subsidiaries of MNGs whose only concern has been the mobilization of whatever local capital is available for its 65 own use. "The degree of mobilization of resources by US owned subsidiaries is suggested by the fact that for every dollar of capital transferred from the United States to these subsidiaries in the less developed countries, about $4 more of capital were collected by the subsidiaries from other sources, including sougges internal to the less-developed areas". This process increased the domination of the local economy by cornering and monopolizing its limited capital market. Further, i t is estimated that while between I960 and 1968 an average of one billion dollars of fresh capital was being transferred annually to the subsidiaries of US based MNCs in the third world, there was a reverse flow of two and one half billion dollars annually, in income alone. Internally generated capitalist development, at the same time, literally breeds a new class of petty and comprador bourgeoisie, whose fortunes become more or less dependent on the capitalist forms and whose defense, therefore, becomes paramount. This com-32 bination naturally perpetuates and further deepens the process of dependent underdevelopment,1 Por our purposes, the most important feature i n imperialism i s the relationship between advanced capitalist countries and the underdeveloped countries of the third world. The most dramatic and far reaching change, to have occured in this relationship has been in the area of foreign investments, through the medium of and i n conjunction with", the rise of MNCs as the most important agency i n determining 68 the nature of such investments. The leader in this process of course, has been the US and US based MNCs; who after the Second World War emerged as the leading imperialist power, having uncontrolled dominance i n the f i e l d of foreign invest-ment, and at the same time assuming the role of global police-go man. Much, however, has changed since the end of the Second World War, and with i t the relative decline of the US as the world's leading imperialist nation. This resulted from three different factors: ( l ) The successful recovery of Japan and Europe by the 1960fs enabled themtto successfully compete with the US, to the extent that by 1972, for example, Japan was recording a trade surplus with the US of nearly three b i l l i o n d o l l a r s . 7 0 ( i i ) The "global strategy" of the US to contain communism and prop up insolvent governments of the third world was putting a severe strain on i t s economy; and ( i i i ) the successful challenge of the Us i n Indochina and the ri s i n g tide of national liberation movements in the third world have been sufficient warning that these nations no longer toler-ate the strangle-hold of their societies.*^2 "Under these conditions two things have happened: (l) the other imperialist powers have had fair warning that they can and must widen their margin of aut-onomy, both economically and politically. And (2) the dependent bourgeoisie and the national dependent states they control are beginning to understand that they have considerably greater freedom to man-euver on the inter-imperialist battle field, with the result that they are pressing for new advantages, for more flexible economic ties, and for new political alliances. The result has been a greater accomodationist spirit on the part of MNCs and their subsidiaries in the under-developed countries'!,' allowing for greater local participation and control. ?he Vice-president of the Chase Manhattan Bank, for example, addressing a group of African industrailists in 1 9 7 1 , called on US companies to accept "meaningful participa-tion through government purchase of 51% of shares of the big corporation". A year earlier, in Peru", after the military junta had systematically nationalized most of the foreign based subsidiaries of MNCs, General Velasco announced that foreign investment would be allowed in Peru only in the form of investment contracts with the state, for a fixed term ranging from fifteen to twenty five years for recovering the investment and obtaining reasonable profits after which ownership of the res- 7 c peetive companies would revert to the state. 34 In another instance, B i l l Warren found that while only 8 percent of the 236 manufacturing subsidiaries of MNCs i n Africa (except South Africa) Asia (Except Japan) and Latin America were minority owned before 1946, between 1958-1964 of the 1,013 subsidiaries established i n the same areas, 76 minority ownership had increased to about 20 percent or 189. In conjunction with this changing pattern of owner-ship, there has taken place'a drastic change i n the pattern of investments, from the traditional resource based sector to the 77 more important manufacturing sector. This, as noted earlier, resulted from the need to evade import taxes and t a r i f f barriers and at the same time, taking advantage of regional markets established through free trade associations (Caribbean Free Trade Area, Andean Pact*, etc.) and low wage rates. Other i n * centives were provided by local governments, who i n the absence of local investment capital, offered tax holidays, nominal rental charges for serviced industrial sites, guarantees of labour s t a b i l i t y and uncontrolled repatriation of profits. In Jamaica, for example, Under the terms of the"'Pioneer Industries (Encouragement) Lav/ 1949 the investor i s allowed during each of five years during the f i r s t eight years of operation to set off one f i f t h of permitted capital expend-itures against income derived from pion-eering manufacturing operations. In addition, the manufacturer i s allowed to import free of customs duty and tonnage tax a l l building materials, tools, plant and machinery etc. used i n construction, extensioiwjr equipment of the pioneer industry. Such inducements have been repeated countless times, with more alluring incentives, resulting, especially over the last decade or so, in a proliferation of manufacturing subsidiaries in the third world; to what extent such initiatives can lead to independent industrial development is altogether another matter. Because the underdeveloped nations continue to exist within the orbit of the imperialist market economy, they are forced to depend on: (a) The market mechanism of the MNCs because of the monopolistic control they exercise over the markets, centres and means of distribution; (b) Technology which must be purchased from the industrialized nations — one that is more likely to be the exclusive domain of particular enterprises; (c) Loans for the development and expansion of local national enterprises, which are only obtainable in the international centres of business and finance and controlled by the industrialized countries; (d) Continued assistance in the form of aid, which is not likely to be made available i£ the local government were t© prove recalcitrant; (e) Trade for essential machinery, foodstuffs and energy, which can easily circumvent and strangle the local 36 economy by means of an embargo. The l i s t i s by no means complete, but contains, I think, the core elements of the dependent development to which 7° such i n d u s t r i a l i z a t i o n leads. Of greater immediate concern, however, i s the extent to which MNCs have used t h e i r f i n a n c i a l and organiza-t i o n a l strength to manipulate key sectors of the economies of the underdeveloped countries. By s t r a t e g i c a l l y s i t u a t i n g i n d u s t r i a l s i t e s away from the resource areas, they not only created further dependence on a regional basis but assumed the ro l e of mediator and c o n t r o l l e r of regional development. At the same time MNCs have used p a r t i c u l a r countries, noted f o r t h e i r protection of foreign investments, as regional head-quarters f o r t h e i r a c t i v i t i e s , thus producing what has been described as "sub-imperialism". 3 7 FOOTNOTES 1. L e n i n , V . I . Imperialism. The Highest Stage of  C a p i t a l i s m : A^Popular O u t l i n e . C o l l e c t e d Works, V o l . 22, (Progress P u b l i s h e r s , Moscow, 1964) pp. 266-267. 2. Mandel, E, M a r x i s t Economic Theory, 2 V o l s . ( M e r l i n P r e s s , London, 1962; V o l . 11, pp. 723. 3. Marx, K a r l . Preface t o a C o n t r i b u t i o n t o the  C r i t i q u e o f P o l i t i c a l Economy ( I n t e r n a t i o n a l ^ L i b r a r y P u b l i s h i n g Company, ^ew York, 1904) pp. 12-13. 4. Bestow, W.W. The Stages of Economic Growth: A Npn-Communist Mani f e s t o (Cambridge U n i v e r s i t y Press, Mass. I960; p. 48. 5. No pun or p l a y on words i s intended as P r o f e s s o r Bestow was P r e s i d e n t Johnson's South-East A s i a n A d v i s o r 6. Rostow, W.Wi The Take-Off Into S e l f - S u s t a i n e d Growth i n Agarwala, A. and Singh, S. (eds.) The Economics of  Underdevelopment (Oxford U n i v e r s i t y P r e s s , London, " 1958; pp. 154-186. 7. Galeano, E. Open y i e n s of L a t i n America (Monthly Review Press, New York, 1973; E s p e c i a l l y p a r t 1 Chapter 1 pp. 21-70. 8. W i l l i a m s , E. C a p i t a l i s m and S l a v e r y ( C a p r i c o r n Books, New York, 1966; A l s o Genovese, E.: The P o l i t i c a l  Economy of S l a v e r y (Pantheon Books, New Xork, 1965) 9. Marx", K a r l . A r t i c l e s on I n d i a and the East I n d i a Company i n On C o l o n i a l i s m and M o d e r n i z a t i o n , ed. by A v i n e r i , S. (Anchor Books, flew xork, 1969; 10. Rodney", W. How Europe Underdeveloped A f r i c a . (Tanzania P u b l i s h i n g Mouse, Bar es Salaam, 1972;. ~"~ 11. Marx, K a r l . C a p i t a l . V o l . 1. Chapter x x x i ( i n t e r n a t i o n a l P u b l i s h e r s , -New York, 1967), "The d i s c o v e r y o f g o l d and s i l v e r i n America, the e x t i r p a t i o n enslavement and en-tombment i n mines o f the a b o r i g i n a l p o p u l a t i o n , the b e g i n n i n g o f the conquest and l o o t i n g o f the East I n d i e s , the t u r n i n g o f A f r i c a i n t o a warren f o r the commercial h u n t i n g o f b l a c k - s k i n s , s i g n a l i z e d the r o s y dawn o f the era o f c a p i t a l i s t p r o d u c t i o n ... the c o l o n i a l " s y s t e m r i p e n e d , l i k e a hot-house, t r a d e and n a v i g a t i o n . "The 38 Societies" monopolia of Luther were powerful levers for concentration of capital. The colonies secured a market for the budding manufacturers and, through the monopoly of the market, an increased accumula-tion. The treasures captured outside Europe by undisguished looting, enslavement, and murder, floated back to the mother country and were there turned into capital." op. c i t . pp. 750-754. 12. The literature that asumes this ideological position is quite extensive, and will take us too far afield to attempt any systematic review. Suffice i t to say that the most popular appears to be: Almond, G.A. and Coleman, J. (eds.) The Politics of Developing Areas (Princeton University Press, %w Jersey, 1$60). Almond, G.A. and Verba, S., The Vivi-c Culture (Little, Brown and Company, Boston, 1963) Anderson, O.W., Von Der Meheden, P.R. and Young, C. Issues of Political  Development (Prentice Hall Inc., Englewood Cliffs, New Jersey, 1967) Pickett, Jr., ,L.P. Problems of the  Developing Argas. (Thomas Y, Crowell Company, New York, 1966; Kebschull, H.G. (ed.) Politics in Transitional  Societies: The Challenge of Change in Africa. Asia and Latin America (Appleton-Century-Crofts, Meredith Corporation, New York, 1968) Lerner, D. The Passing of  Traditional Society Modernizing in the Middle East. (.The Free Press, New *ork, 1958J. It is interesting to note, at the same time, that Almond and Verba (Civic Culture) argues that i t is precisely the inculcation of political attitudes that forms the basis of development in industrialized societies. However, one does not have to look very far to see that the process of political socialization, which Almond and Verba so extolls, results in ideological confirmity through attribution and induction. 13. Schumpeter, J.A. Imperialism and Social Classes (Merid-ian Press, New York, 1955), p. 72.; See also his Capital ism Socialism and Democracy". (Harper and Row, New York, 1942; pp. 49-54. 14. Marx, Karl. Speech on the Question of Free Trade in Marx, K,, and Engles, F. Articles on Britain. ('Progress Publishers, Moscow, 1971), p. 85. 15. Prebisch, R. Change and Development - Latin America's  Great Task: Report Submitted^'to the Inter-American.  Development Bank (.Praeger Publishers New York. 1971). 39 Chapter 3 "External factors Hampering Development" pp. 48-84. See also Balogh, T, The Economics of  Poverty. (Weidenfeld and Nicholson,., London, 1955<) Especially chapter v i i i pp. 111-126. 16. Butt, R.P. The Crisis of Britain and the British  Empire (Lawrence and Wishart, London, 1953.J, P. 195. Also, Nkrumah. K., Neocolonialism the Last Stage of  Imperialism. (Heinemann Educational Books, Ltd., London, i m y r — 17. Butt, op. c i t . pp. 470-471. Also Fernandez, R.A. and Ocampo, J.P., The Latin American Revolution: A Theory of Imperialism, Latin American Perspectives. Vol. 1, No.;. 1, 1974, p. 52. 18. My argument here does not include a critique of "econ-omic parasitism" as a conceptual fallacy, which amounts to nothing more than "rentier imperialism" nor, and perhaps the much more important claim, that i t was the exports of Capital which was responsible for indust-r i a l stagnation. Por such a critique see Kemp, T. The Theories of Imperialism". (Dennis Dobson, London, 1967J, pp. 114-120. 19. Marx, Karl. Capital. Vol. 1, op. c i t . p. 769. 20. See, for example, Marx, K., and Engels, T., the Manifesto of the Communist Party, in Marx, K., and Engels, P., Selected Works i n "Vol. 1. (international Publishers, New York, 1968). "The bourgeoisie by the rapid improvements of a l l instruments of production, bythe immensely fa c i l i t a t e d means of communication, draws a l l even the most barbarian nations into c i v i l -ization. The cheap prices of i t s commodities are the heavy a r t i l l e r y with which i t batters down Chinese walls, with which i t forces the barbarians intensely obstinate hatred of foreigners to capitulate. It compels a l l nations, on the pain of extinction, to adopt the bourgeois mode of production; i t compels them to introduce what i t calls c i v i l i z a t i o n into their midst, i . e . to become bourgeoisie themselves. In other words, i t creates a v/orld after i t s own image", op. c i t . p. 39. 21. Prank, A.G. Capitalism and Underdevelopment i n Latin  America. (Monthly Review Press, New Xork, 1967), pp. 146 - 147 . 40 22. Marx, K. The British Rule i n India i n Marx, K. On Colonialism and Modernization, op. c i t . p. 91-94. 23. Buxemb urg , R. The Accummulation of Capital, (Routhledge and Kegan Paul, London,1963) P. 416. 24. Zeitlin, I.M. Capitalism and Imperialism. (Markham Publishing Co., Chicago, 1972".'.. imperialists vastly outnumbered by the colonial population i n every colony, sought a l l i e s among them. Typically the most important of these a l l i e s were the land-lords. By bolstering the priviledges of this class and fostering i t s development even where i t was weak, the imperialists gained the support of a power-f u l class of rich landlord proprietors who were v i t a l l y interested i n imperialism and capable of con-t r o l l i n g the popular masses. This alliance made mass poverty the normal condition of the people. **or, on the one hand, their misery was perpetuated by "indust-r i a l stagnation and, on the other by an imperialist landlord alliance that made anything but the most superficial of agrarian reforms unthinkable." op. c i t . p. 97. This statement i s remarkable for the number of contradictions i t embodies. First, while i t affirms the necessity of alliance between an indigeoms landlord class and the imperialist bouregeoisie, i t categorically denies the former any autonomy i n effecting any policies of independent, though sub-servient development. Secondly, i t i s questionable whether i t was.the landlords, of the local population or the comprador ^  bourgeoisie, who were much more interested i n trade and commerce, that provided the strongest link between the local economy and imperialism. Third, "industrial stagnation" i s of questionable his-t o r i c a l v a l i d i t y i n accounting for the "development of underdevelopment" and dependence, since i t could be argued that diversified agricultural production i s a much sounder base for development rather than indust-r i a l i z a t i o n , based on borrowed technology and capital, which places undue pressure on available resources. For a psycho-political analysis of the unchanging character of imperial p o l i t i c a l manipulation See Memmij. Albert: The Colonized and the Colonizer (Beacon Press, Boston, 1965). Also, Fanon, Frantz: The Wretched of  the Earth. (Grove Press, Inc., New Tork, 1963). 25. Nkrumah, K. op. c i t . P. x i i , See also Frank, A.G. op. Cit. "... the impregnation of the satellites domestic 41 economy with the same capitalist structure and i t s fundamental contradictions", op. c i t . p. 10. 26. Nkrumah, K., op. c i t . p. i x . 27. Robinson, R. Non-European Foundations i n European Imperialism: Sketch for a theory of collaboration i n Owen, R. and Sutcliffe, R. (eds.) Studies i n the  Theory of Imperialism. (Longman",aLondoh, 1972), pp. 118-119. 28. Lenin, V.IA, State and Revolution. (International Publishers", New *ork, 1969 )• ^^nly the proletariat by virtue of i t s economic role i n large-scale pro-duction - i s capable of leading a l l the t o i l i n g and exploited masses, who are exploitedj oppressed, crushed by the bourgeoisie not less, and often more, than thei-proletariat, but who are incapable of carry-ing on the struggle for their freedom independently", op. c i t . p. 23. 29. Much of the argument i s immersed i n very technical economic language, which requires, at minimum a working knowledge of classical economics and a complete under-standing of Marx's concepts of value, price and wage. I w i l l , therefore, attempt at best, a very schematic presentation of the main points. Since the concept i s relatively new i n the English speaking world there are very few expositions. Emmanuel, A. Unequal Exchange: A Study of the Imperialism of Trade (Monthly Review Press, New '"fork, 1972;) Emmanuel, A. White Settler Colonialism and the Myth of Investment Imperialism, New Left Review. No. 73, May-June 1972; Palloix, Christian, The Question of Unequal Exchange: A Crit-ique of P o l i t i c a l Economy, Bulletin of the Conference of Socialist Economists; 2 , ~ Spring 1972 didron, w. Black Reformism The Theory of Unequal Exchange in Capitalism and Theory (Pluto Press, London, 1974). P i l l i n g , G-. Imperialism^ Trade and 'Unequal Exchange*': The Work of A. Emmanuel, Economy and Society,, Vol. 2, No. 2, May, 1973. 30. Kidron, M, Capitalism and. Theory, op. c i t . p. 95-96", also Emmanuel, A. Unequal Exchange", op. c i t . pp. 38-40. 31. Glyn, A. and Sutcliffe, R. British Capitalism: Workers  and the Profit Squeeze. (Penguin Books, London, 1972j, p. 42 231. See also Hodgson, G. The Theory of the Falling Rate of Profit, New Left Review. No. 84, March-April 1974. Marx", K. Capital, vol. i i i (Lawrence and Wis-hart, London, 19&2), "This mode of production (Capitalist) produces a progressive relative decrease of the variable capital as compared to the^constant capital, and consequently a continuously r i s i n g organic composition of the total capital. The immediate result of this i s that,the rate of surplus value, at the same time or even a r i s i n g degree of labour exploitation i s represented by a continually f a l l i n g rate of profit... The progressive tendency of the general rate of profit to f a l l is therefore just an expression peculiar to the capitalist mode of production of the progressive dev-elopment of the social productivity of labour. This does not mean to say that the rate of profit may not f a l l temporarily for other reasons. But proceeding from the nature of the capitalist mode of production, i t i s thereby proved a logical necessitythat i n i t s development the general average rate of surplus-value must express i t s e l f in a f a l l i n g general rate of profit", op. c i t . p. 208-209. Quoted i n T&ffe, D. The c r i s i s of P r o f i t a b i l i t y . The Glyn-Sutcliffe Thesis, New Left Review, No. 80, July-August, 1973. 32. Emmanuel, A. Unequal Exchange, op. c i t . p. 61. 33. op. c i t . , p. 189. 34. op. c i t . , p. 187. 35. op. c i t . , p. 235. A good case in point is the rebate given on raw Commonwealth Caribbean Sugar entering the Canadian market between 1966-1970. See Levitt, K. and Mclntyre, A. Canada-West Indies economic relations, (Private Planning Association of Canada and Centre for Developing Area Studies, McGill University", Montreal, 1967). p. 149. 36. Emmanuel, A. Unequal Exchange, op. c i t . 37. op. c i t . p. 228. 38. op. c i t . p. 183. 39. op. c i t . p. 180. 4 3 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. Bettelheim, C. Theoretical Gomments Appendix 1 to Emmanuel A., Unequal Exchange, op. c i t . p. 301. lessness i n Blackburn, R. led.), Ideology in the  Social Science. (Montana/Collins, London, 1972), p. 119-163. Emmanuel, A., Reply to Charles Bettelheim in Unequal  Exchange, op. c i t . Appendix 11, p. 329, (author s emphasis) Prank, A.G.;, Capitalism and Underdevelopment i n l a t i n  America, op. c i t . , p. 10. Emmanuel, A., op. c i t . , p. 328. Baran, P. and Sweezy, P. Monopoly Capital. (Monthly Review Press. New York, 1966), p. 15-16. Marx- K. Capital. Vol. 3, (Lawrence and Wishart, London, 1959;, p. 274, quoted in P i l l i n g , G, Imperialism Trade and Unequal Exchange, op. c i t . , p. 184. Social and Economic Council of the United Nations, Multinational Corporations i n World Development. (United Nations, New *ork, 1973), p. 21. Quoted i n Sutcliffe. R. Conclusion to Owen, R. and Sutcliffe, R. (eds.),. Studies in the Theory of Imperial- ism, op. c i t . , p. 325. I a l l , Sanjay, Transfer Pricing and Multinational Corp-orations Monthly Review. Vol. 26, no. 7, December, 1974, p. W. Sutcliffe, R. Conclusions op. c i t . p. 325. United Nations, op.' c i t . p. 13-14. The classic example of this, of course, is Canada. See Levitt", Silent Surrender. (Macmillan of Canada, Toronto, 1970). Galtung, Johan. The European Community; A Super-t d . , 4 4 54. op. c i t . p. 73. 55. Bettelheim, G, Theoretical Comments i n Unequal Exchange op. c i t . , p. 316. 56. Por a select bibliography on the study of the changing nature of imperialist relationships see, Rhodes, R.L., (ed.) Imperialism and Underdevelopment, and Owen, R. and Sutcliffe. R. Uds.J Studies i n the Theory of  Imperialism. 57. Por a detailed discussion see Kemp, T, Theories of  Imperialism. (Dennis Dobson, London, 1967), Brown, M.B. After Imperialism. (Merlin Press, London, 1970. Jalee, P. The Pillage of'the Third World. (Monthly Review, New York, 1961J. * J a l l e . p., Imperialism i n the Seventies. (The Third Press, New York, 1973). Baran, V. The" • P o l i t i c a l Economy of Growth (Monthly Review, New York, 1962j., Rhodes. R.L. led.J Imperialism and Underdevel-opment. (Monthly Review, New lork, 1970). 58. Sutcliffe, R. Conclusion to Studies i n the Theory of  Imperialism, op. c i t . p. 320. 59. Lenin, V.I., Imperialism, op. c i t . p. 265. 60. Rowthorn, R. Imperialism: U n i t y of Rivalry, New L e f t  Review. No. 69, September-October, 1971., p. 34. Also Rosenfeld', S. Linking Arms On Capitalism»s Behalf, Vancouver Sun. Friday, June 13th, 1975. p. 4. "In line with i t s purposes of sponsoring proposals on which the three major regions (Europe, Japan and North America) can work together, the Tri-l a t e r a l Commission has published reports on the likes of energy, trade and p o l i t i c a l oo-operation. Just last week i t assembled i t s members i n Kyoto, Japan, for a f i r s t plenary session to talk about global redistribution of power and the particular problems of the t r i - l a t e r a l community i n -cluding the governability of democracies", op. c i t . See also Mandel, E. Europe vs. America: Contradictions  of Imperialism. (Monthly Review, .New York, 1972J. Murray, R. Internationalization of Capital and the nation state, New Left Review. No. 67, May-June 1971. The Editors: Imperialism in the Seventies, Monthly Review, Vol. 23"> no. 10", March 1972. 61. Jalee*, P; The Pillage of the Third World (Monthly Review New York, 1968/. and the Third World i n World Economy, 45 (Monthly Review, New York). See also Arrighi, G; International Corporations, Labour Aristocracies, and Economic Development i n Tropical Africa i n Rhodes, R.I. Imperialism and Underdevelopment, op. c i t . , pp. 220-267. Stacey, M. and Plaza, G. The United .Fruit Company i n Latin America, (National Planning Association, Washington, D.C,, 1958). 62. Frank, A.G. Economic Dependence, Class Structure and Underdevelopment Policy i n Cockcroft, J.D., Frank, A.G. and Johnson, K.L. Dependence and  Underdevelopment; Latin America's Political"" Economy. (Anchor Books. New York, 1972j. p, 36-59. 63. For the most succinct statement yet to be made on the changing relationship between the advanced capitalist countries and the underdeveloped countries of the third world, see Quijano, A. Nationalism and Capitalism in  Peru;- A Study i n Neo-imperialis5u (Monthly Review Press, i^ ew York, 1972J. 64. Halliday,:F. Arabia Without Sultans. (Penguin Books, Middlesex, England, 1974J, p. 500. 65. Frank, A.G, The Mechanisms of Imperialism i n Latin  America; Underdevelopment or Revolution, (Monthly Review Press, New lork, 1969;, pp. 162-174. 66. Vernon, R. Sovereignity at Bay: The Multinational  spread of US enterprises^ {.Basic Books', J-nc, ^ ew iork, 1971;, p. 178. 67. op. c i t . See also Magdoff, H. The Age of Imperialism. (Monthly Review Press, New York, 1968;, p. 198. 68. For a select bibliography on the study of multinational corporations, see United' /Nations Secretariat: Multi-national Corporations: A Select Bibliography (United Nations, %w Xork, 1973;. : 69. Horowitz", D. The Free World Colossus: A Critique of  American Foreign Policy i n the Cold War j H i l l and Wang. New Xork, 1965;. Also Horowitz, D. (ed.), Corporations  and the Cold War. Monthly Review Press, New York, 1969; 70. Miyamoto, K. Japanese Capitalism. Monthly Review, vol. 26., no. 7, December 1974, p. 28. Also halliday, F. ; 46 and McCormack, G. Japanese I m p e r i a l i s m Today:,-C o - P r o s p e r i t y i n Greater A s i a , (Penguin Books. Middlesex, England, 1973), and Martdel, E. Europe  v s . America, op. c i t . 71. NACLA Handbook, The US M i l i t a r y . Apparatus. (NACLA B e r k l e y , C a l i f o r n i a , 1970). A l s o Bar an, P. and,-Sweezy", P. MonopQly C a p i t a l , op. c i t . Chapter Tf M i l i t a r i a n and i m p e r i a l i s m , pp. 178-217. 72. Sedlen, Mark. R e v o l u t i o n and T h i r d World Development: People's War and the Transformation o f Peasant S o c i e t y i n M i l l e r , N. and Aya, R. N a t i o n a l L i b e r a t i o n : . R e v o l u t i o n i n the T h i r d World, (The t r e e -tress, New York, 1971), p. 214. 73. Quijano, A. N a t i o n a l i s m and C a p i t a l i s m i n Peru', op. c i t . p. 5. 74. Thomas, C. Meaningful P a r t i c i p a t i o n : The Fraud of i t , i n The Afterma"th of S o v e r e i g n i t y : West I n d i a n Per-s p e c t i v e s , ed. by Lowenthal, Di and Comitas, L. (Anchor Books, New York, 1973), p. 358. 75. Quigano, A., op. c i t . p. 72. 76. Warren, B. Imperialism and C a p i t a l i s t I n d u s t r i a l i z a t i o n New L e f t Review. No. 81, September-October 1973, pp. 28-29. 77. op. c i t . p. 12. 78. J e f f e r s o n . 0. The Post War Economic Development of Jamaica, ( i n s t i t u t e o f S o c i a l , Economic Research, U n i v e r s i t y o f the West I n d i e s , Mona, 1972), p. 130. 79. S u t c l i f f e , R. I m p e r i a l i s m and I n d u s t r i a l i z a t i o n i n the T h i r d World, i n Owen, R. and S u t c l i f f e , R. (eds.) Stud i e s i n the Theory of Imperialism, op. c i t . pp. 171-T9~T, 80. Marini", R.M. B r a z i l i a n Sub-Imperialism, M o n t h l y Review, \ V o l . 23, No. 9, February 1972. pp. 14-2TI The r e c e n t ) Bauxite d e a l i n the Caribbean i s v e r y i n s t r u c t i v e . The agreement by the Governments of Jamaica, T r i n i d a d , and Guyana t o s e t up the f i r s t aluminum s m e l t i n g p l a n t i n the Caribbean by 1977. The smelter i s to be s t r a t -e g i c a l l y l o c a t e d i n T r i n i d a d because of the a v a i l a b i l i t y and access to energy sources, with Guyana and Jamaica supplying the raw ore. Under this arrangement neither of the Governments have absolute control, leaving the MNCs (Alcan, Alcoa, Reynolds, Kaiser) i n the position of maintaining further control of their command over technology and capital, "Further, Trinidad I with the single largest volume of foreign investments i n the Caribbean, has had unsavoury reputation of being one of the strong-est supporters .fof the theory of foreign invest-ments as the necessary road to development. Of course, the presence i n Trinidad of the US Omega Navigation F a c i l i t y with VLF transmitters for use by US aircraft and vessles to; determine their position, makes i t a l l so much safer. Bauxite producers put heat on foreign owners, Last Post. October-November, 1974, vol. 4, No. 3 p. 18. (5KA.PTER TWO: THE LIMITS OP NATIONALISM I: The Caribbean: An American Lake Perhaps the most lasting and far reaching change to have occur ed in the Caribbean, after the Second World War", was the replacement of Britain by the United States as the world's leading capitalist country. Por West Indians and Latin Americans i t meant the replacement of a dying capital-ism with the young and vigorous American Empire.^* An empire that was taking shape as early as the middle of the 19th century and under the aegis of the Monroe Doctrine was able to intervene at will", persuading their "captives 1 of American •good intentions'. The acquisition of the remnants of the Spanish Empire was an example par excellence of American intentions and the lengths to which she was prepared to pur-2 sue the policy of 'manifest destiny'• In addition, as one noted establishment historian recognized, with regards to the "Rossevelt Corollary" of the Monroe Doctrine"", "The Corollary ... provided that i n order to prevent the intervention of European creditor states, i n the Caribbean, the United States would, i f necessary, regu-late the financial and other conduct of Caribbean nations i n their relations with European powers. It was a doctrine whose imperialist implications were soon evident". Such interventions, of course, are legendary, i n American foreign relations, especially with i t s l a t i n American and Caribbean neighbours. A few examples w i l l suffice - Cuba i n 1901 and through the Piatt Amendment u n t i l 1934, the Domin-ican Republic in 1915, Haiti, 1915-1934, etc. 4 That the Caribbean was now an American lake, Great Britain characteristically recognized by coming to terms i n 1901 over the long pending question of the isthmian canal. Not only did the United States get a l l that i t wanted in the matter of ownership and control of the proposed waterway ... but i t got the implied right to garrison the canal and f o r t i f y i t at i t s own discretion... The United States now had a blank cheque to treat the region of the Caribbean as i t s exclusive sphere of influence ... This meant that whatever independence (or 'Self-determination') was enjoyed by the local republics situated on the islands and along the l i t t o r a l of the Caribbean Sea was henceforth mortgaged to the foreign policy of the United States. Not only m i l i t a r i l y , but also economically, the United States was to play an increasingly important role in the Caribbean. But for the sugar and tobacco plantations, 50 owned by colonial Interests since the days of slavery United States and Canadian capital was rapidly invading the region, and in cases displacing traditional sanctuaries of European investments; monopolising such important areas as raw resources development and manufacturing, The greater competitive a b i l i t y of US industries gave them a distinct advantage over their British and European counterparts, with the result that the US was quickly becoming the main supplier of goods and services to the region. At the same time, the larger US market and i t s proximity to the Caribbean made reciprocal trading arrangements much more attractive.^ The crowning irony of American takeover i n the Caribbean, came in 1940, when for f i f t y antiquated destroyers, the "United States received from Britain 99 year leases of naval bases i n Trinidad, Guyana, Antiqua, St. l«ucia, Jamaica, 7 The Bahamas, - as well as i n Newfoundland and i n Bermuda. The British war effort, however", wasr not helped i n any sign-ifica n t way, as most of the destroyers were soon put out of commission. For the Americans, i t was the deal of the cent-ury. A s then US Attorney General Robert Jackson, noted to President Roosevelt in a letter of 1940, i t involved the "transfer to Great Britain of the t i t l e and possession of certain over-age ships and obsolescent military materials ... and certain other small patrol boats which, though nearly completed, are a l -ready obsolescent". The American view of the Caribbean, should be seen against this general background to which the -Us has become accust-omed to treating i t s southern neighbours. Commenting on issue of the bases President Roosevelt i n a letter to his Secretary of State, Cordell Hull, i n January, 1941, charact-e r i s t i c a l l y voiced American opinion: There is always the possibility of their putting up their, sovereignity to and over certain colonies. Such as Bermuda, the British West Indies, British Honduras and. British Guiana I am not yet clear in mind, however, as to whether the United States should consider American sovereignty over these islands ... as something worth while or as a__distinet l i a b i l i t y . If we can get our naval bases why, for example, should we buy with them two million headaches consisting of the number of human beings who would be a definite drag on this country and who would s t i r up questions of ra c i a l vSto.ck . by virtue of their new status as American citizens. Needless to say, much has changed since President Roosevelt uttered those fateful words, and while American officialdom i s willing to take a different view towards i t s southern neighbours, i t i s not one that i s premised on a mutual respect of integrity and independence. The overthrow 10 of the Arbenz Government in 1954, the Bay of Pigs incident i n 1961, the massive infusion of capital and men. i n Guyana between 1961-1964,^ ""*" the invasion of the Dominican Republic 12 i n 1965 etc., attest to the fact that far from assuming a 52 neutral role i n the internal p o l i t i c a l situation of i t s hemispheric partners, American involvement i s as real and disruptive as i t ever was. In addition the maintenance of several military installations and bases throughout the 13 Caribbean and l a t i n America are not signs of a changing partnership for hemispheric security, but of a continuing ideology of 'cold war* hysteria and of the need to prop up insolvent governments, making them safe havens for American investments. In characteristic style, President Kennedy announced in 1961, the Alliance for Progress, "... a vast cooperative effort unparalled in magnitude and nobility of purpose ... a p&an to transform the 1960's into a historic decade of democ-rat i c progress.""^ We were to soon learn however, what Kennedy meant by "democratic progress". The Alliance for Progress was introduced with much fanfare^ and enthusiasm, but i t soon became apparent that while the o f f i c i a l t i t l e maintained the word "Progress" i t would have been much better or more to the point, to dub the whole scheme "Alliance for Stability through anti-communism". At the same time revela*f tions in the press and congressional hearings i n 1964 and 1965 revealed that the Special Operations Research Q f f i c e (SORO) of the US Army was involved in a massive research program", 5 3 "to obviate the need for insurgency through programs for p o l i t i c a l , economic, social and psychological development. Military support for such programs can be a sign-ificant, factor i n the nation-building process. Responsibility for conducting counterinsurgency operations must rest with the indigenous government. Carefully applied assistance and advice by US govern-mental agencies, can however, materially influence the outcome. The Alliance for Progress, i t would seem, had i t s military counterpart and should not have l e f t any illusions as to i t s f i n a l outcome. Though i t i s not certain to what extent both programs, Alliance for Progress and Project Camelot, were inter-related, or i f at a l l , by the end of the decade i t was clear that far from being an instrument of economic progress and p o l i t i c a l s t a b i l i t y the alliance had succeeded in becom-ing a potent weapon of anti-communism, the Alianza was also hobbled by i t s preoccupation with communism. When the chips were down, the^oligarchies:and the generals who backed them up knew that Washington's fear of communism waff even greater than i t s desire for reform. If reform could be connected with communism and social s t a b i l i t y made to seem a bul-wark against communist penetration, then structural reform could be quickly dropped by the wayside. The lesson was easily drawn, and i n the wake of the Bay of Pigs, i t was soon applied. Encouraged by Washington's fear of Communism and i t s preference for verbally anti-communist regimes, would-be caudillos-usually trained and equipped by the United States -moved i n to depose a number of legally elected governments. Their charge: c i v i l i a n reformers were soft on communism: 54 Between 1962 and early 1970 Army coups toppled ten of Latin Americasntwenty-four governments, some twice. If we were to add to the l i s t Chile and the numerous other governments propped up by American aid and military assist-ance, the proportion becomes phenomenal indeed. It must be recognized, however, that while the US maintains control through the proliferation of military bases and installations'^ i t has allowed or more precisely been forced into the position of accepting p o l i t i c a l and economic partnership. Though this i s not necessarily on equal terms, i t allows for greater local autonomy once i t is reasonably certain that changes would not alter the pattern of imperialist domination - dependence created and maintained by American capital with "assistance" from the indigenous bourgeoisie. As w i l l become clear later, "assistance" here does not simply mean passive acceptance of American corporate policy but i n alliance with the continuing efforts of a national and comprador bourgeoisie seeking a "more independent" development", one that allows for greater local participation and control. In 1948 the Organization of American States (OAS) was formed with the intention of "guiding hemispheric action"." The declaration of the OAS specifically stated that non-inter-vention i n either the domestic or foreign affairs of member states was i t s founding principle. It seems that this would, 55 once and for a l l , limit United States action i n hemi-spheric po l i t i c s and at the same time lay the basis for independent partnership among member states. Bat such noble intents, the United States soon found out, flew i n the face of an "abhorring r e a l i t y " - international communism. The ominous signs from Korea and the acession of Arbenz to the Presidency of Guatemala i n 1954 rendered the principle of non-intervention a dangerous precedent for United States interests. "The trouble with non-intervention, from Washington's point of view, was that i t failed to deal with the problem of communist government's coming to power. If such a thing happened i * would not come by Russian invasion - which, des-pite a l l the military equipment the United States was funneling into Latin America, nobody took seriously - but by a seizure of power from inside: a com-munist coup d'etat, a take-over of a legally elected government or perhaps even a communist victory i n the free elections". Thus, John Poster Dulles was able, i n Caracas in 1954, to persuade the OAS to drop the clause of non-intervention as far as the "international communist movement" was concerned. The founding declaration was then amended to 'read as follows: "The domination or control of the p o l i t -i c a l institutions of any American State by the international communist movement ... would constitute a threat to the sovereignty and p o l i t i c a l independence of the American States 56 This would not only provide the necessary rationalization for intervention, hut henceforth anyone branded a communist would find i t almost impossible to lay claim to p o l i t i c a l power, legitimate or otherwise, in the area. Such invective . of course, was the natural outcome of a country steeped i n : lCold War1 hysteria and the machinations of McCarthyism. American ascendancy to world predominance marked a significant departure from the former colonial empires of Europe and Britain, While the former colonial empires evoked imperial protection as the since qua non of their existence, United States global policy became increasingly identified with free trade and the freedom of access to traditional sanctuaries of colonial investments for the resources and agricultural raw materials of the third world. In order to penetrate and displace these havens of imperial protection, American foreign policy actively supported local nationalism, pointing to i t s own revolutionary experience as the most exemplary case of anti-colonialism. This progressive attitude of American foreign policy, of course, coincided with the aspirations of nationalist, who saw the spectre of national independence as their only hope.' through this support of nationalist movements the United States was able to secure important guarantees of trade and investments from national-i s t s in return for economic and military aid and arbitration 57 with colonial powers for greater local autonomy. As the Kolkos noted, however, increasing United States involvement in colonial politics while providing a powerful impetus for nationalist aspirations, i t at one and the same time helped sustain imperial authority and turned into an obstacle for an independent nationalist development. In addition, The Americans did not care i n i t i a l l y to assume a l l the p o l i t i c a l and m i l i -tary overhead changes that befell imperialist nations, but Britain's i n a b i l i t y to sustain those inherited obligations meant that i t would now welcome some greater measure of Amer-ican assistance i n this sphere - and attempt to tend i t s restricted area with less cost. Moderate nationalism, therefore, became a useful tool to the United States insofar, as i t helped ease out England, but a danger to i t when i t opened the door to Russia or also designated the United States as the major obstacle tOp^ptonomous economic development. This meant; of course, that while United States policy was supportive of local nationalism, the partnership contained the seeds of i t s limitations. Eor awhile the United States was prepared to support local nationalism as a means of off-setting established privileges i t was not about to allow the free development of an independent nationalism. On the economic front this meant that local nation-alism could now assume active participation in the economic l i f e of the nation. But while this alliance allowed for 58 greater local participation and control i t at the same time assured the increasing integration of strategic areas of the third world into United States corporate strategy. The process of integration was accomplished by the United States through the crucial role i t played i n supplying the necessities of economic development, e.g. the Marshall Plan, the Alliance for Progress, etc. The result was not only a subservient dependency by the local economy but the entire process of development was subjected to a distorted develop-ment. Thus', while United States policy was willing to accept and willingly support greater local autonomy, i t was by no means open to an independent nationalist development. Por this reason, i t greatly differed from the former colonial powers who were content to keep the natives as natives while the United States was willing to pursue a policy of greater accommodation. Of course, i t could be argued that nationalism was a direct outgrowth of the vississitudes of the 1930's and the Second World War and i t s own agitation, and American presence was, therefore, a mere spectator to i t s successes", as exemplified by the Indian Congress Party. Further, i t i s argued that national independence for the colonial territories of the third world was a direct result of the demise of imperial authority and American involvement merely acceler-59 ated the process. True as i t may be, the logic of such arguments i s part and parcel of the "vacuum theory"", which holds that the retreat of imperial powers after the Second World War created a power vacuum which the United States simply proceeded to;£ill. But|. as we attempted to show with the casre of the Caribbean and Latin America, American foreign policy far from being a passive 'spectator pursued an active policy of intervention to the detriment of colonial powers - a direct outgrowth of i t s global policy. II: Anglo-American Interests and Guyanese Nationalism It i s against this general background that the Caribbean must be viewed. American policy makers, however, were not overly concerned with the Caribbean, for while Britain maintained control of her colonial possessions, Caribbean complacency i n hemispheric p o l i t i c a l and economic arrangements was assured. The "uneasy peace" of British Colonialism was maintained by: (l) the autocratic i n s t i t u -tions of Crown Colony Government, and (2) the arbitrary b l -frucation of economic spheres along racial and ethnic lines the classic - "divide and rule" strategy which the British had employed so successfully i n Asia and Africa. Crown Colony Government came to the Caribbean i n the 19th Century for two specific reasons. In the f i r s t place, i t was a means 60 of forestalling any independence movements patterned after the American Colonies; secondly, to deny the franchise to free blacks who began to exceed the number of whites and thus prevent the development of black states modelled after the Haitian Revolution, As i t turned out i t was the latter that occupied the interest of the British Government, With few modifications the system of Crown Colony Government remained unchanged u n t i l the late 1940's and early 1950's when universal adult sufferage was granted to the Caribbean -"21 territoriesv Universal adult sufferage, however, was a change only i n the formal structure of Crown Colony Govern-ment and not a substantive realignment of p o l i t i c a l i n s t i t u -tions. The Waddington Constitution granted Guyana i n 1952", for example, reserved the essential powers of policy forma-tion, and important portfolios to nominated members of the Governor's Executive Council", "... although recommending universal adult sufferage and the ministerial system ... i t nevertheless retained extensive powers i n the hands of the Governor and the British Government, Besides presiding over the Executive Council"", the Governor was granted unlimited powers of c e r t i f i c -ation and veto. The Executive Council was merely advisory to him and was to have a delicate balance' of six elected minis-ters from the lower house, one nominated, member from the upper house and three ex-o f f i c i o members ,,. ^he three ex-officio members, the Chief Secretary, Financial Secretary and Attorney General, hold the important portfolios of foreign affairs",, police, defence, finance, law and order, for these 'cannot' yet be transferred with confidence to elected members". 61 What is important to see is that while the 1939 Moyne Commission recommended greater l o c a l participation as a 23 necessary f i r s t step towards p o l i t i c a l emancipation, Britain was not about to issue a carte blanche to her West Indian colonies, N 0r was she, at the same time, prepared to allow the free development of p o l i t i c a l forces i n a colonial polity, -^ or this reason British Colonial policy at i t s most progressive moment represented the meagrest of constitutional reforms and even the grandest scheme to have been devised, was nothing more than a constitutional manijpralatlen - the i l l fated West Indian Federation. It was not surprising therefore, that colonial policy "concentrated almost exclusively on p o l i t -i c a l institutions ... It lacked something, as Sir Ralph Furse noted, of the Greek s p i r i t , and in that sense was far inferior to French colonial administration. It prided i t s e l f on i t s imperial manners,.the moral code of the English gentleman, as idealized i n Burke and Newman, and, indeed, imparted the code to the small groups of educated West Indian classes, the West Indian gentleman as he i s known, of the 'Old school*. But that simple meant i n the p o l i t i c a l sphere, the incorporation of those groups into the local colonial estab-lishment, struggling for their own limited p o l i t i c a l rights and leaving the p o p u l a r social base relatively untouched". Thus", i t was that British colonial policy was able to achieve i t s objective by creating a sort of West Indian counterpart of the English gentleman, uniting once and for a l l the imperial bourgeoisie and i t s colonial appendage. It was 62 precisely this period, the 1940's and early 1950's that saw the mushrooming of such middle class organizations in Guyana as the league of Coloured Peoples and the East Indian Association, to take advantage of the new s p i r i t of "representative government". Perhaps the most debilitating aspect of British colonial policy i n Guyana has been i t s strategy of "Divide 25 g.nd Rule". lhe process began in the 1830 s when slavery was abolished and labour was needed on the sugar estates to f i l l the vacuum created by the migration of the freed blacks. Subsequent immigration to the colony brought several immigr-ant groups, who, coincidentally (?), came to represent different economic spheres of the national economy. A break-down of ethnic divisions and economic employment reveals the following scenario: ETHNIC DIVISION ECONOMIC EMPLOYMENT EAST INDIANS Landlords, peasant proprietors, rural proletariat and urban merchants - this latter group makes up the majority of local merchants. AFRICANS Industrial and waterfront workers", junior c i v i l servants and farmers. -PORTUGUESE Merchants (Wholesale trade) and commis-sioners for foreign businesses. CHINESE Retail trade (mainly i n food) laundries and restaurants. EUROPEANS Big business, banking, insurancej (including North services (shipping and ai r l i n e s ) , Americans) 63 Senior C i v i l Servants and higher echelon business management. AMERINDIANS (Indigenous Indians) Considered superficial to the workings of the economy. Caught between a dying indigenous culture and the. intrusions of western c i v i l i z a t i o n which, at one and the same time, neither annihilates nor readily assimilates them. The most important groups i n terms of potential p o l i t i c a l power are the East Indians and Africans who con-stitute about 50 percent and 30 percent respectively of the national population. With the exception of a small number of East Indians who migrated to the c i t i e s , these two groups have been kept apart with a r i g i d i t y singluar even, within British colonial policy. British policy from time immemorial early colonisation - was occupied with the business of sugar, and for that single reason Caribbean Colonies were profitable to Britain. As Eric Williams noted i n his seminal study", Capitalism and Slavery". The Emancipation Act was only a ready reminder of the frag-i l i t y of the planters existence and his dependence on a docile labor force. Thus, when the end of East Indian inden-turship came i n 1917 the planters took every precaution to secure his labor, either through a "hand-to-mouth" existance "in colonies ... land and capital were both useless unless labor could be commanded. labor, that i s , must be constant and must work,2gr be made to work, i n co-operation". 64 or a precarious dependence on the seasonal employment on sugar estates. In addition as J.B. Jenkins noted, the East Indian Community v/as t o t a l l y alienated from any other section of the larger community of which i t v/as a part. "The great community ... l i v e s by i t s e l f " , i s shut i n with i t s e l f , must f i n d i t s news and amusement as well as i t s tasks out of i t s e l f . Take a;large factory of Manchester", Birmingham", or Belfast, b u i l d a wall around i t , shut i t s working people from a l l intercourse, save at rare i n t e r -v a l s , with the outside world. K eep them i n absolute heathen ignorance and get a l l the work you;can out of them, treat them not unkindly, leave t h e i r s o c i a l habit and s o c i a l r e l a t i o n s to themselves", as a matter not concerning you who make money out of t h e i r labour", and you. 'will have constituted a l i t t l e community, resembling i n no small degree su sugar estate v i l l a g e i n B r i t i s h Guiana". The p o l i c y of Crown Colony Government", at the same time, made l i f e d i f f i c u l t f o r an independent peasantry by providing the bare minimum of drainage and i r r i g a t i o n . This may not seem an important undertaking f o r peasant agriculture under ordinary circumstances, however, i t i s of paramount importance when i t i s r e a l i z e d that the coastal p l a i n of Guyana (where the popula-t i o n i i s concentrated) i s a c t u a l l y below sea l e v e l and the majority of the people are only able to eke out a precarious existence by a series of sea walls, makeshift dams and natural b a r r i e r s . Of course", the in t e r e s t s of sugar barons and c o l o n i a l 65 p o l i t i c s were o f t e n so i n t e r t w i n e d t h a t the d i f f e r e n c e s were o n l y s e p a r a t e d by t i t l e s and moments of the day, and n o t by i n d i v i d u a l s o r i n d i v i d u a l i n t e r e s t s . " I n a d d i t i o n t o : t h e i r l e g a l . p o w e r s i n t h e Combined Court", t h e sugar and c ommercial i n t e r e s t s p o s s e s s e d c o n s i d e r a b l e i n f l u e n c e b o r n o f .-.certain o t h e r f a c t o r s . They, f o r example, because o f t h e a d m i n i s t r a t i v e s t r u c t u r e o f t h e i r o r g a n i z a t i o n s , were a b l e t o b r i n g p r e s s u r e on t h e U.K. Government. I n most cases l o c a l e s t a t e s were managed by a t t o r n e y s f o r a b sentee p l a n t e r s r e s i d i n g i n t h e U.K. The owners o f e s t a t e s i n c l u d e d members o f P a r l i a m e n t , w h i c h p l a c e s them i n an advantageous, p o s i t i o n o f a c c e s s t o B r i t i s h Government. I n many i n s t a n c e s , too", members of i m p o r t a n t m e r c a n t i l e f i r m s were numbered among t h e owners o f p l a n t a t i o n s and t h e s e groups combined e f f e c t i v e l y t o s a f e g u a r d and promote t h e i r i n t e r e s t s . There were a l s o examples o f Governors and o t h e r o f f i c i a l s w i t h f i n a n c i a l i n t e r e s t s i n t h e sugar i n d u s t r y w h i c h must s u r e l y have gone a f a r way towards c o l o u r i n g t h e i r a t t i t u d e . S g ^ o the v a r i o u s groups i n t h e s o c i e t y " . The combined power o f Crown C o l o n y Government and sugar i n t e r e s t s was thus a b l e , n o t o n l y t o m a i n t a i n a d o c i l e and " c o - o p e r a t i v e " l a b o u r force', b u t succeeded i n i t s more import-a n t t a s k o f e r e c t i n g s o c i a l and p o l i t i c a l b a r r i e r s among t h e two most i m p o r t a n t e t h n i c g roups. The r e s u l t was not o n l y a m u t u a l d i s t r u s t o f each o t h e r , b u t t h e development o f i n t r a -group c o h e s i v e n e s s t h a t was t h e n a t u r a l r e f l e c t i o n o f " s e l f " and i n t e r g r o u p c o m p e t i t i o n t h a t was t o r e s u l t i n t h e c o n f l a g -r a t i o n o f t h e 1960' !s, a i d e d and abetted by t h e m a c h i n a t i o n s o f i m p e r i a l p o l i t i c s . 66 Guyana's complacency i n hemispheric p o l i t i c s , however, was rudely awakened i n 1953. Under the f i r s t national e l e c t i o n of universal adult sufferage, the r a d i c a l n a t i o n a l i s t People's Progressive Party (P.P.P.), under the leadership of Dr. Jagan, swept the p o l l s and emerged with a v i c t o r y that surprised even i t s most optimistic supporters. The PPP emerged with eighteen out of a possible twenty-four seats", only one other party (the National Democratic Party-NDP) was able to obtain more than one seat, i n the newly con-s t i t u t e d l e g i s l a t u r e . The subsequent events i n Guyana, however, are so much a part of the h i s t o r y of the Cold War and the debate i s so steeped i n the hysteria that i s c h a r a c t e r i s t i c of that phenomenon that i t i s often d i f f i c u l t to delineate f a c t - 29 from fancy. However, i t i s not too d i f f i c u l t to see, a f t e r the rhetoric and name c a l l i n g has subsided, that Jagan was c e r t a i n l y not the v i l l a i n of the piece - the r o l e i n which he ' 30 was cast by both c r i t i c s and o f f i c i a l B r i t i s h reaction. The PPP f a r from being a "red menace" was nothing more than "a braod national front", l e d by "Marxists but embracing a l l s t r a t a , including native p a t r i o t i c c a p i t a l i s t s who were pre-31 pared to oppose colonialism and imperialism", as Jagan him-s e l f has argued on several occasions. Even so, as i t turned out, i t i s not d i f f i c u l t to see that the self-proclaimed Marxists of the party were anything but Marxists. They were simply mouthing the appropriate phrases of "an increasingly 67 old-world blend of Marxist-Leninist language". As one j o u r n a l i s t quite aptly noted", The People's Progressive Party was Jagan's b r a i n c h i l d and modelled a f t e r the B r i t i s h Labour^Party and just about as revolutionary. I t was precisely because of i t s s o c i a l democratic tendencies", despite i t s r a d i c a l promulgations, that the party found i t increasingly d i f f i c u l t to function a f t e r 1968. What happened i n Guyana i n 1953 was simply ( l ) a l o c a l nationalism seeking ito come into i t s own; (2) "the new American global imperialism taking over the defence of the 34 western s o c i a l order from a bankrupt B r i t i s h imperialism"; and (3) the new "Churchillian-ELizabethian Commonwealth" seeking to re-structure the once ;'Glorious Empire''1. The suspension of Guyana's Constitution i n 1953, therefore, did not r e s u l t from an attempt by the PPP to communize Guyana", as o f f i c i a l B r i t i s h publications has i t " , but from the inevitable c o l l i s i o n of an a n t i - c o l o n i a l nationalism seeking to democrat-ize the autocratic i n s t i t u t i o n s of a c o l o n i a l society, and a B r i t i s h officialdom seeking to maintain the f i n a l vestiges of Empire. They i n e v i t a b l y c o l l i d e d , then, with the unwritten rules of c o l o n i a l c r i c k e t i n which the native p o l i t i c a l class enters i n t o partnership with a benign officialdom which means, i n e f f e c t , partnership on imperial not l o c a l terms, that i s , terms envisaging not a s o c i a l i s t elimination of the c o l o n i a l enclave economy but i t s con-68 t i n u i n g ^ e x i s t e n c e w i t h minimum m o d i f i c -a t i o n s . I n t e r n a l o p p o s i t i o n was based ; on t h e PPP's i n t r o d u c t i o n o f a Labour R e l a t i o n s B i l l p a t t e r n e d a f t e r t h e N a t i o n a l Labour R e l a t i o n s A c t o f t h e U n i t e d S t a t e s , known as a Wagner A c t , h a r d l y a r e v o l u t i o n a r y p i e c e o f l e g i s l a t i o n . P o r t h e B r i t i s h , however, the PPP had committed the u l t i m a t e s i n by r e p e a l i n g the U n d e s i r a b l e P u b l i c a t i o n s O r d i n a n c e , a c l a s s i c t a l e o f M a c a r t h y i s m , and l i f t i n g the ban on West Indian leaders", n o t e d f o r t h e i r a n t i - c o l o n i a l s e n t i m e n t s . The PPP had s i m p l y t a k e n f o r g r a n t e d t h e B r i t i s h Government's promise o f g r e a t e r l o c a l autonomy as a n e c e s s a r y f i r s t s t e p toward p o l i t i c a l i n d e p e n d-ence. They were s i m p l y . p r e p a r e d t o e x p l o i t t h e promise t o i t s 36 c o n s t i t u t i o n a l l i m i t s . There was n ever an o c c a s i o n on w h i c h the e l e c t e d members acceded t o the demands o f e x t r a - p a r l i a m e n t -a r y o p p o s i t i o n , a d v o c a t e d by young r a d i c a l s o f t h e p a r t y . A l l t h a t t hey were w i l l i n g t o demonstrate was the i n h e r e n t l i m i t a -t i o n s and r e s t r a i n t s imposed by c o n s t i t u t i o n a l Crown Colony Government. As t h e n o t e d A n t h r o p o l o g i s t , R.T. S m i t h , o b s e r v e d , There was a b s o l u t e l y ' no o c c a s i o n where the e l e c t e d m i n i s t e r s s t e p p e d o u t s i d e t h e boundary o f c o n s t i t u t i o n a l l e g a l i t y . The c r i s i s t h e y w i s h e d t o provoke was one which.showed what t h e y c o n s i d e r e d t o be t h e i n h e r e n t weakness o f the c o n s t i t u t i o n and not one whigh„would i n v o l v e v i o l e n c e o r i l l e g a l a c t s . The s u s p e n s i o n o f t h e c o n s t i t u t i o n was n o t h i n g more th a n an 69 a t t e m p t t o f o r e s t a l l t h e development o f a n a t i o n a l i s t momentum w i t h i n the c o u n t r y , and a t the same time t o smash t h e r e m a r k a b l e u n i t y d i s p l a y e d by Guyanese, i n s p i t e o f B r i t i s h a t t e m p t s t o k eep them a p a r t and i n i g n o r a n c e o f each-o t h e r . J a g a n 1 s v i c t o r y a t the p o l l s a g a i n i n 1957 and 1961 demonstrated t h a t the 1953 v i c t o r y was h a r d l y a b l i n d f l u r y o f e n t h u s i a s m . B a t h e r , i t v/as t h e case t h a t f o r the f i r s t l i m e Guyanese were p r e s e n t e d w i t h o r g a n i z a t i o n w i l l i n g t o b a t t l e on t h e i r b e h a l f . Even Burnham's 1955 s p l i t w i t h Jagan f a i l e d t o u p s e t t h e PPP's e l e c t o r a l s t r e n g t h . In t h e 1957 e l e c t i o n s out o f a p o s s i b l e 14 s e a t s ( c o n s t i t u t i o n a l b o u n d a r i e s were m a n i p u l a t e d t o r e duce Jagan's p a r l i a m e n t a r y s t r e n g t h ) the PPP won 9 w i t h t h r e e g o i n g t o Burnham's s e c t i o n o f t h e PPP and one each t o t h e N a t i o n a l l a b o u r P a r t y and the U n i t e d Democratic P a r t y . The e x t e n t t o w h i c h the B r i t i s h had gone i n m a n i p u l a t -i n g t h e c o n s t i t u t i o n a l b o u n d a r i e s , i s demonstrated by t h e f a c t t h a t Jagan's p e r s o n a l v i c t o r y o f 23,443 v o t e s v/as more t h a n t h e combined t o t a l o f a l l v o t e s r e c e i v e d by t h e f i v e e l e c t e d 38 members of t h e o p p o s i t i o n . The PPP showed i t s s t r e n g t h a g a i n i n 1961 by w i n n i n g t w e n t y o f the t h i r t y - f i v e s e a t s . What r a t i o n a l i z a t i o n was b e h i n d the change from 14 t o 35 s e a t s i s h a r d t o e x p l a i n . Moreover, i t w o u l d be a monumental t a s k f o r a m a t h e m a t i c a l g e n i u s t o f i n d any l o g i c a l c o r r e l a t i o n between 24, 14 and >3% s e a t s . The f a c t t h a t t h e r e v/as no l o g i c a l 70 c o r r e l a t i o n i n the d i s t r i b u t i o n o f e l e c t o r a l d i s t r i c t s i n t h e t h r e e e l e c t i o n s " , n o r was t h e r e any d r a s t i c change i n t h e demographic d i s t r i b u t i o n o f t h e p o p u l a t i o n , o n l y adds t o t h e e v i d e n c e t h a t t h e B r i t i s h were not about t o a l l o v ; t h e PPP t o g o v e r n . I n t h e 1957 e l e c t i o n , f o r example, one e l e c t o r a l d i s t r i c t " , E a s t e r n B e r b i c e ( 1 PPP s t r o n g h o l d ) numbered 31,947 r e g i s t e r e d v o t e r s w h i l e i n a n o t h e r , n o r t h west D i s t r i c t ( c o n -t r o l l e d by m i s s i o n a r i e s , and the C a t h o l i c Church) t h e r e were 3 9 o n l y 3,450 r e g i s t e r e d v o t e r s . Burnham i n t h e meantime had a l r e a d y t a k e n h i s cue from th e B r i t i s h and i n 1955 formed a s e p a r a t e PPP w i t h h i m s e l f as t h e l e a d e r . The s p l i t , as Burnham saw i t , r e s u l t e d from the e x t r e m i s t p o l i c i e s o f Jagan w h i c h he c o u l d no l o n g e r t o l e r a t e . S u r p r i s i n g l y , t h i s was p r e c i s e l y B r i t i s h s e n t i m e n t . As the R o b e r t s o n Commission ( s e n t t o i n v e s t i g a t e t h e " d i s t u r b a n c e s " t h a t l e d t o t h e s u s p e n s i o n o f t h e c o n s t i t u t i o n ) n o t e d : We would hope t h a t t h e c o n t r a s t p r e s e n t e d by t h e r a p i d p r o g r e s s towards s e l f g o v e r n -ment else w h e r e would l e a d t h e people o f B r i t i s h Guiana t o r e a l i z e t h a t , n o t w i t h -s t a n d i n g t h e e x c e p t i o n a l d i f f i c u l t i e s o f the c o u n t r y , t h e e x t r e m i s t l e a d e r s o f the PPP and t h e p o l i c i e s f o r w h i c h t h e y s t a n d a r e t h e so^e b a r r i e r f o r c o n s t i t u t i o n a l p r o g r e s s . A few pages l a t e r t h e coup de grace' was p r e s e n t e d t o Burnham: We ... are d r i v e n to t h e c o n c l u s i o n t h a t so l o n g as t h e PPP r e t a i n e d i t s p r e s e n t l e a d e r s h i p and p o l i c i e s t h e r e i s no way i n w hich any r e a l measure o f r e s p o n s i b l e government can he r e s t o r e d w i t h o u t the 71 certainty that the country w i l l agaia be subjected to co n s t i t u t i o n a l c r i s i s . Even the anti-communist Clarion got into the act and f l a t t e r -i n g l y appealed to Burnham as "the young man with character and 42 decency", led astray by Marxists and communists But, as we have already indicated, "the young man with character and decency" was unable to make any sizable inroads on the PPP's strength. The most that the People's National Congress (PNC -the name given to the Burhamite f a c t i o n of the PPP af t e r i t s defeat i n 1957) could boast a f t e r two elections v/as that i t s e l e c t o r a l strength v/as greater than i t s parliamentary repres-entation. The B r i t i s h , a f t e r 1961", r e a l i z e d that i t v/as getting increasingly embarrassing f o r them to f o r e s t a l l Jagan any longer and deny independence to Guyana. African and Asian leaders began wondering aloud i n the h a l l s of the United Nations about imperial r e s p o n s i b i l i t y , and questioning B r i t a i n ' s c o l o n i a l p o l i c i e s . The United States", at the same time, v/as becoming increasingly concerned over the course of events i n La t i n America', especially a f t e r the Cuban Revolution. What shattered United States nerves was Castro's announcement that Cuba would embark on a communist .program of planned develop-ment. The end of Cuban-American r e l a t i o n s i n 1961 and the sub-sequent trade' embargo v/as the natural r e s u l t . The dangers 72 posed by the Cuban Revolution was not that something extra-ordinary had occurred i n the hemisphere, a f t e r a l l L a t i n American revolutions were a regular occurence, but that f or the f i r s t time the masses of the people had a material stake i n i t and f o r that reason alone success was almost guaranteed. According to Robin Blackburn: Perhaps the most dangerous aspects i n the development of the revolution was that ... p o l i c i e s were not just announced and decided from above but were accompanied by an awakening and mobilization of Cuba's impoverished and oppressed masses on an unprecedented scale. A l l i n a l l , i t i s surprising that a Bay of Pigs venture was. not organized sooner. The instant attempt to supress the Dominican uprising showed that the lesson was not wasted. ^ That "the lesson was not wasted", has become a truism of American foreign p o l i c y . The massive i n f u s i o n of men and money, to a i d the Trades Union Council's s t r i k e i n Guyana i n 1963, v/as poor excuse f o r United States involvement i n l o c a l p o l i t i c s . As Robert W i l l i s , General Secretary of the London Typographical Society, one of the conduits of CIA and APL-CIO funds into Guyana, noted, "The s t r i k e was wholly p o l i t i c a l " . 4 4 The extent to which American po l i c y makers and even the President was involved demands lengthy quotation: On 29th June 1963, i t was stated i n The Times that Dean Rusk had urged Lord Home and Colonial Secretary, Duncan Sandys, to suspend the const i t u t i o n . Then i n 10 July the New York Times, reported that President~KeiTnedy had been assured that the B r i t i s h were no longer contemplating 73 independence f o r Guyana: i t added, that Dean Rusk had suggested the imposition of proportional representation ... Drew Pearson, i n a syndicated a r t i c l e published on the 22nd March 1964, went so far as to claim that the 1963 s t r i k e had been f e r -mented and financed by a combination of the CIA and the B r i t i s h i n t e l l i g e n c e bent on f o r e s t a l l i n g independence under Jagan • ... The Sunday Times, on A p r i l 16th, 1967, gave a detailed analysis of CIA operation, based on information from the ex-pres-ident of the union used, on h i s own admis-sion, as a frant by the Agency. Throughout the s t r i k e t h i s union had been passing on CIA funds to Guyana through the represen-t a t i v e there of Public Service International ... And a week later.the Sunday Times added that according to a senior B r i t i s h security o f f i c e r t h i s was done with the -complicity of the B r i t i s h Prime Minister,,r -Coloriial Secretary and head of security. That none of the reports were even denied by those personally implicated nor by any o f f i c i a l organization v/as tantamount to admission of t h e i r occurence. Burnham, i n a l l of t h i s , v/as i n the i d e a l p o s ition of having no direct r e l a t i o n with either the l o c a l union or i n t e r n a t i o n a l bodies they represented. I t i s not i d l e conject-ure, however, to suggest that he knew what v/as happening, given the stakes involved. In the f i r s t place the s t r i k e involved much more than the meagre resources of the l o c a l Trade's Union Council: reportedly $1 m i l l i o n i n s t r i k e pay a l o n e . ^ Knowing that the s t r i k e had to l a s t as long as v/as p o l i t i c a l l y neces-sary, Burnham was c e r t a i n l y concerned about the necessary f i n a n c i a l support for such an undertaking. Secondly, the PNC 74 was discovered to have detailed plans of an "insurrectionary p l o t " to overthrow the government. Burnham, at the same time, openly courted the Americans, and keenly aware of t h e i r i n t e r e s t s , played on t h e i r anti-communist sympathies. After the PNC's defeat i n 1961, Burnham r e a l i z e d that the e l e c t o r a l system was against him, arguing that though he had obtained more than 40 percent of the votes cast the PNC had only 11 out of a possible 35 seats: a l i t t l e more than 30 percent p a r l i a -mentary representation on more than 40 percent e l e c t o r a l strength. The PPP, on the other hand, with only 42 percent e l e c t o r a l strength had a 57 percent parliamentary representa-t i o n . After Burnham v i s i t e d the White House i n May 1962 and consulted v d l t h the President's aide, Arthur Schlesinger, J r . , i t v/as reported to Kennedy that: Burnham's v i s i t l e f t the f e e l i n g as I reported to the President, that 'an independent B r i t i s h Guiana under Burn-to ham ( i f he w i l l commit himself to a m u l t i - r a c i a l policy) v/ould cause us fewer problems than an independent B r i t i s h Guiana under' Jagan'. And the way v/as open to bring i t about, because Jagan's parliamentary strength v/as larger than his popular strength: he had wcn 57 percent of the seats on the basis of 42.7 percent of the votes. An obvious so l u t i o n would be to estab-l i s h a system of proportional represen-t a t i o n . This a f t e r prolonged discussions the B r i t i s h Government f i n a l l y did i n 1963 The f i n a l defeat of 'the PPP under the system of proportional representation i n 1964 v/as thus the f i n a l B r i t i s h 75 act of restoring Guyana to the Anglo-American f o l d , .Burnham formed the new government by a c o a l i t i o n with h i s f r i e n d and confidante of the 1962-64 disturbances Peter D* Aguiar, head of the United Force (a reactionary a l l i a n c e of big business and the Catholic Church), Not s u r p r i s i n g l y , two years l a t e r Guyana v/as granted independence. That accomplished Anglo-American interests were reasonably assured of Guyana6s future role i n hemispheric p o l i t i c s . But, as they were to f i n d out l a t e r , Burnham v/as c e r t a i n l y not the easiest c l i e n t to deal v/ith, I I I : Nationalism and Guyana's Economy National independence bestov/ed certain nominal powers i n the hands of the l o c a l government. But, that such powers do not allow f o r an independent n a t i o n a l i s t development i s r e a d i l y recognized when i t i s noted that i t v/as precisely against such a development that the shibboleth of a n t i -communism was evoked. Indeed, as Fanon noted: ... the national middle class constantly demands the n a t i o n a l i z a t i o n of the econ-omy, and of the trading sectors. This i s because, from t h e i r point of view,, n a t i o n a l i z a t i o n does not mean placing the economy at the service of the nation and deciding to s a t i s f y the needs of the nation. For them, n a t i o n a l i z a t i o n does not mean governing the state v/ith regard to the new s o c i a l r e l a t i o n s whose grov/th i t has decided to encourage. To them, n a t i o n a l i z a t i o n quite simply means the transfer into native hands of those un f a i r advantages which.are a legacy of the c o l o n i a l period. 76 As I w i l l a t t e m p t t o show i n t h e n e x t c h a p t e r , a l t h o u g h t h e Government o f Guyana saw f i t t o n a t i o n a l i z e the b a u x i t e i n d u s t r y , i t s subsequent a c t i o n s i n d i c a t e t h a t i t had no i n t e n t i o n s o f r a d i c a l l y a l t e r i n g the s t r u c t u r e o f the economy based on t h e n a t i o n a l i z e d b a u x i t e i n d u s t r y . I t i s n e c e s s a r y t o add, however, t h a t t h e r e were o t h e r f a c t o r s t h a t m i l i t a t e d a g a i n s t t h e development o f an independent economy. Very b r i e f l y , because o f the network o f commercial r e l a t i o n s i n t o w h i c h t h e l o c a l economy i s drawn, i t becomes i n e x t r i c a b l y t i e d t o t h e needs and demands o f the i n d u s t r i a l i z e d market economies. The imbalance and i n e q u a l i t i e s i n t h e ownership o f i n d u s t r i a l f a c t o r s , a t t h e same t i m e , r e l e g a t e s t h e l o c a l economy t o t h e c r u d e s t forms of i m p o r t s u b s t i t u t i o n and r e s o u r c e e x t r a c t i o n . The o b j e c t o f t o t a l i n t e g r a t i o n i s a c h i e v e d by an i n t e r n a l i z -a t i o n by t h e l o c a l economy o f the needs and demands o f t h e f o r e i g n f i r m , w h i c h has the e f f e c t , t h e r e b y , o f s t r u c t u r i n g and f u r t h e r i n t e g r a t i n g t h e l o c a l economy i n t o t h e m e t r o p o l i t a n market. (These p o i n t s w i l l b e " d i s c u s s e d i n g r e a t e r d e t a i l i n th e n e x t c h a p t e r ) . To> r e c o r d the economic program u n d e r t a k i n g by the Government o f Guyana a f t e r independence i n 1966, i s t o i m m e d i a t e l y r e c o g n i z e t h e i n h e r e n t l i m i t a t i o n s and t h e sub-s i d i a r y r o l e i t p l a y s i n the l a r g e r i n t e r e s t o f m e t r o p o l i t a n p o l i t i c a l economy. As w i l l be n o t e d i n t h e next c h a p t e r , t h e 77 government, upon immediate n a t i o n a l i z a t i o n o f the b a u x i t e i n d u s t r y , was q u i c k t o a s s u r e b u s i n e s s i n t e r e s t s t h a t i t was n o t bent on n a t i o n a l i z a t i o n as a means of r e s t r u c t u r i n g t h e economy, hut was s i m p l y i n t e r e s t e d i n p a r t n e r s h i p , w i t h f a i r and adequate f e t u r n t o f o r e i g n c a p i t a l . The r e t e n t i o n o f the s e r v i c e s o f t h e C o n e l l R i c e and Sugar Company, w i t h t h e exclus'A i v e r i g h t t o s e l l s u r p l u s Guyanese r i c e , o u t s i d e t h e t r a d i t -i o n a l West I n d i a n market, and P h i l i p p B r o t h e r s as t h e s a l e s r e p r e s e n t a t i v e o f Guyana's b a u x i t e , f i r m l y p l a c e two o f Guyana's most i m p o r t a n t e x p o r t commodities under U n i t e d S t a t e s c o n t r o l . The r e a d i n e s s o f Chase Manhattan Bank t o l e n d t h e government $8 m i l l i o n (Guyana) t o c a r r y i t over the p e r i o d o f n a t i o n a l i z -a t i o n shows t h e l i g h t i n w h i c h U.S. i n t e r e s t s v i e w e d s u c h an u n d e r t a k i n g . A t t h e same t i m e , t h e U n i t e d S t a t e s r e p r e s e n t a t i v e on t h e World Bank who f i n a l l y approved a n o t h e r l o a n o f $10 m i l l i o n , w h i c h v/as t u r n e d down e a r l i e r , must have been i n f o r m e d as t o t h e r e a l meaning o f n a t i o n a l i z a t i o n . The r e a d i n e s s o f the U n i t e d S t a t e s Government t o renew Guyana's sugar quota, i s i n d i c a t i v e o f the a s s u r a n c e s t h a t were g i v e n t o w a r r a n t a w i l l -i n g n e s s t o t r a d e . The sugar q u o t a i n a d d i t i o n , c o mpleted t h e dependence o f Guyana on American g o o d w i l l , s i n c e i n 1971, sug a r r i c e and b a u x i t e a c c o u n t e d f o r over 90 p e r c e n t o f Guyana's domestic e x p o r t s . I f such i n d i c e s a r e t r i v i a l i n t h e c o n s i d e r -a t i o n o f t h e e x t e n t t o w h i c h Guyana became i n c r e a s i n g l y a p a r t 78 o f the U n i t e d S t a t e s c o r p o r a t e s t r a t e g y , w i t n e s s , f o r example, the b e h a v i o u r o f t h e U n i t e d S t a t e s Government and c o r p o r a t i o n s towards t h e n a t i o n a l i z a t i o n s u n d e r t a k e n hj A l l e n d e . I n a d d i t i o n , t h r o u g h t h e E x t e r n a l Trade Bureau the government p l a c e d a 10 p e r c e n t i m p o r t s u r c h a r g e on a l l goods e n t e r i n g • 49 Guyana from th e Communist c o u n t r i e s . The i n t e n t i s o b v i o u s : r e s e r v i n g the Guyanese market f o r t h e w e s t , and more s p e c i f i c -a l l y t h e i n d u s t r i a l i z e d economies o f Europe and N o r t h A m e r i c a . The most a m b i t i o u s i n t e r n a l r e f o r m program u n d e r -t a k e n by t h e government so f a r i s t h e much p u b l i c i s e d " C o - o p e r a t i v e R e p u b l i c " . As t h e Prime M i n i s t e r saw i t : "... the c o - o p e r a t i v e movement s h o u l d become the main s e c t o r o f the n a t i o n ' s economic l i f e ... I t w i l l be an independent s e c t o r of a mixed economy a n d - w i l l be f u l l y r e c o g n i z e d and a s s i s t -ed as such'". The s o c i a l and economic base f o r t h e e n v i s a g e d C o - o p e r a t i v e R e p u b l i c v/as t h e v i l l a g e s and o u t l y i n g communities, who', h o p e f u l l y , v/ould see t h e need f o r c o - o p e r a t i o n i n l a b o u r , g i v e n t h e s m a l l s i z e o f f a r m s . T h i s , i n a d d i t i o n v/ould n e c e s -s a r i l y r e s u l t i n an economy o f c a p i t a l e x p e n d i t u r e , g r e a t e r p r o d u c t i v i t y , b e t t e r p l a n n i n g and t h u s one b e t t e r a b l e t o f u l -f i l l t he needs o f t h e community. The s h o r t c o m i n g o f t h e scheme, however, q u i c k l y made t h e i r appearance. I n t h e f i r s t place", the n e c e s s a r y p o l i t i c a l power f o r t h e r u n n i n g of a u t o -nomous and independent c o - o p e r a t i v e s was l a c k i n g . By a d o p t i n g 79 t h e scheme o f " c o - o p e r a t i v e " t h e government p l a c e d a t the d i s p o s a l o f t h e M i n i s t r y o f C o - o p e r a t i v e s , f u n d s f o r t h e o r g a n i z a t i o n and r e o r g a n i z a t i o n o f v i l l a g e s and o t h e r s m a l l c o m m u n i t i e s . T h e o r e t i c a l l y , c o - o p e r a t i v e s v/ould he a b l e t o a p p l y f o r such funds on t h e b a s i s o f t h e p r o j e c t s u n d e r t a k e n . These p r o j e c t s , o f c o u r s e , had t o be approved by t h e m i n i s t r y . As i t t u r n e d o u t , t h e m i n i s t r y v/as n o t h i n g more t h a n a patronage s o c i e t y " , geared t o s e r v e p o l i t i c a l hav/ks o f t h e p a r t y . "Even t h e M i n i s t e r o f C o - o p e r a t i v e s h e r e has a c o - o p e r a t i v e . H i s name i s H a m i l t o n Green"",' and he happens t o be. Burnham's c o u s i n ; h i s co-operative", t h e G r e e n l a n d C o - o p e r a t i v e S o c i e t y , a p p a r e n t l y s e r v e s t h e f a m i l y n i c e l y r , as a c o n d u i t f o r government c o n t r a c t s " . But t h e c o - o p e r a t i v e scheme f a i l e d f o r o t h e r immediate r e a s o n s . W h i l e i t p u b l i c l y c l a i m e d i t s i n t e n t i o n o f r e o r g a n i z i n g Guyanese s o c i e t y on a d i f f e r e n t b a s i s , the p l a n n i n g and economic w h e r e w i t h a l f o r such an .undertaking were a l l but a b s e n t . In the f i r s t p l a c e t h e r u r a l p r o l e t a r i a t and t e n a n t f a r m e r s were m o s t l y E a s t I n d i a n s and s u p p o r t e r s of Jagan who saw c o - o p e r a t i v e s as a means o f e n s u r i n g g r e a t e r c o n t r o l o f t h e i r s o c i a l and economic l i v e s . Thus from i t s v e r y i n c e p t i o n t h e c o - o p e r a t i v e movement had t o e x c l u d e t h e l a r g e s t segment o f Guyanese popu-i l a t i o n on v/hom i t depended i f i t were t o s u c c e e d . Secondly", i t i s d o u b t f u l t h a t the government c o u l d have done a n y t h i n g more t h a n pay economic l i p s e r v i c e t o the scheme, g i v e n t h e monumental economic u n d e r t a k i n g i n v o l v e d , e s p e c i a l l y when the 80 government v/as caught i n a s i t u a t i o n o f mounting i n f l a t i o n and s p i r a l l i n g d e f i c i t s p e n d i n g . " F i n a l l y , from a r e v i e w o f some o f t h e p r o j e c t s u n d e r t a k e n , i t seems t h a t t h e e n t i r e scheme was n o t h i n g more t h a n a g i g a n t i c propaganda e f f o r t . As one j o u r n a l i s t q u i t e c r i s p l y commented: "Too much propaganda and t o o l i t t l e planning,.;,went i n t o t h e c o - o p e r a t i v e movement. The b e s t t h a t can be s a i d f o r t h e experiment i s t h a t the i n e v i t -a b l e d i s a s t e r s have g i v e n the .Guyanese something t o joke a b o u t . A c o - o p e r a t i v e d a i r y c o l l e g e v/as e s t a b l i s h e d w i t h so much f a n f a r e and r i b b o n c u t t i n g t h a t no one n o t i c e d t h a t t h e r e v/as no g r a z i n g l a n d anywhere i n the a r e a , and now a t r u c k l e a v e s the-' c o l l e g e e v e r y morning c a r r y i n g e i g h t w o r k e r s who buy g r a s s , c u t i t and fesing i t back by f o u r i n t h e a f t e r n o o n " . I t . i s n o t h a r d t o s e e , t h a t s u c h e f f o r t s u l t i m a t e l y c o s t more t h a n t h e y can e v e r hope t o produce. At t h e same t i m e , the government has been b o a s t i n g o f i t s achievements i n o r g a n i z i n g CARICOM '(Caribbean Common Mark e t f o r m e r l y t h e C a r i b b e a n Free Trade A s s o c i a t i o n ) ' , s t a t i n g t h a t i t s a b r a i n c h i l d o f the government. As t h e " a t t e n d i n g p e d i a t r i c i a n s " we must pronounce a deformed baby. I n the case o f t h e b a u x i t e i n d u s t r y , t h e o n l y major change t h a t the govern' ment has been a b l e t o p o i n t t o so f a r has been the replacement o f wheat f l o u r w i t h Cassava f l o u r ( a l o c a l l y grown "ground p r o v i s i o n " ; as the f l o c u l l e n t i n the p r o c e s s i n g o f a l u m i n a . However, i t seems t h a t t h e Government has much more a m b i t i o u s 81 p r o j e c t s i n mind. Upon immediate n a t i o n a l i z a t i o n o f DEMBA i n 1971, t h e government announced t h a t much o f t h e "bauxite r e s e a r c h t r a d i t i o n a l l y r e s e r v e d f o r N o r t h A merica, would now 54 he u n d e r t a k e n i n Guyana. However, g i v e n t h e c o s t s a s s o c i a t e d w i t h s u c h r e s e a r c h i t i s d o u b t f u l t h a t any e x t e n s i v e and, t h e r e f o r e , b e n e f i c i a l r e s e a r c h can be u n d e r t a k e n l o c a l l y . I n r e g a r d s t o t h e c o n t r o l o f t h e economy t h e . government's most s u b s t a n t i v e u n d e r t a k i n g so f a r has been t h e n a t i o n a l i z a t i o n o f s e v e r a l a f f i l i a t e s o f MNCs", i n a d d i t i o n t o DEMBA. These' i n c l u d e d : ( l ) t h e o t h e r b a u x i t e m i n i n g company, Reynold's M e t a l s ; (2) Sandbach P a r k e r and Company, an a f f i l i a t e o f O l i v e r J e s s e l ' s h o l d i n g s , w i t h 62 p e r c e n t s h a r e s i n Diamond L i q u o r s , and 20 p e r c e n t i n Demerara Sugar T e r m i n a l s ; and ( 3 ) Timbers L i m i t e d , an a f f i l i a t e o f t h e Commonwealth Development C o r p o r a t i o n . Though the s e n a t i o n a l i z a t i o n s w a r r a n t more t h a n c u r s o r y d i s m i s s a l as a p o l i t i c a l g e s t u r e , t h e i r a c t u a l v a l u e i s n e g l i g i b l e when compared t o the t a k e o v e r o f DEMBA. Moreover, t h e i r v a l u e i n terms o f Government c o n t r o l o f t h e economy i s q u i c k l y u n d e r s c o r e d , when i t i s n o t e d t h a t t h e government a c c e p t e d an i n v e s t m e n t package o f $20 m i l l i o n (Guyana) f r o m the Commonwealth Development C o r p o r a t i o n . " ^ "What i t does s i g n i f y " , i s t h e ch a n g i n g c h a r a c t e r o f f o r e i g n investments", based on t h e a s s u m p t i o n t h a t ( l ) government c o n t r o l o f the e x t r a c t i v e and p r i m a r y s e c t o r s would s t o p the 82 f l o w o f v a l u e s t r a n s f e r r e d a b r o a d ; and (2) the i n v e s t m e n t s i n i m p o r t s u b s t i t u t i o n and o t h e r m a n u f a c t u r i n g c r e a t e more jobs and t h e n a t u r a l " m u l t i p l i e r e f f e c t s " b e n e f i t s the e n t i r e economy. I t i s q u e s t i o n a b l e , however, whether such i n v e s t m e n t s can l e a d t o an independent c a p i t a l i s t development. I s a m a t t e r of f a c t , i t r e s u l t s i n f u r t h e r dependence s i n c e a h i g h r a t i o o f such c r u c i a l i n p u t s as t e c h n o l o g y , energy, s k i l l e d manpower, e t c . must s t i l l be o b t a i n e d from t h e m e t r o p o l i t a n c e n t r e s . In the foregoing", I have a t t e m p t e d t o demonstrate t h a t t h e s t a u n c h a n t i - c o l o n i a l n a t i o n a l i s m o f the PPP v/as f o r c i b l y subdued and s u p p l a n t e d by t h e m a c h i n a t i o n s o f metro-p o l i t a n p o l i t i c s . F u r t h e r , t h a t p r e c i s e l y because o t t h i s r e a s o n , t h e attempt of t h e s u c c e e d i n g government t o r e o r g a n i z e the economy i s not a r a d i c a l e l i m i n a t i o n o f t h e dependent-u n d e r d e v e l o p e d c o l o n i a l economy, d e s p i t e i t s n a t i o n a l i z a t i o n p o l i c i e s . Rather", i t i s an i n h e r e n t l y l i m i t e d a t t e m p t , s i n c e a l l i t seeks t o do i s t o r e f o r m t h e economy,based on t h e sub-s t i t u t i o n o f t h e i m p e r i a l b o u r g e o i s i e w i t h i t s own l o c a l n a t i o n a l and comprador c o u n t e r p a r t s . However, t h i s r e p r e s e n t s an i m p o r t a n t i d e o l o g i c a l b r e a k w i t h t h e so c a l l e d " c o l o n i a l m e n t a l i t y " , and has a number o f i m p l i c a t i o n s f o r t h e u n d e r -dev e l o p e d economy. These can b r i e f l y be c a t e g o r i z e d a s : ( l ) n a t i o n a l i s m i s seen as an embodiment o f t h e whole p e o p l e , 8 3 where workers and c a p i t a l i s t s a l i k e must f o r e g o t h e i r p a r t i c u l a r i n t e r e s t s t o the g e n e r a l i n t e r e s t o f t h e s t a t e ; ( 2 ) a s s u r e s g r e a t e r m a n e u v e r a b i l i t y o f t h e p o s t - c o l o n i a l s t a t e i n i n t e r n a t i o n a l p o l i t i c s ; ( 3 ) a b o u r g e o i s e l i m i n a t i o n o f the c o l o n i a l " e n c l a v e economy", by i n c r e a s i n g ownership and c o n t r o l o f t h e p r i m a r y s e c t o r s o f t h e economy; and ( 4 ) c h a n g i n g p a t t e r n o f f o r e i g n o f i n v e s t m e n t s , from t h e t r a d -i t i o n a l e x t r a c t i v e r e s o u r c e s e c t o r t o t h e m a n u f a c t u r i n g and t e c h n o l o g i c a l l y advanced s e c t o r s , i n c l u d i n g t e c h n o l o g y i t s e l f . But as I w i l l a t t e m p t t o show, v / i t h t h e n a t i o n a l i z e d b a u x i t e i n d u s t r y o f Guyana i n the n e x t c h a p t e r , such r e f o r m s a r e i n c a p a b l e o f l e a d i n g t o an indepe n d e n t n a t i o n a l i s t development. 8 4 FOOTNOTES 1. Williams, W.A. Rise of An American World Power Complex i n Houghton, N. (ed.) Struggle Against History: US Foreign Policy i n an Age of Revolution (Simon and Schuster, New York, 1 9 6 7 1 0 "Empire i s American as apple pie". Williams op. c i t . p. 1. See also his The Roots of the Modern  American Empire (Random House,. New "York, 1969j "~ 2. Williams, W.A.•The Tragedy of American Diplomacy ( D e l l Publishing Co.', New ^ork, 1962). "American leaders went to war with Spain as part of, and as the consequence of, a general outlook which externalized the opportunity and the r e s p o n s i b i l i t y f or America's domestic welfare; broadly i n terms of vigorous overseas economic expansion into l a t i n America, and Asia; as ... and the separate but nevertheless related necessity of acting i n Asia to prevent the exclusion of American interest i n China", op. c i t . p. 37. 3. Crassweller, R. The Caribbean Community: Changing • Societies and US Foreign PQlicy(Praeger Publishers, New York, 1972) p. 52. See also Blanshard, P. • Democracy and  Empire i n the Caribbean. ^The Macmillan Co., New York, 1947J. " I t was 'Teddy' Roosevelt who had sounded the keynote f o r t h i s period of American expansion i n the Lat i n America by creating i n 1904 a new v a r i a t i o n of the doc-t r i n e of inte r n a t i o n a l police power as a co r o l l a r y to the Monroe Doctrine. Under t h i s c o r o l l a r y the US had the ri g h t to intervene i n any Latin American Country ..." op. c i t . p. 312. 4. QWilliams, E.E. From Columbus; to Castro: The History of the Caribbean 1392-1969 (Andre Deutsch J "London," 1970. The Case of H a i t i i s perhaps the most in t e r e s t i n g and in s t r u c t i v e i n showing how brute force v/as employed to exact large economic concessions, See Lowenthalj D. West Indian Societies, (Oxford University Press, New York, 1972) "... the National C i t y Bank of New Yorkj having bought up the outstanding French loan to H a i t i , revised the constitution and ran H a i t i i n i t s own in t e r e s t s , I*and was opened up to foreign ownership, freedom of speech c u r t a i l e d , marital law imposed, and v i r t u a l slave-labour reintroduced under the United States Marines, who k i l l e d thousands of Haitains i n order to pacify the country, b u i l d a few roads, and c o l l e c t customs receipts "./.op. c i t . p. 235. " ' • 85 5. "Van Alstyne, R.W. The-Rising American Empire (Quadrangle Books", Chicago', 1965), p. 166. 6. Jamaica represented the most advanced Caribbean colony i n t h i s trend. See•Eisner,•A. Jamaica 1850-1950 (Manchester University Press, London, 1961) pp. 269-270. 7. Williams, op. c i t . p. 426 8. Quoted i n Williams, op. c i t . 9. Quoted i n Williams, E.E. History of the People of Trinidad and Tobaga, (Praeger Publishers, %w York, 1964), pp. 26T-10. Galeano, E. Cuatamala. Occupied Country (Monthly Review, Press, New York, 1969). 11. Walton, R. Cold War and Counterrevolution: The "Foreign  Policy of ^ohn Kennedy. (Penguin Books. Inc.; Baltimore Maryland, 1973) pp. 35-59 and pp. 208-215. 12. Galeano, E. Open Veins; of L a t i n America, (Monthly Review Press, New York, 1975), p. 90. 13. The North American Congress;for l a t i n America, The US M i l i t a r y Apparatus (Berkely, C a l i f o r n i a , August 1972')" p. 94-95. 14. Kennedy, J. Public Papers (Washington, D.C. 1961), p.. 172. Quoted i n Walton, R. op. c i t . p. 213. 15. Project Gamelot, Working Paper, December 5th, 1964, i n Horowitz, 1.1. (ed.) The Rise and P a l l - o f Project Camelot, (Massachusetts I n s t i t u t e of Technology, Cambridge,"1967), p. 51. 16. Steel", R. Pax i&mericana: The Cold War Empire and the-P o l i t i c s o f Counterrevolution (Viking Press, N e w York, T970;, p. 219. 17. op. c i t . p. 200. 18. op. c i t . p. 201. 19. Quoted i n Steel, op. c i t . p. 202. 86 20. Kolko, Joyce and Gabriel: The Limits of Power: The  World and United States Foreign P o l i c y , 1'945-T95^ (Harper and Row Publishers, New York, 1972), p. 72. 21. Dutchman, H. The Crown Colony System of Government: With Special Reference to Guyana (University of Guyana", Georgetown, 1970). 22. Jagan, C. The West on T r i a l : The Fight-for Guyana's Freedom, (Seven Seas Books, " l a s t B e r l i n , 1971), p.°~Toi. 23. West India Royal Commission, 1938-1939: Recommendations, (His Majesty's Stationary Office, London, 1940), p. 25-26. 24. Lewis', G. The growth, of the Modern West Indies, (Monthly Review Press, New York, 1968), p. 273. ~~ 25. For a general discussion of the concept of fdivided and r u l e " see Morock, R. The Heritage of S t r i f e : The Effects of C o l o n i a l i s t "Dividemand Rule" Strategy Upon Colonized Peoples. Science and Society, Vol. XXXVIII, No. 2,' Summer 1973. This i s not to give credence, however, to the concept of a dual economy, but simply means that there i s an immobility of labor between sectors. Por a detailed discussion see Laclau, E. Feudalism and Capitalism in;, l a t i n America, New Be f t Review, No. 67, May-June 1971", and Brown', M. B., • The Economics of Imperialism, (Penguin Books", Middlesex, 1974), p. 263-265. 26. Williams, E.E. Capitalism and Slavery, (Capricorn Books, New York, 1966) p. 4. 27. Quoted i n Thakur, A. Guyana: The P o l i t i c s • o f Race and  Class, 1955-1964. (Unpublished M.A. Thesis, Department•, of Anthropology, University of Alberta, Edmonton, 1973, P. 47. 28. Lutchman, op. c i t . p. 18. 29. ^or two excellent recent reviews see Kramer, Jane, Letter Prom Guyana, The New Yorker, Vol. 50, 16 September,'1974 and Chodos, Robert, Visions of Guyana: The Movement to Criticize;Cheddi Jagan and the Reynolds Metal Company, Last Post", Vol. 4, No. 6, A p r i l , 1975. 30. Gordon Lewis noted: "The charges brought a g a i n s t the movement's sho r t - l i v e d government of 133 days to j u s t i f y 87 the B r i t i s h s u s p e n s i o n were p i t i a b l y u n c o n v i n c i n g ... I t i s d i f f i c u l t n o t t o r e a d t h e w h i t e Paper and n o t become aware o f a s e r i o u s d e c l i n e i n t h e t r a d i t i o n a l v e r a c i t y and f e a r l e s s r e s p e c t f o r the f a c t s u s u a l l y a s s o c i a t e d w i t h B r i t i s h o f f i c i a l documents, n o t l e a s t o f a l l i n t h e f i e l d o f t h e c o l o n i a l e m p i r e " , op. c i t . p. 271-272. Por t h e o p p o s i t e v i e w see H a l p e r i n , E. Racism and Communism' i n B r i t i s h Guiana J o u r n a l o f I n t e r - A m e r i c a n Studies", V o l . V I I , ; No. 1, J a n u a r y 1965, and Simms, P. T r o u b l e  i n Guyana', (George A l l e n and Unwin, London, 1966J. 31. Jagan, ops c i t . p. 176, a l s o Thakur, op. c i t . p. 80. 32. H e n f r e y , C. F o r e i g n I n f l u e n c e i n Guyana: The S t r u g g l e Por Independence', i n De K a d t , E. P a t t e r n s o f F o r e i g n  I n f l u e n c e i n t h e C a r i b b e a n ( O x f o r d U n i v e r s i t y P r e s s , London, 1 9 7 2 p . 76. 33. Kramer, op. c i t . p. 108. 34. L e w i s , op. c i t . p. 273. 35. pp. c i t . p. 273. 36. Reno,•P. The O r d e a l o f B r i t i s h Guiana, ( M o n t h l y Review Press", -New l o r k , 1964J, p. 18. 37. Smith,-R.T. B r i t i s h G uiana, ( O x f o r d U n i v e r s i t y P r e s s , London", 19621, p. 175. 38. Jagan, op. c i t . p. 187. 39. op. c i t . p. 182. 40. Quoted i n Thakur",'. op. c i t . p. 76. 41. op. c i t . p. 76. 42. Thakur, op. c i t . p. 76. 43. B l a c k b u r n , R. Cuba and t h e Super Powers, i n De K a d t , op. c i t . p. I3~n " ' 44. Quoted i n H e n f r e y , op. c i t . p. 70. 45. - H e n f r e y , op. c i t . p. 70-71. 88 46. op. c i t . p. 70. 47. Schlesinger^ J r . Ai A Thousand "Days, (Houghton M i f i i n Co., Boston, Mass., 1965), p. 779. 48. Fanon, F. The Wretched of the Earth, (Grove Press, New York, 1968;, p. 153. ~ 49. Sukdeo, P. Trading Strategies and Economic Development  i n Guyana;, (Department of P o l i t i c a l Science, University of Guyana, Occasional Paper, No. 5, 1973), p. 31. 50. Burnham, L.;F.S. A Vision of the Co-operative Republic, i n Searwar. 1. The Co-Op Republic:Guyana 1970. (George-town, 1970; p. 12. Por,an assessment of the i n a b i l i t y of the mixed economy to provide a c r i s i s - f r e e c a p i t a l i s t development see. Mattick, P. Marx and Keynes: The  Limits of the Mixed Economy. 51. Kramer, op. c i t . p. 117. 52. op. c i t . p. 117. 53. N e w s from Guyana", Linkages, op. c i t . 24 A p r i l , 1971, p. 2. §4. op. c i t . Research to be Done i n Guyana', 20 March, 1971, p. 2. 55. Barbados Advocate; Guyana'Nationalizes Jessel Holdings, 28 Hay, 1975, p. 10. 56. News from Guyana; Commonx/ealth Development Corporation to Invest Another $20 M i l l i o n , 13 February, 1971, p. 2. CHAPTER THREE: IMPERIALISM AND ECONOMIC NATIONALISM I : Changing C h a r a c t e r o f F o r e i g n Investments Our o b j e c t , i n t h i s t h e main c h a p t e r , i s t o show hov/ t h r o u g h t h e i r a f f i l i a t e s , MNCs produced the "development o f dependent under-development" i n t h e C a r i b b e a n w h i l e governments i n the a r e a were s o r t i n g out t h e r u b r i c s o f c o n s t i t u t i o n a l democracy. F u r t h e r , as s t a t e d i n t h e c h a p t e r on i m p e r i a l i s m , i t w i l l be shown t h a t the r e c e n t wave o f " p a r t i c i p a t o r y development schemes" and even n a t i o n a l i z a t i o n t h a t a l l o w e d f o r g r e a t e r l o c a l c o n t r o l does n o t , i n the l e a s t , put an end t o the domination-dependence w h i c h e x i s t s i n t h e Ca r i b b e a n . R a t h e r , i t r e p r e s e n t s changes i n the s t r u c t u r a l r e l a t i o n s h i p between t h e advanced c a p i t a l i s t c o u n t r i e s and th e u n d e r d e v e l o p e d c o u n t r i e s ' , v / i t h i n t he framework o f i m p e r i a l i s m . As c h a r a c t e r i z e d by F r e d H a l l i d a y : " T h i s t r a n s i t i o n from d i r e c t t o i n d i r e c t c o n t r o l and, i n some c a s e s , t o an i n t e r -dependence d i d not n e c e s s a r i l y i n v o l v e an o v e r a l l weakening o f c a p i t a l i s t power. 90 In so f a r as the economies o f the f o r m e r l y backward c o u n t r i e s expanded, the advanced c a p i t a l i s t c o u n t r i e s were able t o d e r i v e b e n e f i t s from'them; they a c q u i r e d more raw m a t e r i a l s , they c o n t r o l l e d key s e c t i o n s of the new expanded f i n a n c i a l and manu-f a c t u r i n g s e c t o r , and they .'had l a r g e r export markets. In r e t u r n , they conceded g r e a t e r p o l i t i c a l autonomy to the r u l i n g c l a s s e s i n the f o r m e r l y c o l o n i a l s t a t e s " . What i t amounts t o , simply, i s a f u r t h e r deepening and t h e r e -f o r e s t r e n g t h e n i n g o f the process of c a p i t a l i s t development on a g l o b a l s c a l e , w i t h the added dimension o f i n c o r p o r a t i n g 2 j u n i o r p a r t n e r s i n t o the system. The i n c r e a s i n g p r o l i f e r a t i o n of import s u b s t i t u t i o n and the spread o f i n d u s t r i a l and manu-f a c t u r i n g concerns i n the under-developed c o u n t r i e s provided the economic b a s i s f o r t h i s change. The c r u c i a l p o i n t o f divergence i s not onl y i n the p a t t e r n of investments but a l s o i n the ownership and c o n t r o l of such investments. Thus", i t i s of dubious t h e o r e t i c a l accuracy to speak of a " c o n t i n u i n g c o l o n i a l i s m " , " n e o - c o l o n i a l i s m " , or any other form of c o l o n -i a l i s m f o r t h a t matter, which s t r e s s e s c o n t i n u i t y i n the o l d c o l o n i a l r e l a t i o n s h i p r a t h e r than the changing c o n t i n g e n c i e s of c a p i t a l i s t development. 91 Table 1 DIRECT AMERICAN INVESTMENTS IN LATIN AMERICA  BY SECTORS 1897-1929, IN MILLION OF U . S . DOLLARS ECONOMIC SECTOR 1397 TOTAL 9 1908 TOTAL % 1919 TOTAL 1929 TOTAL % 1950 TOTAL % AGRICULTURE 56.5 18.6 158.2 21 . 1 500.1 25-3 877.3 \k.\ a a MINING 79.0 26.0 302.6 hO. k 660.8 3 3 . * 80! .k 22 .0 628.0 OIL 10.5 3-5 68 .0 9. 1 326.0 16.5 731-5 20.1 1233-0 27. RAILROADS 129.7 1.2.6 110.0 ]h. 7 211.2 10.7 230.1 6-3 927 -0 20. U T I L I T I E S 1C.1 3.3 57-5 6. 9 101.0 5.1 575.9 15-8 MANUFACTURING 3.0 1.0 30.0 k. 0 8k.0 k.l 231-0 6.3 780.0 17. TRADE 13.5 k.k 23-5 3- 1 71.0 3.6 119.2 3-3 877-0 19-OTHERS 2.0 0.6 5-0 °-7 23-5 1.2 79.it 2.2 1 a : i n c l u d e d i n t r a d e and o t h e r i n d u s t r i e s S o u r c e : E l F i n a n c i a m i e n t o E x t e r n o de A m e r i c a L a t i n a . C e p a l , U n i t e d N a t i o n s , December 196^ 'Table 2 PRIVATE INVESTMENTS FROM THE UM TED STATES IN LATIN AMERICA BY PR 1 NC1 PAL SECTORS. 1951- 1962, 1M . M l L L I O N S OF U.S DOLLARS INDUSTRIAL SECTOR 1951-1955 AMOUMT % 1956-1960 AMOUNT % 1961-1962 AMOUNT % 1951-1962 AMOUNT % TOTAL 1,751 100 3,398 100 616 iOO 5,765 100 OIL 3*t8 20 1 ,571 1)6 -7 -1 1,912 33 MINING 339 119 301 9 146 7 686 12 MANUFACTURING 613 35 791 23 370 60 1,77i» 31 TRADE 6 OTHERS !i5! 26 735 22 207 3* 1,393 Source: U n i t e d S t a t e s D o D a r t m c n t o f Commerce B a l a n c e o f P a y m e n t s . S t a t i s t i c a 1 Supplement t o Survey o f C u r r e n t B u s i n e s s (1963) and S u r v e y o f C u r r e n t B u s i n e s s ( S e v e r a l numbers f r o m I 9&3 a n d 1961t)5 92 Tables 1 and 2, show that United States private investments i n l a t i n America took a decisive turn between 1929 and 1950. In 1929 investments i n manufacturing accounted for only 3.3 percent of t o t a l US investments, while i n 1950 i t amounted to more than 17 percent. The subsequent r i s e has been even more phenomenal, while manufacturing averaged 35 percent between 1951 and 1955, by 1961-1962 i t had reached the staggering figure of 60 percent of t o t a l US private investments i n l a t i n America. This change, however, does not mean an independent c a p i t a l i s t development, but one fraught with the vagaries of dependence based on the crudest forms of import substitution and production f o r a world market. "Such modern production as was developed i n the colonized areas v/as primarily f o r the world rather than the l o c a l market.. The -growth of the seaport i s evidence of t h i s , as i s the absence of i n t e r i o r communication networks ... In a l l c o l o n i a l areas, the contribution of the l o c a l peoples to indust-r i a l development has mainly taken the form of labour". The combined effect of both, import substitution and production f o r a world market, results i n further dependence since the l o c a l market becomes increasingly integrated into the market demands of the advanced c a p i t a l i s t countries. This dependency has become p a r t i c u l a r l y pronounced i n recent years with the change of investment patterns from raw materials and agriculture 93 to i n dustry. 1 The high technological content of such invest-ments further reinforces the dependency structure because: (l) there i s a monopolization of technology; and (2) monopoly prices must be paid f o r such technology; and thus increasing the debt burden v/hich already e x i s t s . "Payments;by these (underdeveloped) countries for fees, amounted to approximately 7% of t h e i r combined exports and to a l i t t l e more than h a l f of 1% of t h e i r combined gross domestic product. The t o t a l cost for such payments for 13 developing countries, repres-enting 65 percent of the t o t a l population and 56 percent of the t o t a l gross domestic product of developing countries, i s estimated at approximately t l . 5 b i l l i o n , which amounts to more than h a l f of the flow of direct private foreign investments to developing countries. These payments are growing steadily at a rate v/hich i s estimated by UNO TAD Secretariat at about 20 percent per annum on the average and are absorbing an increasing proportion of the export earnings of develop-ing countries". In addition, the new arrangement provides the MNCs v/ith a number of c r u c i a l guarantees: ( l ) Guarantees against n a t i o n a l i z a t i o n or outright expropriation with " f a i r " and "adequate" compensation; ( 2 ) an expressed portion of p r o f i t s -usually as part of the participatory scheme - v/ith free repat-r i a t i o n of such p r o f i t s and tax concessions; ( 3 ) Guarantees of minimal losses through labour disputes. Since i t i s only the l o c a l governments that have the v/herewithal to participate i n such schemes i t s fortunes become more or less dependent on 94 t h e i n c r e a s i n g p r o d u c t i v i t y o f such v e n t u r e s , w i t h t h e r e s u l t t h a t l a b o u r s t a b i l i z a t i o n becomes t h e s i n e qua non o f i t s e x i s t a n c e ; and, (4 ) a s s u r e d s u p p l i e s o f raw m a t e r i a l and r e s o u r c e s and a s a f e market f o r t e c h n o l o g y and o t h e r i n d u s t -r i a l goods o f t h e advanced c a p i t a l i s t c o u n t r i e s . I I : F o r e i g n C a p i t a l and t h e C a r i b b e a n Economies The h i s t o r i c a s s o c i a t i o n o f the C a r i b b e a n v / i t h c o l o n i a l e m p ires, has made i t a s a f e haven f o r f o r e i g n i n v e s t o r s ; f i r s t by i n d i v i d u a l B r i t i s h p l a n t e r s and t h e n l a t e r , v / i t h t h e f a l l o f t h e " p l a n t e r c l a s s " , by B r i t i s h f i n a n c i a l f i r m s t h a t i n h e r i t e d t h e i n t e r e s t s o f t h e ' " p l a n t e r c l a s s " . By the t u r n o f the 2 0 t h C e n t u r y t h e p r o c e s s o f m o n o p o l i z a t i o n o f the W est I n d i a n s u g a r i n d u s t r y v/as almost c o m p l e t e d , v/hen f i r m s l i k e Booker B r o t h e r s M c o n n e l l and Company and Tate and l y l e had s u c c e s s f u l l y outmaneuvered t h e i r comp-e t i t o r s t o t a k e . e f f e c t i v e c o n t r o l . The d i s c o v e r y o f commercial q u a n t i t i e s o f o i l i n T r i n i d a d i n the 1850"s saw a n o t h e r i n v a s i o n o f f o r e i g n i n v e s t o r s and s p e c u l a t o r s . The c l o s e p r o x i m i t y t o No r t h .America and growing i n t e r e s t s of the U n i t e d S t a t e s a l l o w e d f o r c o n t i n u o u s s u r v e i l l a n c e by American c a p i t a l o f i n v e s t m e n t o p p o r t u n i t i e s i n t h e r e g i o n . B r i t i s h Empire t r a d e and t a r i f f agreements saw an early i n t e r e s t by Canadian h a n k i n g and i n s u r a n c e companies i n the a r e a . The d i s c o v e r y o f 95 bauxite deposits i n Guyana i n 1910 saw another wave of foreign investors eager to cash i n on the new found wealth. The end res u l t i s that by the 1960's the major sectors of Caribbean economies were foreign owned. TABLE 3 VALUE OE DOMESTIC EXPORTS OP SPECIFIED COMMODITIES (FOREIGN OWNED) SHOWING PERCENTAGE OF TOTAL DOMESTIC EXPORTS FOR 1961 (Value of F.O.B. ± n thousands of West Indian (W.I.) d o l l a r s : 12 W.I. equals $1 U.S.) COMMODITIES AMOUNT JAMAICA AMOUNT TRINIDAD % AMOUNT GUYANA % ALUMINA 81,048.9 27.8 BAUXITE 62,682.7 21.5 28,475.0 19.4 SUGAR 68,298.2 23.5 42,376.2 7.3 56,846.3 38.8 RUM 5,269.9 1.8 1,853.0 0.3 3,056.8 2.1 MOLASSES 4,532.2 1.6 - ' 2,698.2 1.8 PETROLEUM AND PETROLEUM PRODUCTS 493,917.7 85.2 TOTAL 221,831.9 76.2 538,146.9 9 2 . 8 91,076.3 62.1 Source: Caribbean Economic Almanac 1964-1966. As the above table shows f o r Jamaica i n 1961 bauxite, sugar and t h e i r by-products accounted f o r more than three-quarters of the domestic exports, while f o r Trinidad i n the same year 96 sugar, petroleum and t h e i r by-products amounted to more than 90 percent of domestic exports. The importance of these sectors i n the export of these countries n a t u r a l l y places a heavy reliance on them f o r foreign exchange, and necessarily means„their increased importance i f the economy i s to generate the much needed c a p i t a l for i n t e r n a l development. However, i n the absence of controls', which experience has demonstrated i s d i f f i c u l t to i n s t i t u t e and poli c e , i f and when applied, such investments can and do produce s t r u c t u r a l d i s l o c a t i o n s , a drain on the economy and general dependence on the foreign sectors. As the west Indian economist, Lloyd Best, noted investments by MNCs "... form parts of wider i n t e r n a t i o n a l systems of resource a l l o c a t i o n . This Is true of the mining corporations, the sugar companies, the hotel chains, the banking, the hi r e purchase and insurance houses, the advertising companies, the newspapers, and t e l e v i s i o n and radio stations ... Insofar as there i s harmon-i z a t i o n among these concerns, i t i s for the most part achieved within the context of the metropolitan economies v/here they are based and not i n the peripheral econ-omies of the countries where the com-panies a c t u a l l y operate. Moreover, the p o l i c i e s of the corporations are deter-mined by t h e i r parent companies operating somewhere i n the northern hemisphere and not by l o c a l need to integrate industries and to increase interdependence between diff e r e n t sectors of the economy. The economy i s therefore hardly more than a locus of production made up of a number of fragments held tenuously together by government controls - themselves often 97 borrowed from elsewhere. In other words ... i t seems inherent i n the structure of in t e r n a t i o n a l corporations which operate i n the region that the Caribbean economies remain fragmented and unin-tegrated." This i s not meant, however, to underscore the r e l a t i v e growth that took place i n these economies as a r e s u l t of investments i n import substitution and manufacturing. These "created new and-growing demands f o r imports: f i r s t ' , f o r c a p i t a l and intermediate goods f o r the i n d u s t r i a l sector i t s e l f , second f o r consumers goods needed to s a t i s f y the new diver-s i f i e d demands from-, the groups whose incomes had grown". What i t does mean i s that the growth that has itaken place i n the underdeveloped economies i s a dependent one, r e l y i n g mainly on a few MNCs for essential goods and services. "Thus monopoly capitalism and develop-ment are not contradictors'- terms; dependent c a p i t a l i s t development has become a new form of monopolistic expan-sion i n the Third World". I l l : Bauxite. Alcan and Guyana's Economy Bauxite was f i r s t discovered i n Guyana by two government geologists, Sawkins and Brown, i n 1868 and 1873 12 respectively. Unfortunately, or perhaps fortunately, the "reddish d i r t " v/as not recognized as the precious ore i t was l a t e r to become. The f i r s t sample of bauxite deposit was analyzed by S i r John Harrison, the Government's Director of Science and Agriculture, i n 1910 and confirmed the e a r l i e r 98 s u s p i c i o n t h a t t h e " r e d d i s h d i r t " sample from C h r i s t i a n b u r g " , s i x m i l e s up t h e Demerara R i v e r from Georgetown, v/as i n d e e d b a u x i t e (AlgO^ILpO). i - ^ w a s found t h a t the a l u m i n a c o n t e n t o f t h e b a u x i t e d e p o s i t s v/as v e r y h i g h , and though t h e e x t r a c t i v e p r o c e s s v/ould be v e r y c o s t l y , because o f a heavy ov e r b u r d e n , the h i g h a l u m i n a c o n t e n t v/ould more t h a n compensate f o r any major u n d e r t a k i n g . The average c h e m i c a l c o n t e n t o f Guyanese b a u x i t e i s as f o l l o w s : Combined w a t e r 30 p e r c e n t , S i l i c a 6 p e r c e n t , T i t a n i a 2.5 p e r c e n t , I r o n Oxide 2.5 p e r c e n t and Alum i n a 59 p e r c e n t . T h i s compares f a v o u r a b l y w i t h Jamaican b a u x i t e where t h e a l u m i n a c o n t e n t ranges from 49-51 p e r c e n t . The Aluminum Company o f America's (ALCOA) "President", a t the t i m e A r t h u r "V. D a v i s , because o f h i s i n t e r n a t i o n a l c o n t a c t s and s u r v e i l l a n c e o f c o r p o r a t e a c t i v i t i e s f o r i n v e s t -ment o p p o r t u n i t i e s , soon l e a r n e d o f the new found d e p o s i t s . I n 1912 AlCOA's c h i e f e n g i n e e r , G.B. Mackenzie", was d i s p a t c h e d t o Guyana t o i n v e s t i g a t e t h e e x t e n t o f t h e new f i n d i n g s , under t h e g u i s e o f o b t a i n i n g l a n d f o r c i t r u s - f r u i t f a r m i n g . But ALCOA v/as not a l o n e I n t h i s scramble f o r b a u x i t e l a d e n Guyanese l a n d , and soon found i t s e l f i n a head on c o l l i s i o n f o r t h e r i c h d e p o s i t s o f t h e C h r i s tianburg-V/ismar d i s t r i c t . But l a w y e r s f o r t h e U n i t e d S t a t e s , i n an a n t i - t r u s t s u i t b r o u g h t a g a i n s t ALCOA i n 1939 and c o n t i n u e d i n 1945, n o t e d : 99 • ^ Th§ s t o r y o f ALCOA's b a u x i t e a c q u i s -i t i o n s i n B r i t i s h Guiana e v i d e n c e s i t s i n f l e x i b l e d e t e r m i n a t i o n t o a l l o w no p o t e n t i a l c o m p e t i t o r t o o b t a i n a f o o t -h o l d i n the aluminum i n d u s t r y t h r o u g h t h e p o s s e s s i o n o f d e s i r a b l e b a u x i t e d e p o s i t s . ALCOA's supremacy i n B r i t i s h Guiana was t h r e a t e n e d t v / i c e . I n each o f the s e i n s t a n c e s , i t a c t e d p r o m p t l y and e f f e c t i v e l y to-, remove any t h r e a t o f c o m p e t i t i o n " . The f i r s t i n t r u s i o n on ALCOA's monopoly in--Guyana's b a u x i t e came from Merrimac Chemical Company, a c l o s e a s s o c i a t e o f Sou t h e r n Aluminum Company, w h i c h v/as about t o e n t e r t h e alum-inum i n d u s t r y i n t h e U n i t e d S t a t e s , i n c o m p e t i t i o n w i t h ALCOA. " I t v/ould appear t h a t Merrimac's agents and Mackenzie p r a c t i c a l l y c o l l i d e d v / i t h one a n o t h e r on t h e banks o f the Bemerara R i v e r i n t h e summer o f 1914 i n t h e i r eagerness t o c a p t u r e B r i t i s h Guiana's b a u x i t e . T i t l e t o c e r t a i n p r o p e r t i e s was d i s p u t e d by bo t h p a r t i e s . Then t h e y agreed t o s p l i t t he s p o i l s between them ... and t o a c q u i r e a d d i t i o n a l p r o p e r t y j u s t as f a s t as i t - , can be had a t a r e a s o n a b l e p r i c e " * ALCOA", however, v/as not p l e a s e d v / i t h the p a r t n e r s h i p and s i x months l a t e r bought o f f Merrimac-'s 50 p e r c e n t i n t e r e s t . As p a r t o f the deal", Merrimac was gu a r a n t e e d t h i r t y y e a r s s u p p l y .of aluminum from ALCOA. Merrimac out o f the way, ALCOA s e t about a c q u i r i n g t h e r e s t of t h e b a u x i t e l a d e n l a n d , r e p o r t e d l y 20,000 a c r e s a t two d o l l a r s and f i f t y c e n t s per a c r e s and an a d d i t i o n a l 5,500 a c r e s l e a s e d from t h e c o l o n i a l Government o f B r i t i s h Guiana. This gave ALCOA c o n t r o l o f about 95 p e r c e n t 100 of the then known reserves of "bauxite deposits. In 1916 ALCOA established i t s subsidiary i n Guyana, the Demerara Bauxite Company (DEMBA). "... for the purpose of acquiring t i t l e to several'parcels of bauxite-bearing, freehold land along the Demerara River between Christianburg and Akyma. In the same year DEMBA v/as granted Crown and Colony mining leases covering add-i t i o n a l areas of bauxijg-bearing land i n the same d i s t r i c t . " ALCOA's undisputed claim to Guyanese bauxite v/as, however, short l i v e d . In 1919 another competitor, the U'ihlein family, challenged ALCOA's claim to the deposits of the Demerara River. The ALCOA-Uihlein a f f a i r reads l i k e a suspense novel, with a l l the intri g u e and backstabbing that goes with' i t . U i b l e i n started i t s attack on ALCOA by h i r i n g away a number of ALCOArSs experts, including the "former, l o c a l Manager and Managing Director of DEMBA". In 1919 they succeded i n pur-chasing two separate sections of ore laden land amongst ALCOA's holdings i n the Christianburg-Wismar d i s t r i c t . ALCOA, of course, v/as incensed by t h i s i n t r u s i o n into what i t considered to be i t s private domain and so brought a s u i t against U i h l e i n , a l l e g i n g that one of i t s agents had already obtained an option for the property purchased by u'ihlein. The l o c a l court, however, v/as unimpressed by ALCOA's claim and dismissed the case on grounds that: 101 ALCOA's r e p r e s e n t a t i v e had once been a t t o r n e y f o r Mrs. Hubbard, t h e same p e r s o n t o whom t h e l a n d had o r i g i n a l l y b e l o n g e d , and f j g m whom t h e o p t i o n had been a c q u i r e d " . F o r t h e n e x t f o u r y e a r s ALCOA c o n t i n u e d t h e l e g a l b a t t l e s , f i r s t t a k i n g i t t o t h e w e s t I n d i a n Court o f A p p e a l s , where i t was thrown out and t h e n t o t h e P r i v y C o u n c i l where i t was a g a i n d e c i d e d i n f a v o u r o f U i h l e i n . ALCOA's main argument seemed t o be t h a t i t wanted t h e U i h l e i n p r o p e r t y , a c c o r d i n g t o i t s P r e s i d e n t , A.V. D a v i s ; !... f o r s a n i t a t i o n purposes i n t h e a r e a i n w h i c h we were o p e r a t i n g ... t h e c l i m a t e and temp e r a t u r e ( a r e ) t r o p i c a l ... I remember the f i r s t day I went to the mines the thermometer was 125 degrees i n t h e mine ... I t i s v e r y low and marshy ... ^on can sum i t a l l up by s a y i n g i t i s a v e r y u n h e a l t h y c o u n t r y . ... D i s e a s e o f e v e r y n a t u r e I f t h a t was the c a s e , ALCOA may not have had much o f a l e g a l c l a i m on t h e l a n d i n q u e s t i o n , but i t c e r t a i n l y had a s t r o n g m o r a l case - one t h a t m ight hay,e c a r r i e d i t a l o n g way i n i t s s u i t a g a i n s t U i h l e i n , e s p e c i a l l y i n a l o c a l c o u r t . B u t , t h e c o u r t s knew b e t t e r and r e n d e r e d t h e i r d e c i s i o n s a c c o r d i n g l y . I n t h e p r o c e s s o f the c o u r t b a t t l e s a number o f i n t e r e s t i n g s i d e i s s u e s v/ere c r o p p i n g up. U i h l e i n i n s p i t e o f ALCOA's s u i t ' , was s t i l l t r y i n g t o o b t a i n c o n c e s s i o n s on o t h e r b a u x i t e - l a d e n l a n d i n B r i t i s h and Dutch Guiana's, The appe a r -p r e v a l e n t " . 102 ance of a t h i r d competitor, Sprostons Limited, a B r i t i s h Shipping and Timber Company, made matters somewhat uneasy. Much of ALCOA's fear stemmed from the fact that Sprostons had a number of outstanding applications f o r ore-laden land i n the v i c i n i t y of the Christianburh-V/ismar d i s t r i c t , v/hich i f obtained by U i h l e i n might either equalize t h e i r interests or even give U i h l e i n an edge over ALCOA. ALCOA, fearing the worst", that U i h l e i n might t r y to acquire an in t e r e s t or even buy over Sprostons, acquired 99 percent of Sproston's shares i n 1919. ALCOA, at the same time", through pressures on the l o c a l governments, made i t d i f f i c u l t f o r U i k l e i n to obtain concessions for i t s other claims on bauxite deposits i n B r i t i s h and Dutch Guianas. Twenty years l a t e r , i n the a n t i -trust s u i t brought against ALCOA, the extent of i t s holdings and pressure on l o c a l governments v/as made clear. According to Joseph U i h l e i n : "We found a maze of corporate interests controlled by the Aluminum Company (ALCOA) we found the Demerara Bauxite Company ... we found Canadian Companies, we found the in t e r l o c k i n g s i t u a t i o n , the mainspring of which seemed to be i n New York i n the o f f i c e of Arthur Y. Davis. That main-spring had i t s tentacles i n "England, i n Canada - i t v/as world-wide". The extent of ALCOA's power v/as made clear when U i h l e i n v/as further questioned. 103 Q u e s t i o n : (Mr. S m i t h , f o r ALCOA) Do you mean t o say t h a t t h e Aluminum Company had such c o n t r o l over the B r i t i s h Guiana Government t h a t i t v/as a b l e t o p r e v e n t and d i d p r e v e n t your company from a c q u i r i n g the C h r i s t i a n b u r g d e p o s i t s ? Answer: (Mr U i h l e i n , f o r t h e U.S. Govern-ment) I do d e c i d e d l y . ('Later) ... They had such a h o l d upon Dutch Guiana upon t h e p r o v i n c i a l a u t h o r i t i e s , t h a t i t was imposs-i b l e t o a c q u i r e b a u x i t e t h e r e ... such a s t r o n g h o l d , t h a t i f t h e U i h l e i n ' s r e c e i v e d deposits', i t might a c t u a l l y r e s u l t i n war d i f f i c u l t i e s f o r H o l l a n d . Q: What? A: That i s my s t a t e m e n t . Q: War? A: War d i f f i c u l t y i n H o l l a n d . Q: W-a-r - War? A: W-a-r The Dutch Government v/as a f r a i d o f t h e pov/er o f t h e s t r e n g t h , o f the b i g n e s s o f the Aluminum Company, t o g i v e d e p o s i t s to a l i k e l y c o m p e t i t o r . There v/as such a . f e a r of the Aluminum Company and such r e s p e c t t h a t I l e f t H o l l a n d v / i t h empty hands ... t h e gentlemen I t a l k e d t o i n - H o l l a n d f e a r e d t h a t t h e r e might be a r u p t u r e , a n ' a c t u a l r u p t u r e between two f r i e n d l y n a t i o n s , t h i s b e i n g one and H o l l a n d the o t h e r " . The C o l o n i a l Government of B r i t i s h Guiana by t h i s t i m e v/as r a t h e r i r r i t a t e d by t h e c o n t i n u i n g l e g a l b a t t l e s and embar-r a s s e d o v e r the f a c t t h a t b o t h companies v/ere A merican owned, and so i n 1920 c a l l e d a h a l t t o f u r t h e r b a u x i t e e x p l o r a t i o n i n t h e c o l o n y . But i t v/as a t r i f l e l a t e . ALCOA i n 1919 had a l r e a d y a c q u i r e d t h e major p o r t i o n o f t h e known d e p o s i t s . I n t h e same y e a r ALCOA d i v e s t e d t h e s t o c k s o f DEMBA and S p r o s t o n s 104 i t s wholly owned Canadian subsidiary, Aluminum Limited (formerly Northern Aluminum Company) to make i t appear an a l l Empire " a f f a i r " . DEMBA went to great lengths to show that i t s head o f f i c e was i n Georgetown, the majority of i t s directors were B r i t i s h subjects, including the Chairman Mr. Joseph A. King (a Guyanese) and that i)EMBA was indeed a B r i t i s h company, owned and operated by B r i t i s h subjects. In the meantime, Uihlein's energies and resources were spent t r y i n g to f i g h t off ALCOA. I t v/as not surpri s i n g , therefore, when ALCOA i n 1924 offered to purchase Uihlein's outstanding claims i n B r i t i s h and Butch Guianas that U i h l e i n r e a d i l y agreed and sold the Republic Carbon Company, the American parent of the subsidiaries i n B r i t i s h and Dutch Guianas, to ALCOA. ALCOA, was, thus, able to capture as early as 1924, the major portion of the known bauxite reserves i n B r i t i s h and Dutch Guianas. "It should be emphasized here that t h i s strategy v/as not the r e s u l t of personal idiosyncracies of the men who happened to be i n charge of ALCOA, or of some peculiar propensity to conspiracy on t h e i r part. Nor v/as t h i s kind of policy peculiar to A J J C O A amongst Aluminum Companies or to Aluminum Companies as a group. The strateg;/ of v e r t i c a l i n t e -gration and control of strategic natural resources v/as the ch a r a c t e r i s t i c strategy of metropolitan enterprise i n that phase of metropolitan economic development. Companies such as those i n the o i l , copper and food industries went through precisely the same phase as 105 ALCOA - indeed many of them had under-gone these changes before ALCOA did. The strategy followed was a perfectly natural, r a t i o n a l and l o g i c a l response to the needs of the f<j>gm f o r long term su r v i v a l and growth". By the end of 1925 Guyana's basxite became t o t a l l y integrated into the corporate holdings of Aluminum Limited and through i t to ALCOA's global corporate holdings. "Under normal conditions the Colony's ( B r i t i s h Guiana) output goes to the United States where- the nearest r e f i n i n g plant i s situated, the manu-facturing companies i n Great B r i t a i n preferring to draw t h e i r raw material from Prance and Balmatia owning to the lower cost of transport, but the bulk of the cargo imported into the United States i s re-exported to Canada i n the form of Alumina for manufacture into Aluminum and so finds i t s way 2]_ ultim a t e l y into the B r i t i s h market". Thus', no one v/as r e a l l y taken i n by ALCOA's ploy of divesting i t s shares of DEMBA to Aluminum Limited. In the meantime, DEMBA had already started production i n Guyana, beginning i n 1917 with 2,057 tons of raw ore. By 1925 production had already reached the phenomenal figure of 174,999 tons, most of i t going to ALCOA i n the United States (see Table 5 - where i t i s not s p e c i f i c a l l y indicated data on bauxite production relates to t h i s t a b l e ) . The impetus for increased production came from the r e l a t i v e cheapness of Guyanese ore for ALCOA's smelters i n the United States and Canada. In addition the TABLE 4 ALCAN ALUMINUM LIMITED P r i n c i p a l O p e r a t i n g S u b s i d i a r i e s and A f f i l i a t e s 31 December 1968 LATIN AMERICA NORTH AMERICA ARGENTIA Camea S.A.I.C. CANADA Aluminum Company o f Canada, L t d . A l c a n B u i l d i n g P r o d u c t s L i m i t e d A l c a n Design Homes L i m i t e d A l c a n P i p e L i m i t e d A l c a n U n i v e r s a l Homes Alma & J o n q u i e r e s Railway Co., The Almetco Aluminum Goods L i m i t e d C h i c o u t i m i S i l i c a n L t d . Newfoundland F l u o r s p a r L i m i t e d Roberval and Saguenay Railway Company, The Saguenay S h i p p i n g L i m i t e d Saguenay T e r m i n a l s L i m i t e d Saguenay Power Company, L t d . Saguenay T r a n s m i s s i o n Company, L i m i t e d S m e l t e r Power C o r p o r a t i o n Supreme Aluminum I n d u s t r i e s L i m i t e d UNITED STATES A l c a n Aluminum C o r p o r a t i o n A l c a n Cable A l c a n Metal Powders F a b r a l C o r p o r a t i o n BERMUDA Alcan (Bermuda) L i m i t e d CARIBBEAN GUYANA Demerara B a u x i t e Company, L i m i t e d S p r o s t o n s (Guyana) L i m i t e d JAMAICA A l c a n Jamaica L i m i t e d A l c a n P r o d u c t s o f Jamaica L i m i t e d S p r o s t o n s (Jamaica) L i m i t e d TRINIDAD Caguaramas T e r m i n a l s L t d . S p r o s t o n s ( T r i n i d a d ) L t d . BRAZIL A l c a n A l u m i n i o do B r a s i l S.A. A l u m i n i o Minas G e r a i s S.A. COLOMBIA A l u m i n i o A l c a n do Colombia, S.A. MEXICO A l c a n A l u m i n i o , S.A. URUGUAY A l c a n A l u m i n i o del Uruguay S.A. VENEZUELA A l c a n de V e n e z u e l a , S.A. EUROPE BELGIUM A l c a n Aluminum Raeren S.A. DENMARK ** A l u m i n o r d A/S **Dansk Aluminum I n d u s t r i A/S FRANCE Aluminum A l c a n de France A l c a n - S c h w a r t z , G i l age e t Oxydati S.A. des B a u x i t e s e t Alumines de Provence GERMANY A l c a n Aluminumwerke GumbH *Aluminum N o r f GmbH IRELAND *Uni d a r e L i m i t e d ITALY A l c a n A l u m i n i o I t a l i a n o S.p.A. * * A n g e l e t t i * C i u c a n i F o n d e r i a L a m i n a t o i o S.P.A. TABLE 4 (Cont'd) 1 0 7 NETHERLANDS **N.V. Ne d e r l a n d s c h e Aluminium M a a t s c h a p p i j NORWAY *A/S A r d a l og Sunndal Verk (ASV) ***A/S Norsk Aluminum Company ***A/S N o r d i s k A l u m i n u m i n d u s t r i *Det Norske N i t r i d a k t i e s e l s k a p SPAIN A l c a n A l u m i n i o I b e r i c a , S.A. SWEDEN **A/B Syvenska M e t a l l y e r k e n SWITZERLAND Aluminiumwerke A.-G. Rorschach UNITED KINGDOM A Alcan I n d u s t r i e s L i m i t e d * A l c a n E n f i e l d A l l o y s L i m i t e d A l c a n P o l y f o i l L i m i t e d A l c a n F o i l s L i m i t e d A l c a n Wire L i m i t e d *James Booth Aluminum L i m i t e d Saguenay S h i p p i n g (U.K.) L i m i t e d AFRICA GHANA Ghana Aluminium P r o d u c t s L i m i t e d GUINEA * * H a l c o ( M i n i n g ) I n c . NIGERIA A l c a n Aluminum o f N i g e r i a L i m i t e d F l a g Aluminum P r o d u c t s L i m i t e d ASIA INDIA I n d i a n Aluminum Company, L i m i t e d JAPAN *Nippon L i g h t Metal Company, L t d . *Toyo Aluminum K.A. MALAYSIA A l c a n Malayan Aluminum Co. L t d . S o u t h e a s t A s i a B a u x i t e s L i m i t e d Johore M i n i n g & S t e v e d o r i n g Co. L t d . SOUTH PACIFIC AUSTRALIA A l c a n A u s t r a l i a L i m i t e d **Queensland Alumina L i m i t e d *Wm. B r e i t & Company P t g . L t d . NEW ZEALAND A l c a n New Z e a l a n d L i m i t e d Aluminium Conductors L i m i t e d INTERNATIONAL SALES A l c a n A f r i c a L i m i t e d -- A f r i c a A l c a n A s i a L i m i t e d -- F a r E a s t A l c a n S.A. -- C o n t i n e n t a l Europe ( e x c l u d i n g Germany and S c a n d i n a v i a ) , M i d d l e E a s t , North A f r i c a A l c a n M e t a l ! GmbH -- Germany A l c a n (U.K.) L i m i t e d — U.D.. A l c a n S a l e s I n c . -- U.S.A., Car i b b e a n and L a t i n America Magnesium Company o f Canada, *Company owned 50% **Company owned l e s s than 50% ***Company owned 100% by AXV S c a n d i n a v i a L t d . SOUTH AFRICA A l c a n Aluminum L i m i t e d o f South A f r i c a SOURCE: " A l c a n Aluminum L t d . , 1968 Annual R e p o r t " , p. 29 b« 108 TABLE 5 EXPORT OF BAUXITE FROM GUYANA AT APPROXIMATE  VALUE WITH TOTAL TAX AND ROYALTIES PAID (value f.o.b. in W.I. $) YEAR EXPORT(IN TONS) VALUE $ TOTAL PER TON TOTAL TAX ROYALTY TAX & R( 1917 2,037 1918 NA 1919 NA 1920 NA 1921 12,384 4.6 57,957.4 1922 NA NA NA 1923 101,957 5.20 530,342 1924 154,324 5.60 775,819 1925 174,999 4.60 886,343 1926 184,136 4.60 920,683 1927 160,933 5.00 806,549 1928 165,422 5.00 835,621 1929 179,500 5.00 906,480 1930 119,616 5.00 598,080 8,971 8,320 17,291 1931 125,095 5.00 626,308 1932 NA NA 1933 NA NA 1934 61,372 306,930 1935 111,500 658,420 1936 164,096 1,019,654 1937 300,707 1,719,792 25,796.9 11,818.63 37,615 1938 376,368 2,020,275 1939 476,013 2,889,368 29,069.6 3,679.0 32,748 1940 624,487 1941 1,072,616 1942 ^1,116,463 1943 1 ,901 ,398 1944 873,969 5,411.90 1945 738,544 5i 109 1945 738,544 1946 1,120,015 1947 1,290,367 1948 1,873,166 1949 1,757,650 1950 1,853,417 1951 2,002,744 1952 2,285,966 1953 2,112,075 1954 2,125,535 1955 2,435,282 1956 2,471,190 1957 2,021,194 1958 1 ,264,386 1959 1,514,868 1960 2,471,190 1961 3, 1962 3,035,828 1963 2,342,259 1964 2,468,160 1965 2,872,588 1966 3,304,701 1967 3,327,758 1968 3,664,541 1969 4,238,346 1970 4,347,451 29,519.2 28,475 Source: B r i t i s h West Indies Yearbook, various issues from 1925-1973 110 maintainance of § low p r o f i l e by DEMBA and the absence of any v i s i b l e l i n k s with the rest of the Guyanese economy allowed f o r a continuous flow of high p r o f i t s . This has led a number of commentators to dub DEMBA as the c l a s s i c a l "enclave economy". P h i l i p Reno, f o r example, claims that: "Yet f o r a l l i t s dominant position i n B r i t i s h Guiana industry, DEMBA main-tains only minimal relations with Guianese a f f a i r s . Typical of extrac-. t i v e operations by i m p e r a i l i s t companies, DEMBA functions i n an economic enclave, Slosely t i e d to the int e r n a t i o n a l market but w i t b ^ l i t t l e r e l a t i o n to the i n t e r n a l market". Such an analy s i s , however, does not go far enough i n explain-ing the negative i n t e r n a l dynamic that the absence of any v i s i b l e l i n k produces. By i t s silence i t condemns i t s e l f to an i l l u s i o n , by assuming that linkages, or more precisely the absence of linkages", are the conditions of existence of the foreign f i r m . What i t f a i l s to see i s that the growth and consumption patterns of the l o c a l economy : are i n t e r a n l -ized and dictated by the needs and the demands of the foreign firm. The most immediate fact of the presence of DEMBA i n Guyana i s i t s overwhelming predominance i n the economy. Though i t does not have the a l l pervading effect of sugar, i t s potential as a d o l l a r earner and employer are. f a r greater. In I960, for example, the sale of 2,471,190 tons of bauxite brought i n a t o t a l of 129,495 thousand which represented 23.6 I l l percent of a l l domestic export earnings and 8.57 percent of 23 gross domestic product. In Jamaica where the c a p i t a l investment i s much hi g h e r , "The i n d u s t r y provided 47 percent of the value of merchandise exports i n 1965, 9 percent of the gross domestic product and 15 p e r c e n t of Government's general revenue". These f i g u r e s , however, represent only the mining a c t i v i t i e s of these companies and not t h e i r o v e r a l l c o n t r i b u t i o n to the economy. In Jamaica f o r example, the Aluminum Company of Canada a l s o engages i n c a t t l e and c i t r u s f r u i t farming. The company farms about 10~,000 acres i n f o r e s t r y and another 20',000 acres are leased out i n small p l o t s to about "4,000 25 Jamaican f a m i l i e s f o r a maximum of seven years". S i m i l a r l y , i n Guyana u n t i l 1971, the Aluminum Compaq/ of Canada (ALCAM) engaged i n s e v e r a l other a c t i v i t i e s , besides the mining of b a u x i t e . In a d d i t i o n , ALCAN's other major s u b s i d i a r y i n the area, Sprostons L i m i t e d , engages i n such d i v e r s e a c t i v i t i e s as engineering, s h i p b u i l d i n g ( b u i l d i n g the f i r s t a l l aluminum ve&sel i n 1966 - the S.S. Independence)', lumbering, export-import trade and a r e t a i l o u t l e t . The most v i s i b l e aspect of otitside mining a c t i v i t y are the investments i n the company town of Mackenzie ( s i t e of DEMBA). Here the company e i t h e r owns or c o n t r o l s most of the f i x e d c a p i t a l investment. "The Company p a r t i c i p a t e s d i r e c t l y or i n d i r e c t l y i n the c o n t r o l of the church and the s c h o o l , quite o f t e n 112 r u n n i n g b o t h and s u b s i d i z i n g t h e s a l a r i e s o f t e a c h e r s and m i n i s t e r s . A company-s t o r e i s a l s o p r o v i d e d w h i c h v e r y o f t e n i s a n a l l purpose s t o r e (department s t o r e ) and i n d e e d i s the. o n l y s t o r e i n the a r e a . Monopoly c o n t r o l over t h e d i s t r i b u t i o n o f goods thus g i v e s r i s e - t o more power f o r the company. F i n a l l y ' , the company runs and c o n t r o l s i t s own p o l i c e f o r c e v/hich i s u s e d t o keep out " u n d e s i r a b l e s " and " a g i t a t o r s " f r om o t h e r a r e a s and i n e v i t -a b l y t o e n f o r c e n o r m a t i v e r e g u l a t i o n s p r e s c r i b e d by t h e company". In a d d i t i o n , t h e company b u i l t and m a i n t a i n e d i t s own h o u s i n g p r o j e c t f o r w o r k e r s , f u r n i s h e d s o c i a l and r e c r e a t i o n a l f a c i l i t i e s and p r o v i d e d i t s own m e d i c a l c a r e t h r o u g h the company owned h o s p i t a l . As a r e s u l t o f government p r e s s u r e and t h e need t o economise on t r a n s p o r t c o s t s , DEMBA c o n s t r u c t e d an a l u m i n a p l a n t w h i c h s t a r t e d p r o d u c t i o n i n 1961. I n 1 9 6 7 a b r i d g e v/as b u i l t a c r o s s the-Demerara R i v e r t o f a c i l i t a t e m i n i n g on t h e west bank. The accumulated t o t a l o f a l l t h e s e i n v e s t m e n t s v/ould c e r t a i n l y amount t o much more t h a n the o f f i c i a l f i g u r e o f $100", 0 0 0 , 0 0 0 g i v e n by b o t h t h e company and Government as t o t a l f i x e d , a s s e t s . The im p o r t a n c e o f such c o n t r i b u t i o n s , v/hich i n t h i s case may n o t amount t o more t h a n 8 1 0 " , 0 0 0 " , 0 0 0 may n o t be r e a d i l y a p p a r e n t . On c l o s e r e x a m i n a t i o n , however, we f i n d t h a t such i n v e s t m e n t s a r e p a r t and p a r c e l o f c o r p o r a t e a c t i v i t y t o c o n t r o l i n much the same manner t h e human r e s o u r c e s as i t does t h e n a t u r a l r e s o u r c e s . To m i n i m i z e c o n f l i c t and a s s u r e labour, s t a b i l i z a t i o n t h r o u g h a h o s t o f s o c i a l a c t i v i t i e s , i s s t a n d a r d c o r p o r a t e p r a c t i c e . 13,3 TABLE 6 SALES BY MINING TO OTHER INDUSTRIES - 1959 (IN THOUSANDS OF GUYANA DOLLARS) AGRICULTURE LIVESTOCK MINING FOOD PROCESSING CHEMICALS ENGINEERING OTHER MANUFACTURING FUEL DISTRIBUTION 118.8 0.8 101.6 TRANSPORT AND COMMUNICATIONS BANKING PROFESSIONS BUILDING AND CONSTRUCTION RENT OF DWELLINGS GOVERNMENT HOUSEHOLD FOREIGN COUNTRIES (EXPORTS) GROSS CAPITAL FORMATION TOTAL 0.6 1 ,559.3 73.0 12,419.4 619.4 14,892,8 S o u r c e : Kundu, I n t e r - I n d u s t r y T a b l e 114 TABLE 7 PURCHASES BY MINING FROM OTHER INDUSTRIES - 1959 (IN THOUSANDS OF GUYANA DOLLARS) mGRirOUOiURE LIVESTOCK MINING 118,8 FEOOD PROCESSING 8.0 CHEMICALS 628.5 ENGINEERING * 2,151.6 OTHER MANUFACTURING 1,421.4 FUEL 244.5 [DISTRIBUTION 288.1 TRANSPORT AND COMMUNICATIONS BANKING PROFESSIONS BUILDING AND CONSTRUCTION RENT OF DWELLINGS GOVERNMENT HOUSEHOLD FOREIGN COUNTRIES (IMPORTS) TOTAL 385.8 7.3 505.9 2.1 2,174.1 6,839.1 117.6 14,892.8 * Foundry, r e p a i r and m a i n t a i n a n c e o f machinery and s h i p b u i l d i n g , e t c . ( P r o v i d e d by A l c a n ' s O t h e r s u b s i d i a r y i n Guyana - S p r o s t o n s L t d . S o u r c e : Same as T a b l e 6 115 There i s " , o f c o u r s e , t h e ooverse argument v/hich m a i n t a i n s t h a t though t h e s e s u b s i d i a r y i n v e s t m e n t s may he r e a l t h e i r t o t a l c o n t r i b u t i o n t o t h e economy remains n e g l i g -i b l e . I t i s p o i n t e d out t h a t i n t e g r a t i o n means " f o r w a r d and backward l i n k a g e s " v / i t h t h e r e s t o f the economy i n terms o f demands and o u t p u t s by t h e f o r e i g n f i r m t o the l o c a l market. As t a b l e s 6 and 7 show f o r t h e demands and c o n t r i b u t i o n s o f DEMBA t o t h e l o c a l economy t h i s on the s u r f a c e seems t o be the c a s e , but t h e r e i s more t o t h i s than r e a d i l y meets the eye. Because o f i t s s i z e , the f o r e i g n f i r m has t h e e f f e c t o f s t r u c t u r i n g t h e development p r o c e s s t o wh i c h o t h e r s e c t o r s must c o r r e s p o n d . As C l i v e Thomas n o t e d , t h e phenomena can b e s t be e x p l a i n e d by s e e i n g t h e absence o f any v i s i b l e l i n k s as p r e c i s e l y t h e mechanism t h a t s t r u c t u r e s t h e p r o c e s s o f dependent underdevelopment. "When d y n a m i c a l l y a p p l i e d and e x p r e s s e d i n terms o f o b j e c t i v e , m a t e r i a l phen-omenon, t h i s c o n s i s t s o f t h e f a c t t h a t t h e c o n j u n c t i o n o f - p r o d u c t i o n r e l a t i o n s and p r o d u c t i v e f o r c e s i s o f such a c h a r a c t e r t h a t the measure o f s t r u c t u r a l dependence, underdevelopment, and t h e economic backwardness o f t h e p r o c e s s o f p r o d u c t i o n v/hich i s i m p o r t a n t above a l l o t h e r s i s o n t h e one hand, t h e l a c k o f an o r g a n i c l i n k , r o o t e d i n an i n d i g e n o u s s c i enc e and '"technology",'""" beteeen^tli^™ 7  p a t t e r n and growth o f domestic demand", and, on the other7 the d i v e r g e n c e between do m e s t i c demand and t h e needs o f t h e b r o a d mass~~of^the -population ... t h e c r u c i a l elements i n t h e f u n c t i o n i n g o f an economic system qua economic system ( i . e . t h e l i n k a g e s between: l a b o u r -116 resources-technology-production§demand needs) a r e o f such a c h a r a c t e r and o r g a n i z e d i n such a way t h a t t h e s e communities have i n t e r n a l i z e d t h r o u g h t h e i r s o c i a l r e l a t i o n s o f p r o d u c t i o n and t h e use o f t h e i r p r o d u c t i v e f o r c e s , a p a t t e r n o f consumption t h a t does not r e p r e s e n t t h e needs o f the community and a p a t t e r n o f p r o d u c t i o n not o r i e n t e d t o e i t h e r domesti>e consumption o r dom e s t i c needs". Because o f t h e h i g h t e c h n o l o g i c a l b i a s ( low o r g a n i c c o m p o s i t i o n o f c a p i t a l d i s c u s s e d i n c h a p t e r 2 ) , the m i n i n g a s p e c t o f DEMBA's o p e r a t i o n s i s a v e r y m i n i m a l employer. I t i s e s t i m a t e d t h a t i n t h e 1950's and t h e 1960's between 75 and 80 p e r c e n t o f DEMBA's i n v e s t m e n t i n m i n i n g o p e r a t i o n s was made up o f f i x e d c a p i t a l , t h u s l e a v i n g o n l y 20-25 p e r c e n t f o r a l l o t h e r a c t i v i t i e s . T h i s r e s u l t e d i n a c a p i t a l - l a b o u r r a t i o o f about $22',000 wh i c h i s n e a r l y f o u r t i m e s the n a t i o n a l a v e r a g e . Thus, employment i n b a u x i t e m i n i n g amounted t o o n l y 3,700 s k i l l e d and u n s k i l l e d i n d i v i d u a l s o r about 3 p e r c e n t o f th e t o t a l employed l a b o u r f o r c e i n 1963. I n 1968 t h i s f i g u r e had r i s e n t o 4,500 r e p r e s e n t i n g a l i t t l e l e s s t h a n 4 p e r c e n t 28 o f the t o t a l employed. These f i g u r e s , however, do not t e l l t h e whole s t o r y , and m^y a c t u a l l y r e p r e s e n t an o v e r e s t i m a t i o n o f t h e r e a l c o n t r i b u t i o n o f DEMBA i n terms o f numbers employed and s a l a r i e s and wages p a i d . Because o f t h e need t o r a t i o n a l i z e and I n t e g r a t e p r o d u c t i o n and d i s t r i b u t i o n on a g l o b a l s a c l e i n a v e r t i c a l l y i n t e g r a t e d c o r p o r a t i o n such as A1CAN, t o p management p e r s o n n e l and t e c h n i c a l a d v i s o r s a r e s e n t f rom 117 ALCAN's head o f f i c e i n M o n t r e a l . Though t h e i r a c t u a l numbers may n o t be v e r y s i g n i f i c a n t , t h e i r wage r a t e s r e p r e s e n t a s u b s t a n t i a l p o r t i o n o f wages and s a l a r i e s p a i d t o DEMBA employees, s i n c e t h e y a r e p a i d by m e t r o p o l i t a n s t a n d a r d s and i n m e t r o p o l i t a n d o l l a r s . Thus, the r e a l c o n t r i b u t i o n o f the b a u x i t e i n d u s t r y i n terms o f the number o f Guyanese employed and i n p u t s o f s a l a r i e s and wages i s l e s s t h a n i t i s a c t u a l l y made out t o be. DEMBA 1s most immediate and v i s i b l e c o n t r i b u t i o n t o the economy o f Guyana, b e s i d e s i t s f o r e i g n e a r n i n g s c o n t r i b u t i o n , i s i n t a x e s and r o y a l t i e s . Because o f m i n i m a l i n p u t s i n th e s e a r e a s DEMBA has been under heavy f i r e r e c e n t l y and was one o f t h e main r e a s o n s f o r n a t i o n a l i z a t i o n . DEMBA's i n t e r n a l o r g a n i z a t i o n i s d i c t a t e d by t h e need t o produce as c h e a p l y and e f f i c i e n t l y as p o s s i b l e t h e raw b a u x i t e ore o f Guyana, f o r s h i p -ment t o U n i t e d S t a t e s and Canadian smelters.- As such i t has as i t s b a s i s the f o r m a t i o n o f arrangements v / i t h t h e l o c a l g o v e r n -ment t h a t a l l o w s f o r minimum i n p u t s and maximum b e n e f i t s . Because o f t h e absence o f d e t a i l e d i n f o r m a t i o n i t i s d i f f i c u l t t o d e t e r m i n e the e x a c t e x t e n t o f DEMBA's c o n t r i b u t i o n i n t a x e s and r o y a l t i e s t o t h e Guyanese economy, However, t h r o u g h the a v a i l a b i l i t y o f some s k e t c h y i n f o r m a t i o n a l o n g v / i t h o f f i c i a l p u b l i c a t i o n s we a r e a b l e t o p i e c e t o g e t h e r a f a i r l y a c c u r a t e , i f n o t e x a c t , p i c t u r e o f DEMBA's o p e r a t i o n s and c o n t r i b u t i o n s 118 to the Guyanese economy. The exact terms of agreement between DEMBA and the Crown Colony Government of B r i t i s h Guiana i s not known. S t a t i s t i c a l data released afterwards, however, show that the agreement, i f anything, was a simple give away of Guyanese bauxite. In 1930, for example, of 119,616 tons of bauxite produced at an average value of $5 (Guyana) per ton and amounting to a t o t a l value of $598",080 (Guyana), DEMBA's combined taxes and ro y a l t i e s were only 117,291 (Guyana). Taxes were paid on the basis of l a percent ad valorem, while r o y a l t i e s to the government v/as 10 cents per ton. Royalty, however, v/as not across the board, on a l l bauxite mined, but 29 only on ore mined on land leased from the government. A breakdown of taxes and r o y a l t i e s for that year v/as as follows: r o y a l t i e s $8,320 and taxes $8,930. In 1939 of 476,013 tons of bauxite produced, r o y a l t i e s amounted to a p i t i f u l $3,679 while taxes paid netted $29,069. I f ro y a l t i e s were charged across the board on a l l bauxite mined i t would have amounted to more than the combined t o t a l of taxes and r o y a l t i e s . TABLE 8 ; ACTUAL PAYMENTS POR 1939 Bauxite Total Value Taxes Royalties Total Taxes and Produced Royalties 476,013 $2'",'889,368 $29,069 $3,679 $32,748 tons Source: B r i t i s h West Indies Yearbook, 1940. 119 TABLE 9 HYPOTHETICAL PAYMENTS IP ROYALTIES WERE CHARGED ACROSS THE BOARD AT 10 CENTS PER TON - 1939 Bauxite Total Value Taxes Royalties Total Taxes and Produced Royalties 476,013 - $2,889,368 $29,069 $47,601 176,670 tons The actual payments amounted to $32,748 while the hypothetical payments amount to $76,670. Beside the ridiculous royalty of 10 cents per ton, the net loss of^royalty to government v/ould have netted an additional $43,922 i n revenues. Jagan commenting i n the l o c a l L e g i s l a t i v e Council i n 1948, i n addition to drawing attention to the unchanged structure of r o y a l t y payments', noted the incredible losses suffered by the national treasury. "Prom 1937 to 19.47 there v/as produced i n t h i s country 9,823,389 tons of bauxite. I f we had imposed a royalty at the rate . of ten cents per ton, which, i s charged 'on some of the bauxite mined here, we v/ou.ld have collected during that sajne period $982,339. But we collected only $234,639. In other words, during that period of about 11-years we have l o s t approximately $748,700. That i s because the Demerara Bauxite Company owns a large amount of land i n t h i s country". In contrast, the Berbice Company, a subsidiary of the American Cyanamid Company, operating some 90 miles up the Berbice River v/as paying r o y a l t y at 24 cents per ton. It i s obvious that DEMBA's influence v/as indeed overwhelming, not only 120 economically but p o l i t i c a l l y as w e l l . Some measure of the r e l a t i v e value- of 10 cents per ton of royalty charged on Guyanese bauxite, mined on crown lands, i s obtained when compared to the duty payable to the United States Government on crude bauxite entering the American market. "This (the royalty) compares favorably with the import tax l e v i e d i n the United States where the T a r i f f Act of 1922, crude bauxite i s dutiable at the rate of $1 per ton, and alumina hydrate or refined bauxite at h a l f a cent a pound". Jagan returned to the attack on r o y a l t i e s again i n 1950 and noted that i f the government's application of i t s ro y a l t y schedule v/as the same for DEMBA as i t v/as f o r the Berbice Company then the national treasury v/ould have gained consider-ably. Of the nearly li m i l l i o n tons of bauxite produced by DEMBA i n 1950 the company had paid only 168,500 i n royalty fees. I f the Berbice Company's schedule of royalty payment was applied t h i s would have netted approximately $363,000, which would have represented a gain of nearly $300",000. The Colonial Government subsequently yielded to Jagan's frequent attacks and i n 1951 established a new export tax: of 45 cents on crude ore and 11 for calained ore. But these changes did not represent changes i n the royalty structure of DEMBA, rather i t resulted from the increased price of Guyanese bauxite by some 50 percent as a r e s u l t of the "revaluation 121 upwards of Canadian and American currencies" i n 1950. J By 1964 the taxes and r o y a l t i e s paid by DEMBA to the government were: ( l ) r o y a l t y : 25 cents per ton or ba\ixite mined on crown lands, (2) export tax: 45 cents per ton on a l l bauxite exported; and (3) income tax: 45 percent on a l l p r o f i t s . J In the meantime, Reynolds Metals Company, an a f f i l i a t e of the U.S. giant which had entered, the aluminum industry i n the United States immediately a f t e r the Second World War, purchased the Berbice Company i n 1953. The suspen-sion of the Guyanese constitution that year and the removal of the PPP Government from o f f i c e gave Reynolds the much needed breathing s p e l l before coming to any long term.agreement. By the time the PPP had returned to o f f i c e i n 1957", Reynolds v/as already granted "pioneer status" by the interim Colonial Government. Subsequent attempts by the PPP to negotiate a formula f o r c o l l e c t i n g back taxes f a i l e d . In 1965 the PNC-UP Co a l i t i o n Government dropped the issue altogether. Reynolds argument was that i t v/as continuously operating on a d e f i c i t and, furthermore, i t v/as a pioneer industry and should be granted the pr i v i l e g e s of "pioneer status". The end resu l t was 34 that Reynolds did not pay any taxes between 1953 and 1964. In addition, i n 1957 DEMBA negotiated with the • interim government the building of an alumina plant for the processing of bauxite ore into alumina. The new plant was 122 g ranted "pioneer s t a t u s " g i v i n g i t "investment a l l o w a n c e s " and a f i v e year t a x - f r e e p e r i o d . This r e s u l t e d i n f u r t h e r d e t e r i o r a t i o n of r o y a l t i e s and taxes s i n c e not o n l y the raw bauxite' ore c o u l d not be taxed', hut a l s o the processed ~"55 alumina. N a t h a n i e l Davis, the head of ALCAN, commenting on the d i f f e r e n c e s i n taxes p a i d to the Jamaican and Guyanese Governments by ALCAN's s u b s i d i a r i e s i n both c o u n t r i e s s a i d , "The b a s i c reason why our taxes i n Guyana have been r e l a t i v e l y lower than our taxes i n Jamaica i n r e c e n t years is.we have been r u n n i n g through the p e r i o d of f i n a n -c i a l i n c e n t i v e s ( s i c ! ) granted by the Guyanese Government to a s s i s t develop-ment of many of our r e c e n t c a p i t a l pro-j e c t s i n c l u d i n g a tax: f r e e p e r i o d . -We have r e c e i v e d investment allowances, and a f i v e year tax f r e e p e r i o d f o r the Alumina p l a n t , and we have been running through a , r e s u l t i n g p e r i o d of low tax revenue". Farther e r o s i o n of tax and r o y a l t y revenues were a c c e l e r a t e d i n 1966 when the PNC-UF C o a l i t i o n Government made f u r t h e r 37 concessions to DEMBA and Reynolds. Norman Girvan c a l c u l a t e d t h a t the tax s t r u c t u r e of the b a u x i t e i n d u s t r y i n the Caribbean had not changed a p p r e c i a b l y s i n c e the aluminum 38 g i a n t s moved i n t o the a r e a . The establishment of p r o c e s s i n g p l a n t s v/ith t h e i r tax h o l i d a y s and duty f r e e i m p o r t a t i o n of b u i l d i n g m a t e r i a l and machinery r e s u l t e d i n f u r t h e r l o s s e s . Table 10 shows the tax s t r u c t u r e of the Caribbean b a u x i t e i n d u s t r y and the r e l a t i v e p o s i t i o n of Guyana i n 1967. To measure the f u l l extent of revenues l o s t to the 123 l o c a l economy, i t i s n e c e s s a r y t o a m p l i f y a l s o the p a r e n t -s u b s i d i a r y r e l a t i o n s h i p . Because o f the v e r t i c a l i n t e g r a t i o n o f DEMBA i n t o t h e i n t e r n a t i o n a l d i v e r s i f i c a t i o n p o l i c i e s o f ALCAN and ALCOA, the Guyanese economy has s u f f e r e d immeasur-a b l y . "The c o n t r o l r e l a t i o n s h i p between the sub-s i d i a r y and the p a r e n t a r e f a r s t r o n g e r and more s i g n i f i c a n t t h a n the r e g u l a t i o n and revenue r e l a t i o n s h i p s between the sub-s i d i a r y and t h e n a t i o n a l government. T h i s f o l l o w s n a t u r a l l y from the f a c t t h a t t h e s u b s i d i a r y i s an o r g a n i c p a r t o f an i n s t i t -u t i o n w i t h h i g h l y s t r u c t u r e d r e l a t i o n s h i p s between i t s component p a r t s , andqwith a c e n t r a l i z e d c o n t r o l a p p a r a t u s . " As a r e s u l t o f t h i s h i g h l y s t r u c t u r e d r e l a t i o n s h i p between p a r e n t and s u b s i d i a r y , t h e e n t i r e o u t p u t of C a r i b b e a n and Guyanese b a u x i t e i s " s o l d " i n a m o n o p o l i z e d market. T h i s a l l o w s f o r v a r i o u s forms o f p r i c e f i x i n g by the m e t r o p o l i t a n e n t e r p r i s e s i n o r d e r t o m i n i m i z e c o s t i n terms of t a x , r o y a l t y and o t h e r payments made t o l o c a l governments and i m p o r t d u t i e s p a i d t o the i m p o r t i n g c o u n t r y . T h i s r e s u l t s i n v a r i o u s degrees o f i n c a l c u l a b i l i t y o f t h e p r i c e o f b a u x i t e on t h e i n t e r n a t i o n a l market and t h e r e f o r e , o f revenues l o s t by l o c a l governments. However, some semblance o f r e l a t i v e v a l u e can be o b t a i n e d by u s i n g U n i t e d S t a t e s p r i c e s as an i n d e x -See T a b l e 11. As n o t e d e a r l i e r (see t a b l e 10) income t a x on the b a u x i t e i n d u s t r y i s d e t e r m i n e d by " s a l e s income" minus l o c a l Table 1 0 TRANSFER PRICES AND TAXES ON EXPORTS OF UNPROCESSED (DRIED) CARIBBEAN BAUXITE COUNTRY TRANSFER PRICE PROFIT INCOME TAX ROYALTY EXPORT DUTY TOTAL TAXES DURATION TOTAL REVENUE Jamaica 2^,625 (Fixed price negotiated in 1957 between Government and companies) . "-t^ . 10 average compart/ valuation for U.S. tax purposes. 1957-6^ 5^.018 company valuation •t 1 • 375 assumed 50 per cent varying wtth price of aiumi-n i urn pig. per cent AO ffcO.55 basic) maximum US per cent 1:0.2 1st Mi 11 ion: 1st £ 2nd Mi 11 ion: L0.15 3rd mi I I ion and over: LO.i 50 per cent varying wi th price of ingot 3:0. 70*i basic aver-age, subject to escalator clause in income tax roya1ty and regress ion Sur i nam (Brokopondo Agreement) "fc^ .171 for ore with 56 percent and 3 per cent siI lea. Adjusted according to composite price index of iron ond steel, aluminium pig and 6 major aluminium nil! products, and according to chamico! composi-tion b/ t ud) h i chcr or I ower cost of production, .•.'! th ab-solute minimum of^ T3-^ 75 Price minus cost 0^.696 obso-lute mini mum 3^.I9& general 10. 100 on ore mined beneath 5 metres accord i ng compos i te price index o ^.892 m!n imum Income tax plus gene ral roya1ty subject to price Index , qua!i ty of ore and depth Mined. Average T I .05 inclusive of a!1 taxes and fees. Varies according to company's Cost deducted valuations of quality of ore. from price. 1:1. 7^ 6 (I95M tot} . 27! In 1562 average 11.232 TO.576 per cent of estimated profit. in 19623:0.261 L0.C50 froi.i Crown Property none i f mi ned on pr i vate property T O . I ^0. Haiti 3^.232 ( 1357) to-1:5.089 Price ^ ninus jninimniu cost + 1.56 'tO per c«r of net p ro f i t minimum +0.625 1st 100,00 tons: TO.107, 2nd 100,00 tons TO. 07. Over 200,000 1.0.053 none over L0.679 Dominican \k. hb varyi ng with price of Republic aluminium ingot 1. Pr-i ce minus t in 1965 3 30 per cent of profits In 1965 i.0.S3 Tl \089 19651:!. 1 SOURCE: Girvan: THE CARIBBEAN SAUXITE INDUSTRY 25 years T8.5m. (1965/66) 75 years +l.78m. (1962) Royalty '+l.Q7m. 21 to years +1.73m. 25 years Approx. TO.25m. (196'.) 25 years :fc093m. (1965) 125 cost of production. The difference i s then taxable at the rate of 45 percent.^ - 0 "This method of determining p r o f i t s i s highly p r e j u d i c i a l to the producing countries, because the price that i s "paid" for the bauxite i s not set on the open market, but by the parent company. This price need not permit p r o f i t s by the subsidiary; the only matter of consequence to the industry owners i s that the t o t a l operation make money. The lower the bauxite price, the lower taxes to the primary producing country, and the higher the prof i t - o n the t o t a l operation. As a r e s u l t , bauxite prices have been kept down v/ith a r i g i d i t y singular even within the controlled price mechanism of American monopoly". It has been estimated that, as a r e s u l t of t h i s process, the value of Guyanese bauxite "imported" into the United States remained at the same l e v e l of $6.85 (U.S.) between 1939 and 1959, while the United States price f or l o c a l l y produced bauxite increased from $5.36 (U.S.) i n 1939 4-2 to $12.09 i n I960. It i s obvious that i f Guyana's baitxite v/as valued at the United States price DEMBA v/ould have been l i a b l e f o r more taxes and the bauxite entering the United States v/ould have had to pay increased duties, r e s u l t i n g i n an o v e r a l l loss to metropolitan enterprise. Tt does not seem, however, as i f t h i s scheme was universal corporate pol i c y , by the North American Aluminum giants. TABLE 11 PRICE OP GUYANA BAUXITE IN RELATION TO UNITED STATES AND OTHER CARIBBEAN PRODUCERS - I960 (value $US f.o.b.) UNITED STATES' 12.09 DOMINICAN REPUBLIC 12.59 JAMAICA 9.48 HAITI 8.90 SURINAM 7.72 BRITISH GUIANA 6.85 Source: Reno: Aluminum P r o f i t s and Caribbean People As table 11 shows Guyana was receiving f a r less for i t s bauxite than Jamaica, even though Guyana's bauxite was o higher Alumina content. By 1963 the nev; prices were as follows: TABLE 12 UNITED STATES $12.15 DOMINICAN REPUBLIC 12.89 JAMAICA 13.82 HAITI 9.59 SURINAM 10.28 GUYANA 8.98 Source: US Bureau of Mines Minerals Yearbook - 1964 The changed prices resulted from a number of factors that affected the aluminum industry i n the l a t e f i f t i e s and early s i x t i e s . The f i r s t of these was the United States regula-tions governing Western Hemisphere Trade Corporations. According to this statute, "Instead of a 52 percent corporate income tait, Western Hemisphere Trade Corporations pay the US only 25 percent. By r a i s i n g the price of bauxite, US companies could now reduce t h e i r t o t a l income taxes". Guyana, however, was exempt from t h i s tax; concession, since i t s bauxite was o f f i c i a l l y mined by a Canadian subsidiary. The other price changes, s p e c i f i c a l l y Surinam and Jamaica, resulted from re-negotiation between the G-overnments and the aluminum companies. I f Guyanese bauxite v/as valued at the same price as Surinam v/as receiving, which was of the same alumina content, the Guyana Government v/ould have received an ad d i t i o n a l two m i l l i o n d o l l a r s i n taxes. An examination of tables 13 and 14- indicates that Reynolds and DEMBA used tv/o d i f f e r e n t price structures f o r Guyana's bauxite between 1953 and 1961. On the one hand there v/as a higher price for bauxite entering the United States v/hile a lower figure v/as quoted i n Guyana. " I t i s commonly believed that the United States Government over the years 1948 to 1959 has i n most instances paid more for Surinam and Guyana ore purchased for stockpile than the price used by Reynolds Table 13 AVERAGE F. . O . B . P R I C E OF B A U X I T E IMPORTED INTO THE UN ITED S T A T E S ( p e r l o n g t o n ) C o u n t r y o f O r i g i n 1953 1954 1955 1956 1 9 5 7 1958 1959 I 9 6 0 1961 1962 G u y a n a US$ 1953 = 100 5 - 7 2 100 6 . 7 8 119 6 . 7 5 113 6.8.1 119 6 . 9 2 121 6 . 9 9 122 6 . 9 9 122 6 . 8 5 119 7-24 126 9 . 1 6 160 S u r i nam S u r i nam G u y a n a = US$ 1953 = 100 100 6 . 51 100 114 6 . 6 2 102 98 6 . 7 5 104 100 6 . 7 7 104 99 7 . 8 4 120 113 7 . 8 5 121 112 8 . 0 4 124 115 7.72 119 113 9 . 3 2 143 129 9 . 8 6 151 ,108 J a m a i c a J a m a i c a G u y a n a = US$ 1953 = 100 100 7 . 4 4 100 130 7.34 99 108 7 - 3 0 98 108 9 - 1 2 123 134 9 . 2 8 125 134 9 . 4 4 127 135 9 - 5 1 128 136 9 . 4 8 127 138 9 . 4 7 127 131 1 2 . 5 8 169 137 H a i t i H a i t i , G u y a n a = US$ 100 9 . 0 5 131 8 .71 125 8 . 7 2 125 8 . 9 0 130 9 . 41 130 9 . 3 9 103 D o m i n i c a n R e p u b l i c US$ 1 2 . 7 3 182 1 2 . 5 9 184 13 -21 182 1 2 . 3 8 135 SOURCE : UN ITED STATES BUREAU OF M I N E S , M INERAL YEAR BOOKS ( 4 4 ) OO Table 14 F.O.B. EXPORT PRICES OF DRY BAUXITE IN GUYANA Destination 1953 1954 1955 1956 1957 1958 1959 I960 1961 BWI$ 8.17 8.39 8.32 10.31 11.66 11.59 12.24 9.93 10.86 Canada US$ 4.77 4.89 4.85 6.01 6.80 6.76 7-14 5-79 6.33 1953 =100 100 103 102 126 143 142 150 122 133 BWI$ 8.47 8.57 9-12 9.32 10.02 10.83 10.44 10.21 12.26 United States US$ 4.94 5-00 5-32 5-44 5.84 6.32 6.09 5.96 7.15 1953 = 100 100 101 108 MO 118 128 123 121 145 BWI$ 8.21 8.43 8.45 10.16 11.29 11.46 11.81 10.03 11.49 Total US$ 4.79 4.92 4.93 5-93 6.59 6.68 6.89 5.85 6.70 1953 = 100 100 103 103 124 138 140 144 122 1 AO SOURCE: GUYANA ANNUAL ACCOUNTS RELATING TO EXTERNAL TRADE (45) 130 and DEMBA f o r inter-company trans-actions ... When t he bauxite produc-ing companies are s e l l i n g bauxite to the United States government they are not usually threatened by competition and thus are more interested i n ob-taining the highest price possible than i n avoiding l o c a l taxation by lower prices". The bauxite companies, thus were able to obtain the maximum possible returns. On the one hand, a lower price was quoted for tax purposes while on the other, a higher price was being charged to the United States government. How much increased revenue the bauxite companies derived from such schemes i s d i f f i c u l t to ascertain. What i s certain, however, and comes a,cross c l e a r l y , i s the fact that the companies were out to maximize p r o f i t s and countries, whether host or home, were going to he manipulated i n the process. F i n a l l y , i t has been estimated that of the t o t a l of over 60 m i l l i o n tons of raw bauxite calcined ore and processed 'alumina exported from Guyana between 1917 and 1969 at an approximate value of one b i l l i o n dollars the government received only 21 m i l l i o n dollars i n the form of royalty and export duty. This represented a meagre 1.6 percent of the 4 7 t o t a l value of bauxite exports. But the drain i n royalty and export taxes repres-ented only the v i s i b l e aspects of losses suffered by the l o c a l economy. Perhaps the most important disposession 131 incurred, by the Guyanese economy i n p a r t i c u l a r , and the Caribbean economy i n general, i s i n : ( l ) value transferred as a r e s u l t of the export of raw and semi-processed ore; and ( 2 ) jobs l o s t through such transfers. Table 15 shows the input-output r a t i o s f o r a ton of aluminum from mining to semi-fabricating and the value added at various stages. The t o t a l cumulated value added by mining and drying of 4.074 long tons of bauxite amounted to $37.69. Labour's share i n the value added i s $7.59, while others contributed $30.10. A cursory i n v e s t i g a t i o n of the "others" category show that t h i s hides a number'of very important inputs, which obscures the r e a l magnitude of value added. As table 16 indicates, f or the regional d i s t r i b u t i o n of the various stages of benefication, the Caribbean's share of the value added was r e s t r i c t e d to mining and drying. Because of the high capital-slabour r a t i o and the technological content, a l l of v/hich i s imported and subject to various forms of concessions, investment allowances and free import duty, the value added i n table 16 i s a gross overestimation of Caribbean inputs. On the other hand the f a b r i c a t i o n of raw bauxite ore into' aluminum, a process which takes place i n North America, netted a cumulated value of 11,130,88. As we can see from these figures the contribution of bauxite to the Caribbean's gross domestic product i s indeed minimal. Tables 17 and 18 show the actual contribution of bauxite to the gross domestic product of the Caribbean. If we 132 Table 15 INPUT-OUTPUT TABLE FOR TON OF ALUMINIUM  MINING TO S E M I - F A B R I C A T I N G Q u a n t i t y V a l u e V a l u e C u m u l a t e d £J $wj fcj swi M i n i n g a n d d r y i n g P r o c e s s I n p u t s V a l u e a d d e d ( i ) L a b o u r ( i i ) O t h e r T o t a l v a l u e a d d e d G r o s s v a l u e : B a u x i t e P r o c e s s I n p u t s : B a u x i t e O t h e r T o t a l I n p u t s V a l u e a d d e d : ( i ) L a b o u r ( i i ) O t h e r To 1 v a l u e a d d e d G r o s s v a l u e : A l u m i n a P r o c e s s I n p u t s : A l u m i n a E1 e c t r i c i t y O t h e r T o t a l I n p u t s V a l u e a d d e d : ( i ) L a b o u r ( i i ) O t h e r T o t a l v a l u e a d d e d G r o s s v a l u e ; : A l u m i n i u m P r o c e s s I n p u t s : A l u m i n i u m a n d A l l o y s F u e l O t h e r T o t a l I n p u t s V a l u e a d d e d : ( i ) L a b o u r ( i i ) O t h e r T o t a l v a l u e a d d e d G r o s s v a l u e 2.85 1.58 6.27 7.85 4.074 "long tens 10.70 B e n e f i c i a t i o n 4.074 l o n g t o n s 10.70 J1.63 22.33 4.28 17-38 21.67 1.3 s h o r t t o n s ^4.00 13.65 7.59 1.53 7.59 30.50 6.27 30.10 37-69 7-85 37.69 51.36 51.36 55.82 107-18 20. 54 . 5. 86 28 .13 83.47 23. .66 113. .57 104.01 29, .52 141. .70 211.20 S m e ! t i ng 1.9 s h o r t r t o n s ,44.00 211.20 12488 k w h r " 14.73 75.50 30.52 146.50 90.25 .. 433.20 0.008 man y r s . 21.16 101.57 27. .02 129. .70 43.37 • 282.17 72 .03 345. ,74 69-53 333.74 99 .05 475. .4 i s h o r t t o n 159-78 766.94 S e m i - f a b r i c a t i ng 1 s h o r t t o n 163-78 786.14 9-07 43.54 73-28 351-74 246.14 1,181.47 0.034 man y r s . 80.85 388.08 107-87 517-78 55.71 267-41 127.74 613-15 136.66 655-68 235-60 1,130.88 382.71 1,837.01 SOURCES: . C a l c u l a t e d From d a t a i n U . S . B u r e a u o f The C e n s u s : C e n s u s o f t h e M a n u f a c t u r e s 19&3 a n d C e n s u s o f M i n e r a l i n d u s t r i e s , 1963 a n d From D a t a on C a r i b b e a n P r o d u c e r s (48) Table 16 VERTICAL INTEGRATION OF FOUR INTERNATIONAL COMPANIES OF CARIBBEAN B A U X I T E , 1964 133 P r o c e s s and c o u n t r y MI n i n g C a r i b b e a n : -J a m a i c a S u r i nam Guyana D o m i n i c a n R e p u b l i c H a i t i T o t a l C a r i b b e a n U n i t e d S t a t e s T o t a l m i n i n g B e n e f i c i a t i o n A l c o a R e y n o l d s K a i s e r 200 2 , 4 7 0 6 4 0 3,310 4 0 0 3 , 7 1 0 D r i e d b a u x i t e (ooo l o n g t o n s ) 1 , 6 0 0 2 0 0 396 2 , 1 9 6 600 2 , 8 0 0 4,200 4,200 4,200 A l c a n 1 , 8 0 0 2 , 3 0 0 4 , 1 0 0 4 , 1 0 0 A l u m l n i a (ooo s h o r t t o n s ) C a r i b b e a n -J a m a i c a Guyana U n i t e d S t a t e s : - 2 , 1 5 5 C a n a d a : -T o t a l b e n e f i c i a t i o n 2 , 1 5 5 Smel t i ng U n i t e d S t a t e s 878 C a n a d a T o t a l s m e l t i n g 878 F a b r i c a t i ng U n i t e d S t a t e s 2 6 C a n a d a T o t a l 26 F i n a n c i a l D a t a A s s e t s 582 Net S a l e s 370 Income a f t e r t a x 22 Income % own c a p i t a l 1 6 . 3 O t h e r I n t e r n a t i o n a l O p e r a t i o n s : M i n i n g E u r o p e A f r o - A s i a A u s t r a l i a a n d L a t i n A m e r i c a 2 0 0 - 3 0 0 B e n e f i c i a t i o n : -E u r o p e A f r o - A s i a A u s t r a l i a a n d L a t i n A m e r i c a 230 S m e l t i ng E u r o p e N/A A f r o - A s i a -A u s t r a l i a a n d L a t i n A m e r i c a 30 F a b r i c a t t ng E u r o p e 1 A f r o - A s i a 2 A u s t r a l i a and L a t i n A m e r i c a 1 S O U R C E : - U n i t e d S t a t e s B u r e a u o f M i n e s . 1 , 6 7 9 1 , 2 3 0 1 , 6 7 9 1 , 2 3 0 P r i m a r y a l u m i n i u m ( 0 0 0 s h o r t t o n s ) 691 599 932 370 1 , 2 7 0 2 , 5 7 2 691 599 Number o f f a b r i c a t i n g p i a n t s 22 22 -t M i l l i o n s 367 221 13 1 5 . 6 22 22 327 184 10 1 9 - 6 740 740 12 3 15 364 158 15 20.1 D r i e d b a u x i t e ( 0 0 0 l o n g t o n s c a p a c i t y ) 500 600 N/A 60 A l u m i n a ( 0 0 0 s h o r t t o n s c a p a c i t y ) 118 27 44 358 56 632 A l u m i n i u m ( 0 0 0 s h o r t t o n s c a p a c i t y ) 97 115 192 20 16 Number o f C o u n t r i e s 5 4 11 3 4 6 I 1 8 M i n e r a l s Y e a r b o o k 196 Jt-1964 Annua 1 R e p o r t s o f AJ_coa, K a i s e r , A l u m i n i u m and C h e m i c a l C o r p o r a t i o n  R e y n o l d s ~ M e t a l s C o . , and A l u m i n i u m L t d . I . M . F . S t e e l and A l u m i n i um W o r k e r s ' ^ C o n f e r e n c e : A l u m i n i u m i n d u s t r y T h r o u g h o u t The W o r l d 134 Table 17 G.D.P. Created by; G.D.P. created in Car i bbean North America and Rest of World LOCATION OF G . D . P . CREATED BY PROCESSING OF  CARIBBEAN METAL-GRADE B A U X I T E , 1964  (ti MJLLIONS AND SWI MILLIONS) Mi n i ng -fcr! $M 32 15** Bene-f I c i a l i o n LM $M Smelting •fcM 12 57 43 206 55 263 Tota l 32 154 SOURCE: Girvan: The Caribbean Bauxite Industry SM Semi-f ab r i ca t ing -i-M $M. 204 979 40! 1,925 204 979 401 1,925 Tota l fcM $M 43 211 6 643 3,110 94 691 3,317 100 I nputs Demanded by:~ Total Table 18 LOCATION OF INPUT DEMAND GENERATED BY PROCESSING OF METAL-GRADE B A U X I T E , I3fa4 Mi n i ng -fcM $M Inputs demanded i n : Car:bbean North America and Rest of World Bene-f i c a t ion •tM $M Sme11 i ng -tM SM Semi -fabr i cat i ng tM $M 43 8 38 29 139 136 653 242 1,162 43 37 178 136 653 242 1,162 T o t a l $M 17 82 407 1,954 96 424 2,036 100 SOURCE: Same as Table 135 were t o go back a few y e a r s , however, p r i o r t o t h e e s t a b l i s h -ment o f the a l u m i n a and o t h e r p r o c e s s i n g p l a n t s , and t h e p r o d u c t i o n o f c a l c i n e d o r e t h e f i g u r e o f 6 p e r c e n t would he even l o w e r . I n a d d i t i o n , "Of t h i s s h are ( o f 6 p e r c e n t ) net p r o f i t s , d i v i d e n d s and some i n t e r e s t i s l o s t t o t h e n a t i o n a l income o f t h e C a r i b b e a n so t h a t t h e r e a l C a r i b b e a n s h a r e i s more C Q l i k e l y t o be i n t h e r e g i o n o f 4 p e r c e n t " . I t i s e s t i m a t e d t h a t as a r e s u l t o f t h i s t r a n s f e r o f v a l u e o f C a r i b b e a n b a u x i t e t o t h e N o r t h American economy, 51 t h e r e i s a t r a n s f e r o f more t h a n 42,000 jobs from t h e r e g i o n . T h i s f i g u r e , however, seems- t o be a g r o s s u n d e r - e s t i m a t i o n , s i n c e i t o n l y d e a l s w i t h d i r e c t jobs and n o t , i n a d d i t i o n , t o the n e c e s s a r y s e r v i c e i n d u s t r i e s f o r f u e l , m a chinery and o t h e r d i r e c t i n p u t s needed t o t r a n s f o r m t h e b a u x i t e i n t o aluminum; n o t t o m e n t i o n , a t t h e same t i m e , normal s e r v i c e i n d u s t r i e s and t h e g e n e r a l " m u l t i p l i e r e f f e c t s " t h a t r e s u l t s . Some r e l a t i v e v a l u e can be' o b t a i n e d by u s i n g U n i t e d S t a t e s s t a t i s t i c s as an i n d e x . " I n terms o f employment, i f we use t h e US l a b o u r c o e f f i c i e n t s , f o r s m e l t i n g and s e m i - f a b r i c a t i o n , t h e t o t a l g e n e r -a t e d o u t s i d e t h e a r e a ( C a r i b b e a n ; i n p r o c e s s i n g i t s b a u x i t e was around 123,000 i n 1964 with,-average e a r n i n g s o f 2,429 per annum". The u s u a l non-commital r e p l y , t h a t t h e s e c o u n t r i e s do not p o s s e s s t h e n e c e s s a r y energy p o t e n t i a l t o engage i n s m e l t i n g o r f u r t h e r p r o c e s s i n g , i s i n t h i s case a c l e a r r a t i o n a l i z a t i o n 136 of metropolitan Machrvjellian p o l i t i c s . A United Nations team i n 1962, a f t e r a study of the hydro-electric potential of Guyana, indicated that an aluminum smelter could be b u i l t and would be able to pay for i t s e l f eut of i t s own p r o f i t s , i n ten years. The year i s 1975; give f i v e years for construction delays of one kind or another, and miscalculations f o r payment, Guyana i n two years would have had i t s own aluminum smelter. IV: Guyana's Economy and the Nationalization of DEMBA In 1971 the contribution of the bauxite industry to the Guyanese economy had increased to about 50 percent of 53 54 exports from i t s 40 odd percent i n 1966. However, because of the high leakage r a t i o i n p r o f i t s and revenues accruing abroad, the industry was obviously not contributing i t s share', r e l a t i v e to i t s s i z e , of national growth. At the same time, because of i t s technological bias and higher wage rate i t tended to draw into i t s service the most technologically s k i l l e d segment of the work force, thus denying other sectors of the economy the services of p u b l i c l y educated i n d i v i d u a l s . In addition, other sectors of the economy were experiencing serious down turns. ^Indeed, the gross domestic product i s estimated to have declined by around two per cent i n r e a l terms, bearing i n mind that domestic prices increased by 4.6 percent".35 137 A g r i c u l t u r a l p r o d u c t i o n , i t seems, s u f f e r e d the 56 most, r e g i s t e r i n g a t o t a l d e c l i n e i n ou t p u t o f 4.3 p e r c e n t . Much o f t h i s drop i n a g r i c u l t u r a l p r o d u c t i o n can he a t t r i b u t e d d i r e c t l y t o government p o l i c y towards t h e r i c e i n d u s t r y . Upon immediate a s s u m p t i o n o f power i n 1964 t h e c o a l i t i o n PNC-UP government t e r m i n a t e d t h e Guyana-Cuba t r a d e agreement s i g n e d by t h e p r e v i o u s government o f • Dr. Jagan. A s u b s t a n t i a l p o r t i o n o f Guyanese e x p o r t t o Cuba under t h e agreement v/as r i c e , a t h i g h e r t h a n w o r l d p r i c e s . The consequent f a l l i n p r i c e s ' p l a c e d a s e v e r e burden on f a r m e r s s i n c e i t made i t d i f f i c u l t t o meet payments on ma c h i n e r y purchased f o r and because o f i n c r e a s i n g c u l t i v a t i o n ; b o th o f v/hich were u n d e r t a k e n on the b a s i s o f t h e r e t e n t i o n and even e x p a n s i o n o f the Cuban market. The government i n an att e m p t t o l o c a t e a l t e r n a t i v e m a r k e t s , r e t a i n e d t h e s e r v i c e s o f , "A Us t r a d i n g company, t h e C o n e l l R i c e and Sugar Company ... (v/ith) t h e e x c l u s i v e r i g h t t o market r i c e a broad f o r v/hich i t w i l l he p a i d a f r e e o f #300,000 and a commissioHoOf one cen t p e r pound o f r i c e s o l d " . ' These payments, o f c o u r s e , had t o be met by fa r m e r s them-s e l v e s , t h r o u g h t h e R i c e M a r k e t i n g Board, v/hich t h e y n e i t h e r c o n t r o l l e d n o r were a d e q u a t e l y r e p r e s e n t e d . I n a d d i t i o n , s e v e r e impediments were p l a c e d on the r i c e i n d u s t r y by the d e n i a l o f such e l e m e n t a r y guarantees as d r a i n a g e and i r r i g a -t i o n , minimum p r i c e s , p e s t c o n t r o l , c r e d i t f a c i l i t i e s , e t c . 138 i s a r e s u l t o f t h i s and o t h e r government p o l i c i e s a g e n e r a l m a l a i s e d e v e l o p e d i n t h e a g r i c u l t u r e i n d u s t r y ( n o t s u g a r ) v / i t h t h e end r e s u l t t h a t the Guyana was f o r c e d i n t o t h e i n c r e a s i n g i m p o r t a t i o n o f f o o d , Food i m p o r t s i n 1961 f o r example, amounted t o 125.8 m i l l i o n by 1970 t h i s had i n c r e a s e d t o 137.3 m i l l i o n . I f we were t o add t o t h e 1970 i m p o r t s t h e c o s t o f a n i m a l and v e g e t a b l e o i l s and f a t s the t o t a l v/ould be more t h a n $60 m i l l i o n . 5 8 The CAR I F T A ( C a r i b b e a n Free Trade A r e a ) agreement, a t the same t i m e , d i d not produce t h e d e s i r e d e f f e c t s i n Guyana. "Jamaica and T r i n i d a d have b e n e f i t e d from CARIFTA p r o v i s i o n s , because t h e y have more m a n u f a c t u r i n g a c t i v i t i e s , and have been a b l e t o t a k e advantage o f t h e drop i n m a n u f a c t u r e d goods imports-rfrom o u t -s i d e t h e C a r i b b e a n . However, these man-u f a c t u r e r s now c o s t Guyana more t o i m p o r t t h a n b e f o r e , because c o s t s a r e h i g h e r i n Jamaica and T r i n i d a d t h a n i n developed m a n u f a c t u r i n g c o u n t r i e s whole e x p o r t s have now been r e p l a c e d . I n M ay 1 9 7 3 Mr. Ramkarran o f t h e o p p o s i t i o n P e o p l e ' s P r o g r e s s i v e P a r t y produced a b a g f u l o f h i g h p r i c e d i t e m s now i m p o r t e d i n t o Guyana from CARIFTA c o u n t r i e s , w h i c h he c l a i m e d were a c t u a l l y m a n u f a c t u r e d i n the U n i t e d S t a t e s or B r i t a i n , and t h e r e -f o r e • b e n e f i t t i n g from f r e e t r a d e p r o v i s -i o n s , but were tinnedr-@r packaged i n Jamaica or T r i n i d a d " . Because : :Guyana r e c e i v e s no l e s s t h a n 30 p e r c e n t o f i t s revenues from i m p o r t d u t y , the CARIFTA agreement has the e f f e c t , t h e r e b y o f p r o d u c i n g a f u r t h e r d r a i n on government r e v e n u e s . 139 "With free trade, the estimated duty-foregone v/as $0.8 m i l l i o n i n 1968 hut v/ould reach $6 m i l l i o n i n 1973. Between 1968-1973, i t i s estimated that the government w i l l have to recover almost $25 m i l l i o n . This figure i s about $5 m i l l i o n less i f a growth element based on marginal propensity to import v/ith a 5 per-cent annual increase i n the n a t i o n a l ^ income i s taken into consideration". In order to offset these imbalances the government devalued the Guyanese d o l l a r by eight percent i n 1971, following the American devaluation of the same year. In 1972 the govern-ment v/as forced into another defacto devaluation a f t e r the 61 " f l o a t i n g of the pound s t e r l i n g " . But t h i s , i n i t s e l f , v/as not enough to r e s u l t i n a resurgence of the economy. As a matter of f a c t , i t worsened the si t u a t i o n and increased the dependence of West Indian economies on the metropolitan centers. It i s the crowning example of the extent to which the Caribbean economies are integrated into the economies of the advanced c a p i t a l i s t countries. Further, "I t i s an incorrect procedure to have exchange rate determined i n t h i s way (devaluation) and then to adjust our objectives i n such a way as to make i t consistent v/ith 'this l i m i t a t i o n . The correct procedure i s to f i x one's objectives and then to determine by v/hat combination of i n t e r n a l and external p o l i c i e s mighjfepbest be pro-moted simultaneously." At home, the government was caught i n an increasingly embarrassing s i t u a t i o n . I t seems that large amounts of H O c a p i t a l expenditures were being "made? without any proper accounting. "In 1967, the Minister of Finance disclosed i n the National Assembly that $1.5 m i l l i o n was i l l e g a l l y spent on the East Coast highway and not properly accounted f o r . The Director of Audit i n his report for 1967 disclosed that no vouchers were available for $19.5 m i l l i o n of government expenditure. The report claimed that during 1966, the year of independence'some $4 m i l l i o n was spent, for whichgno vouchers had been submitted". To cover such expenditures and provide the necessary c a p i t a l f o r development projects outside c a p i t a l had to be sought. I t i s estimated that development plans depend f o r 75 percent 6 4 of i t s c a p i t a l from foreign sources. The s i t u a t i o n i s further heightened by- the. fact that the f i n a n c i a l i n s t i t u t i o n s of the country are foreign owned. As the Minister of Finance noted i n 1969, "It i s an incongruous s i t u a t i o n when the savings of a foreign country are i n practice - used to finance foreign development, because so much of the funds of our f i n a n c i a l i n s t i t u t i o n s gj-are controlled by foreign i n t e r e s t s " . The natural r e s u l t v/as that the public debt increased by leaps and bounds. It i s estimated that between 1968 and 1972 the amount increased two and a h a l f times from a sum of $199 m i l l i o n i n 1968 to $509 m i l l i o n i n 1972. This necessarily means that increasing amounts of government revenue must be 141 set aside to service these loans. Government expenditure for debt servicing and repayment of matured loans i n 1971", f o r example", amounted to $20.1 m i l l i o n v/hich v/as "approximately 66 11 percent of planned expenditure". It i s estimated that by 1974 these figures had increased to $813 m i l l i o n i n public debt requiring nearly 23 percent of a l l planned expenditure".^ Since there are no means within the present structure of the economy capable of generating s u f f i c i e n t c a p i t a l to offset such d e f i c i t s the borrowing cycle starts a l l over again at an 68 accelerated pace, ad infinitum. That the economy was i n a t o t a l state of disrepair and may go "belly-up" at any time was obvious. That action v/as needed and immediately v/as imperative. That such action should also serve to deflect and d i s p e l l mounting c r i t i c i s m of govern-ments f i s c a l and monetary p o l i c i e s v/as a necessity. '• In other words action had to be substantive i f i t v/as going to, or at l e a s t seem to, succeed. The stage for such action v/as already set as early as A p r i l 1970", v/hen the Prime Minister announced the government's intention to participate i n any future attempts to exploit the country's natural resources. I t does not seem", however, from a reading of the announcement that i t was part of a general strategy developed by the government to reorganize the economy. At the 13th annual Congress of the PNC, on the 5th of A p r i l 1970, Burnham stated: 142 "The hinterland as we know i t contains the greatest part of the natural resources especially forests and min-e r a l s . In the e x p l o i t a t i o n of these', especially the l a t t e r , we are prepared to work i n consortia with foreign investors, hut only on ce r t a i n cond-i t i o n s ; and one such condition hence-f o r t h w i l l he that government alone or government and Go-operatives hold i n each case noteless than 51 percent of the equity". This mild remark at such a r e l a t i v e l y obscure moment went unheeded u n t i l November 1970, when the government announced i t s i n t e n t i o n of acquiring an interest i n DEMBA. ALCAN, of course, greeted the announcement with shock. In other quarters i t v/as received, v/ith a welcome sigh or r e l i e f , because of the a i r of expectancy, that something c r u c i a l was at)out to give, that existed i n the country. The immediate concern v/as that DEMBA should be made to contribute more than i t was accustomed to. The government was p a r t i c u l a r l y frustrated i n i t s attempts to regulate and police the a c t i v i t i e s of DEMBA. In addition, i t was rather peeved at the fact that while i t made numerous concessions to DEMBA a f t e r 1966', ALCAN did not see f i t to increase i t s pro-cessing and semi-fabricating a c t i v i t i e s i n Guyana. By acquiring an interest i n DEMBA, the government hoped that i t might be able to pressure ALCAN into further processing and perhaps even the manufacture of aluminum i n Guyana. This v/ould also allow f o r closer monitoring of the f i n a n c i a l 143 transactions of parent and subsidiary. On the 28th of November 1970 the Prime Minister wrote to Nathaniel Davis, .President of ALCAN, informing him of the Government's decision to acquire an in t e r e s t i n DEMBA. The Government's proposal v/as: 1. Government's p a r t i c i p a t i o n s h a l l he a majority one. 2. The p a r t i c i p a t i o n v/ould he by purchase of a share of the assets of the company. 3. The value of such assets s h a l l be no greater than that given by the company as the written down hook value f or income tax purposes on the 31st of December 1969, v/ith additions to value during 1970 not by revaluations or reappraisals. 4. The Government w i l l pay for i t s share of the assets out of future p r o f i t s of the jo i n t undertaking a f t e r tax. 5. The Government's majority holding s h a l l confer on Government the con-t r o l which inheres i n such majority holding. 6. The agreement f i n a l l y arrived at between the Company and Government s h a l l be deemed to rtake effect from 1st January, 1971." These were what the government defined as i t s non-negotiable terms, a l l others including the majority holdings were negotiable. ALCAN, as was to he expected, r e p l i e d i n character-i s t i c s t y l e , of what i t considered a clear breach of f a i t h on 144 the part of the Guyanese Government. The company knowing the extent to v/hich the government depended on bauxite revenues, assumed an uncompromising position from the out-set, hoping by t h i s action to force the Government into r e t r e a t , since any further demands would play into the hands of the opposition PPP. ALCAN's counter proposal was: 1. The company would be c a p i t a l i z e d at $100 m i l l i o n , 51 percent to Guyana and 49 percent to ALCAN. 2. The entire.amount of DEMBA's assets would he contributed as a loan. 3. The Company and i t s shareholders would not he subject to any Guyana tax of any kind - i . e . income corp-oration, property, withholding, import or export duty, royalty or any impost, or any exchange control r e s t r i c t i o n with respect to interest dividends or fees f o r i t s share holders. 4. The Company's p r o f i t s , a f t e r meeting a small amount of f i x e d c a p i t a l additions and repayment and interest charges on i t s debts v/ould he a l l o c -ated 70 percent to-. Government and 30 percent to ALCAN.IX The acceptance of t h i s proposal would mean that ALCAN v/ould he able to recover i t s entire investments i n DEMBA, "at a commercial rate of in t e r e s t " . The effect would be that ALCAN "during and a f t e r the recovery" of i t s investment v/ould maintain 49 percent of a much larger enterprise to v/hich i t had only contributed a loan of $100 m i l l i o n . In addition the 3 0 percent p r o f i t before taxes represented as much as 145 50 percent of p r o f i t s a f t e r taxes. ALCAN ' S appointment of the Chief Exedutive o f f i c e r would give i t management control 72 of the enterprise and would f i t i n very n i c e l y into i t s world wide corporate strategy, ^his was not only an i n s u l t to Guyanese, hut to any one with an i o t a of i n t e l l i g e n c e . As one government negotiator commented: "As f a r as the DEMBA/ALCAN negotiators were concerned, they were dealing , v/ith natives f o r v/hom they had a "fund-amental contemptj some of them made no attempt to hide t h i s while others made heroic e f f o r t s v/hich only wore t h i n undes^stress, fatigue and pro-vac t i o n . " The Government thus, found i t s e l f i n the very pre-carious p o s i t i o n of either hacking down or c a l l i n g ALCAN's b l u f f and n a t i o n a l i z i n g DEMBA. Both alternatives i t seemed v/ould r e s u l t i n loss of p o l i t i c a l face. Backing down v/ould confirm Jagan's claim that the government v/as merely a t o o l of vested i n t e r e s t ; and n a t i o n a l i z a t i o n v/ould play into the hands of the PPP and the Ratoon group of the University of Guyana, v/ho were advocating a "tek a l l " (take a l l ) po l i c y . A closer examination of the s i t u a t i o n , however, reveals that Burnham v/as i n the best position possible. On the one hand he had i n t e r n a t i o n a l sympathy on his side. As the leader of a poor underdeveloped country, attempting to w e s t control of the country's most profi t a b l e resource from a giant multinational, i t v/as a clear case of a David confronting a Goliath. Jagan's 146 " t e k a l l " p o l i c y p l a c e d Burnham i n t h e most l i b e r a l o f t r a d i t i o n s , he had not o n l y g i v e n ALCAN ample o p p o r t u n i t y t o b a r g a i n i t s , c l a i m , b u t a s s u r e d i n t e r n a t i o n a l p u b l i c o p i n i o n o f h i s good i n t e n t i o n s by g u a r a n t e e i n g an o r d e r l y t r a n s f e r o f whatever a s s e t s t h e government v/as t o a c q u i r e f r om DEMBA and a s s u r i n g f a i r and adequate compensation. On t h e o t h e r hand, o p p o s i t i o n s u p p o r t was a f o r e g o n e c o n c l u s i o n . Jagan's l i f e l o n g advocacy o f n a t i o n a l i z a t i o n p l a c e d him i n <, t h e uncompromising p o s i t i o n o f e i t h e r s u p p o r t i n g t h e govern-ment or going dov/hin h i s t o r y as t h e man t o have b l o c k e d n a t i o n a l i z a t i o n . The government, o f c o u r s e , c a l l e d ALCAN's b l u f f and announced i t s i n t e n t i o n t o n a t i o n a l i z e DEMBA a f t e r ALCAN r e f u s e d t o m o d i f y i t s p r o p o s a l s f o r "m e a n i n g f u l p a r t i c i p a t i o n " b y the government. As was t o become c l e a r l a t e r , however, n a t i o n a l i z a t i o n was ne v e r p a r t o f a g e n e r a l s t r a t e g y t o r e o r g a n i z e the economy. Indeed, n a t i o n a l i z a t i o n was o n l y embarked upon as a r e s u l t o f ALCAN's r e c a l c i t r a n c e , and a 7 4 r e f u s a l t o a c c e p t p a r t i c i p a t i o n on the government's terms. The v e r y terms o f t h e f i n a l agreement i n d i c a t e s t h a t t h e Government d i d n o t seem t o be i n a b s o l u t e c o n t r o l , as i t c l a i m e d on s e v e r a l o c c a s i o n s . The j o i n t p r e s s r e l e a s e a t the c o n c l u s i o n o f t h e agreement r©ads: 147 "The Government of the Co-operative Republic of Guyana and ALCAN Aluminum Limited of Canada have reached a negotiated settlement i n t h e i r d i s -cussion concerning the quantum of compensation to he paid as a re s u l t of the government's decision to nationalize the operations of the Derrierara Bauxite.. Company (DEMBA), an ALCAN subsidiary. Under the terms of the agreement the Government w i l l pay to ALCAN a sum of approximately US: $53.5 m i l l i o n over a period of no less than 20 years, with i n t e r est.•§ at s i x percent per -5 annum subject to withholding tax". In the f i r s t place the $53.5 m i l l i o n (US) paid as compen-sation represented more than the actual book value of $100 m i l l i o n (about $50 m i l l i o n US) as the stated t o t a l assets of DEMBA. One can only speculate as to the reasons for the extra $3.5 m i l l i o n . On the one hand, i t may have been that the r e a l value of DEMBA was purposely under valued to-t>evade income tax. On the other, i t may have represented the con-cession paid by the government to ALCAN for i t s f i n a l approval of the n a t i o n a l i z a t i o n . U n i l a t e r a l action by the Government would not s i t well v/ith "international public opinion", especially American, on whose good favors the government be-came increasingly dependent. Secondly, what or who i s ultimately held responsible for payment i s very conspicuous by i t s absence from any o f f i c i a l publication. On th i s basis i t i s not idle, conjecture to suggest that ALCAN refused to 148 > /* a c c e p t t h e Government p r o p o s a l .for payment out o f t h e p r o f i t s o f t h e n a t i o n a l i z e d e n t e r p r i s e . I t can be s a i d , w i t h reasona-ble a c c u r a c y , t h a t ALCAN f o r e s a w d i f f i c u l t i e s by the government, i n a d d i t i o n t o t h e p r e s s u r e s t h a t ALCAN would t r y to a p p l y i f the government atte m p t e d t o r a d i c a l l y r e o r -g a n i z e t h e n a t i o n a l i z e d e n t e r p r i s e (Guyana B a u x i t e Company -GUYBAU). The o n l y o t h e r a l t e r n a t i v e f o r payment, o f c o u r s e , i s f r o m g e n e r a l government r e v e n u e s . Though t h i s may n o t seem a c r u c i a l i s s u e on f i r s t s i g h t , i n a w o r l d o f i n c r e a s i n g i n -f l a t i o n and mounting d e f i c i t s p e n d i n g i t becomes p a r t i c u l a r l y i m p o r t a n t f o r ALCAN. The case o f H a i t i e a r l i e r t h i s c e n t u r y i s p a r t i c u l a r l y i n s t r u c t i v e on t h i s p o i n t . The N a t i o n a l C i t y Bank o f New York a f t e r " b u ying u p " an o u t s t a n d i n g Trench l o a n t o the H a i t i a n Government " r e v i s e d t h e c o n s t i t u t i o n and r a n H a i t i i n i t s own i n t e r e s t " . I t i s d o u b t f u l t h a t ALCAN has any such grand schemes i n mind, but i t would not be s t r e t c h i n g t h e t r u t h t o suggest t h a t such t h i n k i n g i s t h e l o g i c a l outcome of t h e r e f u s a l t o a c c e p t payment from t h e p r o f i t s o f GUYBAU. I n o t h e r words, t h e e n t i r e economy i s h e l d ransom f o r GUYBAU's d e b t s . ALCAN's e n v i s i o n e d f e a r , however, of a r a d i c a l r e o r g a n i z a t i o n o f GUYBAU were i l l f ounded. The government's immediate concerns were: ( l ) management, (2) markets and (3) 76 w o r k i n g c a p i t a l . On a l l t h r e e i s s u e s i t v/as demonstrated 149 t h a t , as G a l t u n g n o t e d w i t h o i l and the OPEC n a t i o n s , i t was simp3jy a change i n b a r g a i n i n g s t r a t e g y , n o t a change i n i n t e r n a t i o n a l s t r u c t u r e , though i n t h e ca.se o f Guyana i t r e p r e s e n t e d a f u r t h e r s t e p . B e s i d e s t h e appointment o f t h e Board o f D i r e c t o r s , v/hich i n any case v/ere p o l i t i c a l a p p o i n t e e s , the government r e t a i n e d t h e f u l l complement of t h e " s e n i o r management s t r u c t u r e " o f DEMBA. V/ith t h e e x c e p t i o n o f the F i n a n c e C o n t r o l l e r and A d m i n i s t r a t i v e C o - o r d i n a t o r t h e o t h e r appointments v/ere DEMBA employees. "Mr. Thomas M. Templeton, S c o t t i s h h o r n M i n i n g E n g i n e e r and a t p r e s e n t G e n e r a l S u p e r i n t e n d e n t o f Mines a t DEMBA, f o r t h e o v e r - a l l C o - o r d i n a t i o n i n the M i n i n g , B a u x i t e and A l u m i n a d i v i s i o n s . The new Company's (GUYBAU) F i n a n c e C o n t r o l l e r w i l l he Mr. A.A. K r i s h n a n who had been r e c r u i t e d on secondment from the Govern-ment o f I n d i a ... A p p o i n t e d as S e r v i c e s C o - o r d i n a t o r t o t h e new company i s Mr. Claude A. S a u l , E l e c t r i c a l S u p e r i n t e n d -ent a t the Demerara B a u x i t e Company DEMBA) Mr. Malcolm M. Johnson u n t i l r e c e n t l y , t h e G e n e r a l Manager o f the G r e a t e r Mackenzie Development T h r u s t w i l l t a k e over as A d m i n i s t r a t i v e Co-o r d i n a t o r . Heading the company W • s i x d i v i s i o n s v / i l l he Mr. James Blackaian, p r e s e n t l y Super-i n t e n d e n t G e n e r a l E n g i n e e r i n g Department t o be G e n e r a l S u p e r i n t e n d e n t - S e r v i c e s ; Mr. Campbell M c K i l l o p Howie, G e n e r a l S u p e r i n t e n d e n t d e s i g n a t e B a u x i t e P l a n t and p r e s e n t l y Mines T e c h n i c a l S u p e r i n t e n d e n t v / i t h DEMBA; Mr. C l a r e n c e E . London, a t t h e moment a c t i n g C h i e f E n g i n e e r a t LEMBA, to he S u p e r i n t e n d e n t - A l u m i n a P l a n t ; Mr. " V i c t o r Smith t o he S u p e r i n t e n d e n t -E n g i n e e r i n g and p r e s e n t i n g S u p e r i n t e n d e n t 150 ( a c t i n g ) Equipment Maintenance and Shops Department; Mr. H u i h e r t V e g t e r , A s s i s t a n t G e n e r a l S u p e r i n t e n d e n t o f Mines d e s i g n a t e and p r e s e n t l y Super-i n t e n d e n t .of t h e M i n i n g D i v i s i o n o f DEMBA; Mr. Gordon A..Yearwood t o he G e n e r a l S u p e r i n t e n d e n t - -Purchasing who i s s s e s e n t l y P u r c h a s i n g Agent o f DEMBA". The o b v i o u s r e s u l t o f such appointments was t h e c o n t i n u a t i o n of t h e o r g a n i z a t i o n a l s t r u c t u r e o f DEMBA w i t h the same p r o -j e c t i o n o f o u t p u t quotas and market demands. In a d d i t i o n worker-management - r e l a t i o n s h i p v/as a s s u r e d maintenance o f i t s t r a d i t i o n a l f o rm. One does n ot have t o l o o k too h a r d t o f i n d t h e r e a s o n f o r such a p o l i c y . S i n c e the government's f o r t u n e s became more o r l e s s dependent on t h e su c c e s s o f GUYBAU, l a b o r s t a b i l i z a t i o n v/as a n e c e s s a r y c o r o l l a r y . The s i l t l a d e n Demerara R i v e r c r e a t e s a p e r p e t u a l sand b a r a c r o s s t h e mouth o f the r i v e r , w h i c h makes i t i m p o s s i b l e f o r ocean g o i n g v e s s e l s t o e n t e r . To t r a n s h i p Guyana's b a u x i t e t o American and Canadian s m e l t e r s , t h e r e f o r e , ALCAN v e r y e a r l y on i n i t s o p e r a t i o n s had to c o n s t r u c t an e n t r e p o t p o r t i n T r i n i d a d , Chaguaramas T e r m i n a l s L i m i t e d , as a s t o r i n g depot where the b a u x i t e c o u l d be l o a d e d onto ocea^n g o i n g v e s s e l s . A f t e r t h e n a t i o n a l i z a t i o n o f DEMBA, however, ALCAN m a i n t a i n e d c o n t r o l o f t h e p o r t t h u s f o r c i n g GUYBAU to. depend on ALCAN's f a c i l i t i e s f o r t h e m a r k e t i n g o f i t s b a u x i t e . 151 Indeed, ALCAN attempted to deny the use of the f a c i l i t i e s of Chaguaramas Terminals Limited to the nationalized enter-prise. The Government of Trinidad and Tobago had to i n t e r -vene to assure the Government of Guyana that the port f a c i l i t i e s v/ould he made available to GUYBAU for the trans-shipment of i t s bauxite. GUYBAU, however, had no such luck i n i t s search for markets. While i t i s true that ALCAN obtained 9 percent of i t s alumina grade ore from GUYBAU i n 1971, with a further promise to purchase 50 percent of the metal-grade ore produced by GUYBAU,' the contract was only for the period 1971-1972, no because of ALCAN's previous commitments to i t s customers. The Government, however, v/as making much p o l i t i c a l yardage out of the fact that i t had found new markets for GUYBAU's bauxite i n Eastern Europe and Asia, s p e c i f i c a l l y Yugoslavia, Japan and the People's Republic of China. The sale of calcined ore to Japan and Yugoslavia are not, however, new marekts but trad-7 9 i t i o n a l customers of DEMBA retained by the Government. One does not have to look very far to see the obvious p o l i t i c a l overtones v/hich such agreements contain. In addition i t i s doubtful whether the Government would have encountered any d i f f i c u l t i e s i n obtaining markets for calcinsd ore, since i t has a v i r t u a l monopoly on the "free world" of that p a r t i c u l a r grade of bauxite ore. It soon became apparent, however, that i t needed 152 much more than p o l i t i c a l gamesmanship to s e l l bauxite. The government i t seems, either as a resu.lt of ALCAN's denial of t r a d i t i o n a l outlets, or of i t s own f a i l u r e , v/as f i n d i n g i t d i f f i c u l t to market a l l of Guyana's bauxite. As & r e s u l t , i t took v/hat many consider a retrograde step, by r e t a i n i n g the services of an'American marketing firm. "By the appointment of Pliil i p p Bros., the US subsidiary of the giant South Af r i c a n octopus, the Anglo-American Corporation, as the sales agent of th e nat i onali zed-Guyana Bauxi t e Sompany (GUYBAU), the PNC regime plac e d Guyana's Baux i t e f i r m l y under US control. At the same time i t exposes i t s posturings as a c r i t i c of apartheid and a supporter QQ of the A f r i c a n l i b e r a t i o n movement". The problem of c a p i t a l financing v/as solved even before the government took e f f e c t i v e control of DEMBA. Through negotiations the Government v/as able to convince Chase Manhattan Bank that GUYBAU v/ould not r a d i c a l l y depart from i t s t r a d i t i o n a l structure to render i t a f i n a n c i a l l i a - b i l i t y . "Mr. Hoyte (Minister of Finance) explained that i n the circumstances of the take-over the pr§sent owners of DEMBA v/ould be u n w i l l i n g to continue placing orders for inputs f o r which they v/ould be l i a b l e when operations at linden (form-e r l y Mackenzie-Wismar-Christianburg) were no longer t h e i r s . It i s v i t a l l y , necessary that orders continued to he placed s o^ t H a t smooth operations' sTTouTd continue af~X£nd"en7^~~~*" As a result', an arrangement has been made v/ith ALCAN to continue ordering 153 the r e q u i r e d inputs v/ith the govern-ment g i v i n g the assurance that ALCAN v/ould he reimbursed through $4.4 m i l l i o n (US) c r e d i t through the Chase Manhattan Bank." A few months l a t e r the Government v/as able t o s i g n an agree-ment w i t h the World Bank f o r an a d d i t i o n a l $10 m i l l i o n (Guyana) l o a n , v/hich the Americans had p r e v i o u s l y refused. That i t was not j u s t a matter of a p p l y i n g pressure on the Americans through i n t e r n a t i o n a l p u b l i c opinion was demon-s t r a t e d by the f a c t that the United States r e a d i l y approved op a renev/al of Guyana's sugar qtiota. In a d d i t i o n to these developments, v/hich had the e f f e c t of r e a s s u r i n g North American I n t e r e s t s of the c o n t i n -u a t i o n of GUYBAU w i t h i n the t r a d i t i o n a l framework e s t a b l i s h e d by DEMBA", m i n i s t e r s of the government were quick to dispel'' any n o t i o n of Guyana as an investment r i s k . The M i n i s t e r of Mines', Hubert Jack", f o r example i s reported t o have t o l d New  York Times (31 November 1972) Correspondent Richard Severo that "Our p o s i t i o n v/as alv/ays one of p a r t i c i p a t i o n not 83 n a t i o n a l i z a t i o n " . On another occasion the M i n i s t e r of State and Foreign A f f a i r s ' , S h ridath Ramphal, was rep o r t e d as s a y i n g : "We have got to disabuse the i n v e s t o r s mind about ALCAN. Enlightened business-men should he more happy than f e a r f u l a t what we are doing ... What we want are r e l a t i o n s h i p s on agreed p a r t n e r s h i p . This i s what provides s e c u r i t y f o r the i n v e s t o r " . 154 Even the 3rime Minister', as early as A p r i l 1971 when negotiations, for the f i n a l take over of DEMBA were s t i l l i n progress, voiced i n c h a r a c t e r i s t i c s t y l e , the government's guarantee of foreign investments. "We appreciate that our would-be partners, w i l l want, i n fact i n the world i n which we l i v e , w i l l be e n t i t l e d to f a i r returns on p r o f i t s on t h e i r investment i n c a p i t a l equipment s k i l l s and technology. These we are prepared to guarantee and ensure. But we s h a l l not have another DEMBA v/ith a l l that e n t a i l s and connotes ffi i n terms of economic e x t r a - t e r r i t o r i a l i t y . " No doubt Mr. Burnham means what he said about not 'having another DEMBA. But i s i t enough to begin the process of an independent development? Even the Government owned GUYBAU at t h i s stage has shown that i t i s not l i k e l y to proceed i n that d i r e c t i o n . As a matter of f a c t , taking ALCAN's' s t a t i s t i c s at face value', we see that 36 percent of a l l DEMBA's expenditures were i n 'the c r u c i a l areas of Supplies and Services. We know, however, that even t h i s amotmt i s a gross under-estimation since large quantities of machinery and building material had been imported duty free and tax free. It v/ould not he i d l e conjecture", therefore, to assume that t h i s figure for GUYBAU v/ould necessarily increase, commensurate v/ith i t s status as 'independent e n t i t y . We also know that very l i t t l e of t h i s i s spent i n the l o c a l economy and because of the high technological content that characterizes the industry most of 155 t h i s i s s p e n t f o r a borrowed t e c h n o l o g y . To what e x t e n t t h i s w i l l he h e l d over t h e 'government' s head I s , o f c o u r s e , not-known. What i s known, however, i s the f a c t t h a t because o f t h e monopoly o f t e c h n o l o g y , c o u n t r i e s o f t h e t h i r d w o r l d a r e b e i n g made t o pay i n c r e a s i n g l y e x o r b i t a n t p r i c e s f o r such t e c h n o l o g y . "These payments a r e gr o w i n g s t e a d i l y a t a r a t e which i s e s t i m a t e d by UNCTAD S e c r e t a r i a t a t about 20 p e r c e n t per annum on t h e average and a r e a b s o r b i n g an i n c r e a s i n g p r o p o r t i o n o f t h e e x g e r t e a r n i n g s o f d e v e l o p i n g c o u n t r i e s " . Of c o u r s e , t h e r e t e n t i o n o f DEMBA 1s " s e n i o r management s t r u c t u r e " by t h e n a t i o n a l i z e d e n t e r p r i s e i n s u r e s t h e con-t i n u e d r e l i a n c e on Canadian i n d e e d ALCAN's t e c h n o l o g y f o r the m i n i n g o f Guyana's b u a x i t e . T h i s n e c e s s a r i l y , f u r t h e r e x a c -e r b a t e s t h e dependency o f GUYBAU and t h r o u g h i t , t h e r e s t o f the economy on t h e N o r t h American market. 156 FOOTNOTES 1. Halliday",;?. Arabia Without Sultans. Penguin Books, Middlesex', 1974, p. 498. ~ 2. op. c i t . , p. 498-499. 3. Warren, B. Imperialism and C a p i t a l i s t I n d u s t r i a l i z a t i o n . New Left Review, #81 September-October, 1973. See also I%rx~, 'X.~^apitai, Vol. 111.. (International Publishers, New York", 1967)", Chapter xx. 4. Quoted In Dos Santos, T. Changing Structure of Foreign Investment i n Latin America i n Petras, J. and Z e i t l i n , M. (eds.) L a t i n America: Reform;or Revolution? (Paweett World l i b r a r y , New York, 1 9 T 8 1 , p. 96. 5. op. c i t . , p. 97. 6. Condliffe, J.B. The Commerce•of Nations, (Allen and Unwin, London, 1951), p; 218, Quoted i n Mandel, E. Marxist Economic. Theory, Vol. 2 (Merlin Press, London, 1968) ' , p. 460. 7. Chileote", R.H. Dependency: A C r i t i c a l Synthesis of the l i t e r a t u r e Latin Atfetcican^e^spe^Tv^s"7" Vol«• ^ o» 1 Spring 1974, p. 13. 8. United Nations: Multinational Corporations i n World Development (United 'Nations Publications, New~~7ork~, 1973) p. 50. 9. Best, L. Size and Survival, New World Quarterly, Guyana Independence Issue 1966, p. 1, quoted i n 0'Connor, J. International Corporations and Economic Underdevelopment. Science and Society, Vol. xxxiv, No. 1, March, 1973", P. 57. 10. Girvan, N. The Development of Dependency Economics i n the Caribbean and Latin-America. Social and Economic Studies. Vol. 22, No. 1, March 1973, p. 7. 11. Chilcote", R. Dependency, op. c i t . p. 13. For a select bibliography on the subject of dependency see Latin American Perspectives', op. c i t . 157 12. Por an early h i s t o r y of the bauxite industry i n Guyana see Garrett, A.P. A c t i v i t i e s of the Demerara Bauxite Company, Timghri: The Journal of the Royal... Agr^culjtural and Commercial S^cTety of BrTtish'""Cruiana. noT "5o", Novem-ber 1951; Evans, L.M. Almost f o r t y years i n the bauxite industry. Timehri,- op. c i t . Wo. 35, October 1956; Roach, E.H. Bauxite, DEMBA, Alumina and B r i t i s h • Guiana. Timehri op. c i t . No. 40, November 1957; Girvan, N. The ^ ^ n a t i o n a l i z a t i o n of Caribbean Bauxite; ALCOA i n Guyana, New World Quarterly, Vol. 5, No. 3 1973); also h i s The Guyana-Alcan Qonfli ct and the Nationali zation of •DEMBA. New World Quarterly, Vol. 5, No. 4, 1972. 13. Quoted i n Girvan, N, The Denationalization of Caribbean;. Bauxite: ALCOA in " Guyana. New World Quarterly, Vol. 5', No. 3, 1971,' p. 43. 14. op. c i t . 15. Roach', E.H. Bauxite, DEMBA, Alumina and B r i t i s h Guiana. Timehri No. 40', October 1957, p. 11-12. 16. Girvan, op. c i t . p. 44. 17. Davis, A.V, Evidence Given Before the D i s t r i c t Court of: the United States f o r the Southern P i s t r i c t _ o f New York, The UnTteT~St'ates of America vs. The AluminumT^onrpany of America, 1939, quoted in.Girvan"op. c i t . p. 44. 18. U i h l e i n , J. Quoted i n Girvan, op., c i t . p. 44. 19. op. c i t . p. 45. 20. Girvan", op. c i t . p. 46-47. 21. The B r i t i s h West Indies Yearbook'. 1930. 22. Reno," P. • The Ordeal of B r i t i s h Guiana. Monthly Review New York, 1964, P. 99 (My"emphasis). 23. Caribbean Economic Almanac', 1964-1966, p. 40. 24. Girvan, N. The Caribbean Bauxite Industry: TheScope fo r R a t i o n a l i z a t i o n and Heg3-"onal Collaboration. "("Institute of Social and Economic Research, University of the West Indies, Jamaica, 1967) p. 4. 25. .liberation Support Movement: Getting Hip to Imperialism: ALCAN, Jajnaica and Cab ora Bassa./ (information Center, Richmond, B.C. Canada; July 1971, p. 16. 158 26. St. Pierre, M, The Sociology of Decolonization, the • Case of Guyana Bauxite. New World Quarterly, Vol. 5, No. 4, 1972, p. 51. 27. Thomas, C. Dependence and Transformation: The Econ-omic s of the"!!^^ : emphasis). CMonthly Review Press, New York, 1974), p. 59. 28. David", W.I. The Economic Development of Guyana, 1953-1964 (CIarendon Press, Oxford, 1969) p. 190~ See also various issues of B r i t i s h West Indies Yearbook. 29. B r i t i s h West Indies Yearbook, 1930, p. 368. 30. Jagan, Cheddi, Speech i n t h e / l e g i s l a t i v e Council, March 1948. Quoted i n Jagan, C. The West on T r i a l : The Eight f o r Guyana's Freedom. (Seven Seas Books, East B e r l i n , 1972), p. 75. 31. B r i t i s h West Indies Yearbook. 1929, p. 394. 32. Jagan, C. The West on T r i a l , op. c i t . p. 76-77. 33. Reno, P. The Ordeal of B r i t i s h Guiana', op. c i t . p. 99. 34. Grant, C.H. P o l i t i c a l Sequel", to ALCAN Nationalization i n Guyana: The International Aspects. Social and  Economic Studies, Vol. 22,' No. 1973', P. 259. 35. Girvan, N. Making the Rules of the Game: Company-Country Agreement i n the Bauxite - Industry. Social and  Economic Studies. Vol. 20, No. 4, 1971, p. 409. ... f iwhile the agreement rel a t e s to the establishment of an alumina, plant and a smelter', there Is no provision f o r p r i c i n g the alumina and aluminum to he produced, although by the la t e 1960's these products were con-t r i b u t i n g f a r more to t o t a l export value than metal-grade Bauxite. Also there v/as no provisions f o r checking on the values used f o r exports of calcined and chemical-grade bua±ite." This, the Brokopondo agreement, v/as claimed to he the most advanced company-country-agreement yet devised ( s i c ! ) . In the same a r t i c l e , i n a footnote the author r e l a t e s ; " I t v/as also suggested to me i n these conversations that the company-had been undervaluing alumina and aluminum exports as a r e s u l t of the freedom allowed them", op. c i t . p. 409. 159 36. Davis, N. Evidence given before the Canadian Senate  Standing Coniraittee on"7oreign A f f a i r s . No. 3, p. 19. Quoted i n Grant, C.H. Company downs' i n the Caribbean: A Preliminary Analysis of Christianbiiry-Wismar-Mackenzie Caribbean Studies, Vol. 11, No. 1, A p r i l 1971. p. 49. 37. Grant, C.H. P o l i t i c a l Seqtieal to ALCAN Nationalization op. c i t . p. 259. 38. Girvan, N. The Caribbean Bauxite Industry, op. c i t . p. 6. "The hulk of Caribbean Bauxite i s transferred from one branch to another of the same company and the pro-ducers cannot he taxed i n the normal way by deducting cost from actual revenue. Naively Caribbean govern-ments at f i r s t simply accepted the corporations valua-tions v/ith the r e s u l t that while the average price of;. US aluminum rose by 20 per cent between 1939 and 1956', the value of domestic bauxite by 80 percent the price set on imports from the Caribbean hardly changed, op. c i t . p; 6. See; also Reno, P. The Ordeal of B r i t i s h  Guiana', op. c i t . "Prom 1938 to 1959, the general US price level;rose nearly one and one half times. During these years', the price of bauxite produced i n the United States doubled (from $5.36 to 111.17)- R.T.). Yet the price of bauxite imported from Surinam and B r i t i s h Guiana was almost the same i n 1959 as i t had been i n 1938. But the fact that the companies"were holding the price of imported bauxite at a dea5- l e v e l did not prevent them from r a i s i n g the price of Aluminum, v/hich went up 78 percent between 1948 and 1959". op. c i t . p. 100. 39. Girvan, N. Foreign Capital and Underdevelopment i n  Jamaica. ( i n s t i t u t e of Social and Economic Research, University of the West Indies", Mona, Jamaica, 1971), p. 48. 40. Girvan, N,, op. c i t . p. 39. 41. Reno', P., op. c i t . , p. 100. 42. Reno, P.,; Aluminum.. Prof i t and the Caribbean People, i n Rhodes, R.I. ed. Imperialism-and Underdevelopment: A Reader", (Monthly Reviev/ .""Press, New Tork, 1970j, p. 85. 43. Reno, P. The Ordeal of B r i t i s h Guiana, op. c i t . p. 101. 44. Quoted i n David, W. op. c i t . , p. 215. 160 45. op. c i t . , p. 216. 46. David, ¥. op. c i t . p. 214. 47. Grant, C.H,, Company Towns i n the Caribbean, op. c i t . p. 48. 48. Girvan, N., op. c i t . , p. 3. 49. op. c i t . , p. 7. 50. op. c i t . , p. 11. 51. Worrell, D. Canadian Economic Involvement i n the West Indies, i n Forsythe, D. l e t the Niggers. Burri: The S i r George Williams University A f f a i r and Its^Caribbean 3 T t i ^ ^ . 51. 52. Girvan, N. op. c i t . , p. 11. 53. United Nations, Economic Survey of Latin America, 1972 (United Nations Publication, JNew lork, "1974;, p. 100. 54. United Nations, Economic Survey of L a t i n America, 1970 (United Nations Publication, flew ¥ork, 1972j p. 198. 55. United Nations, Economic Survey of L a t i n America, 1972 op. c i t . , p. 98. 56. op. c i t . p. 98. 57. Jagan, op. c i t . , p. 368. 58. Sukdeo, P.. Trading Strategies and Economic Development i n Guyana; (* Department of P o l i t i c a l Science," University of Guyana,-Occasional Paper No. 5, 1973), p. 13. see also Jagan, op. c i t . , p. 383. 59. Milne, R.S. Impulses and Obstacles to Caribbean P o l i t i c a l integration. International Studies Quarterly, Vol. 18", No. 3', September 1974, p. 304. See also Sukdeo, P. op. c i t . , p. 21. 60. Sukdeo, P. op. c i t . , p. 18. 61. op. c i t . , p. 27. 62. Beckford, G. Brewester, H., et&al. Devaluation and Dependence i n Girvan, N. and Jefferson, 0. (eds). 161 Readings In the P o l i t i c a l Economy of the Caribbean. ( I n s t i t u t e of Social and-Economic <Res earch, University of the West Indies, Mona, Jamaica, 1971)", p. 163. 6 3 . Jagan", C, op. c i t . , p. 386. 6 4 . Sukdeo, P., op. cit.', p. 8. 65. Hoyte", D. quoted i n News, from Guyana, M i n i s t r y of Information", Georgetown, exact dates not known, A p r i l 1971, p. 3. 66. Sukdeo, P. , op. c i t . p. 8. 67. Jagan, C. Address to the 18th PPP Congress, reprinted; i n Thunder. Journal of the People's Progressive Party, Vol. 6, 'N6. 3, July-September 1974, p. 15. 68. Por a discussion of t h i s "debt trap" see Hayter, T. Aid as Imperialism (Penguin Books, Middlesex, 1971) Also Payer, C. The Debt Trap: The l g and the Third World (Penguin Books, Middlesex, 1974). 69. Burnham, L.F.S. Aldress to the 13th Annual PNC Congress, A p r i l 5th, 1970. Quoted i n News Prom- Guyana.. (Ministry of Information, Georgetown,) February, 27, 1971, p. 2. 70. Burnham, L.P.S. Government's Proposed Terms of Nego-t i a t i o n with DEMBA. Quoted i n News from Guyana, op. c i t . p. 2. See also Girvan, N. Guyana-ALCAN Con'f 1 i c t , and the Nationalization of DEMBA, op. c i t . , p. 43-44. 71. Girvan, N., op. c i t . , p. 46. 72. Burnham, L.P.S. New Proposals to Bleed the Industry. News From Guyana, op. c i t . , February 27, 1971, p. 4. 73. Girvan, N.', op. c i t . , p. 45. 74. Jagan, C. The Truth about Bauxite Nationalization, A PPP pamphlet (Georgetown, 1971). 75. Joint Government, ALCAN Press Statement. 76. Hawkins', I.,. Guyana Bauxite: -in Search of Markets and Management. Financial Times, Thursday A p r i l 1st, 1971',' P. 4. 162 77. News fjlom Guyana, Min i s t r y of Information, Georgetown, May 22, 1971, p. 1-2. . 78. ALCAN, Annual Report, Montreal, 1971, p. 6. 79• News from Guyana";' op. cit.,.March 20", 1971, p. 2 and flews" from Guyana, op. c i t . , A p r i l 10, 1971, p. 4. 80. Jagan, C. Address to the 18th PPP-Congress. Reprinted i n Thunder, October-December 1974, Vol. 6, No. 4, p. 7-8. 81. News from Guyana, op. c i t . (my emphasis) June 12, 1971, 82. Jagan, C. The West on Trial".' op. c i t . p. 407. 83. Quoted i n Jagan, C., op. c i t . p. 6. 84. Quoted i n Jagan, C.', op. c i t . p. 6. 85. Burnham, L.F.S.,•Partnership i n Development, News from  Guyana, op. c i t . , A p r i l 24, 1971, p. 4. 86. DEMBA - Where Did the Money Go? The ..DEMBA. ^ Record in""l?u"y^ "Bauxite 'Company l i m i t e d , "^eorgetovm, 1970), p. 9. 87. United Nations, Multinational Corporations i n World-Development, (United Nations ^ub'lications, ^ew ^ork, 1973), P. 50. CONCLUSION This thesis attempted to outline the changing re l a t i o n s h i p between the advanced c a p i t a l i s t countries and the underdeveloped countries of the t h i r d world. As I t r i e d to point out', the re l a t i o n s h i p i s far from assuming any pre-cise configuration, because of the complex network of t i e s that exist between and among the developed and the under-developed countries. Given the nature of the underdeveloped economy, subject to sudden changes and p o l i t i c a l upheavals, the intervening mediator between the underdeveloped economy and i t s metropole must employ a series of strategies', i f i t i s to he successful i n producing the desired r e s u l t s . In a highly competitive s i t u a t i o n such as this', success demands f l e x i b i l i t y . As a r e s u l t , imperialism has assumed diffe r e n t forms i n diffe r e n t periods of hi s t o r y , either as a r e s u l t of the changing demands of c a p i t a l i s t development or by the people of the underdeveloped economy who attempted to break the vicious^., c i r c l e of poverty into v/hich they were trapped. Thus, i t would he d i f f i c u l t to speak of imperialism as an unchanging conceptual h i s t o r i c a l category", and at the same time", be able to maintain any semblance of h i s t o r i c a l or th e o r e t i c a l v a l i d i t y . Rather, i t i s more appropriate to speak of the changing character of imperialism as i t emerges from the changes i n the power constellations of a c a p i t a l i s t centre and i t s periphery. Further, i t i s not simply a question of 164 "economic p a r a s i t i s m " or f (unequal exchange", though both may have some economic v a l i d i t y i n p a r t i c u l a r i n s t a n c e s , hut r a t h e r the case that the e n t i r e gamut of r e l a t i o n s h i p s of a c a p i t a l i s t centre and i t s periphery must he brought under the scrupulous eyes of the a n a l y s t . I t i s only such an approach that can l e a d to the understanding of i m p e r i a l i s m i n a l l i t s p o l i t i c a l and economic r a m i f i c a t i o n s . As we t r i e d to point out i n the second chapter, the p o l i t i c a l f o r c e s of n a t i o n a l i s m has brought a l o t to hear, e s p e c i a l l y over the .last decade, on the r e l a t i o n s h i p between the advanced c a p i t a l i s t c o u n t r i e s and t h e i r periphery. As a r e s u l t , the advanced c a p i t a l i s t c o u n t r i e s have r e l i n q u i s h e d c o n t r o l of key sectors of the underdeveloped economy to l o c a l p a r t i c i p a t i o n and c o n t r o l . Such changes by themselves, however", do not put an end to the dependent-underdevelopment to which the l o c a l . economy has been subjected. As a matter of f a c t , the dependency i s f u r t h e r exacerbated by the f a c t that the advanced c a p i t a l i s t c o u n t r i e s withdraw to such safe areas of manipulation as teclinology, patent r i g h t s , energy, etc.^JHae^-—-n a t i o n a l i s m seeks only to replace the i m p e r i a l bourgeoisie w i t h i t s own l o c a l n a t i o n a l and comprador counterparts; without attempting i n any systematic manner to break the c i r c l e of poverty i n t o v/hich the underdeveloped economy i s drawn. The s h i f t i n investment p a t t e r n s , n e v e r t h e l e s s , s i g n i f i e s an important cha.nge i n the s t r u c t u r a l r e l a t i o n s h i p 165 between the advanced c a p i t a l i s t countries and the under-developed countries of the t h i r d world. The r i s i n g t i d e of nationalism and national l i b e r a t i o n movements have been f a i r warning that ( l ) "the advanced c a p i t a l i s t countries 'must widen t h e i r margin of autonomy, both economically and p o l i t -i c a l l y " ; and (2) the l o c a l bourgeoisie must be given greater freedom to maneuver the choices available to the under-developed economy. What i t a l l means i s that ( l ) the repro-duction of the c a p i t a l i s t process on an "increasingly pro-gressive scale" has resulted i n the further deepening and therefore strengthening of the process of c a p i t a l i s t develop-ment; and (2) the incorporation of junior partners, a l b e i t dependent ones, into the global network of imperialism. Thus, the process of imperialism i s not simply the r e s u l t of the Machivellian p o l i t i c s of the advanced c a p i t a l i s t countries", but must also cope v/ith the changing demands of nationalism, as i s exemplified by the OPEC countries. l a s t , but by no means the l e a s t , MNCs, as the strongest and sometimes the only tentacles of monopoly capitalism, have been the foremost intervening mediator between the advanced c a p i t a l i s t countries and the underdeveloped countries of the t h i r d world. Prom t h e i r vantage point of Europe and North America and t h e i r global surveillance of corporate a c t i v i t i e s , MNCs have", from the very early develop-ment of capitalism, been able to capture and control the key 166 sectors of the underdeveloped economy. As we attempted to show, i n the case of the bauxite industry of Guyana, t h i s v/as by no means a premonition on the part of MNCs, nor an inherent propensity to conspire, hut v/as the l o g i c a l outcome of corporate strategy f o r v e r t i c a l integration of a l l facets of the process of production. The r e s u l t has been that today a mere handful of MNCs account for the hulk of resource extraction and development i n the underdeveloped countries. Because of the lack of investment c a p i t a l i n these areas, MNCs took undue advantage of t h e i r predominant position by demanding and receiving large economic concessions, that resulted i n the free r e p a t r i a t i o n of p r o f i t s and other econ-omic benefits through a host of"manipulative practices. The obvious r e s u l t i s that the underdeveloped economy i s sub-jected to a stunted growth. The anger of nationalism and national l i b e r a t i o n movements have been aimed at precisely such practices? the ubiquitous violence directed at MNCs v/as the l o g i c a l outcome. Even "respectable" governments have gotten into the act, c r i t i c i z i n g the r o l e of MNCs and attempting i n various ways to po l i c e , r e s t r i c t and generally control t h e i r a c t i v i t i e s . Canada, f o r example, as early as 1968, came up v/ith the "Watkins Report" (Task Force on the Structure, of Canadian Industry, Foreign Ownership and the Structure of Canadian Industry), and i n 1973-74 went so f a r as to enact a h i l l " , Foreign Investment Review Act, to r e s t r i c t 167 the a c t i v i t i e s of MNCs. Even a mild mannered organization such as the Social and Economic Council of the United Nations, has produced several lengthy reports, Multi-national Corpora-tions i n World Development, c r i t i c i z i n g the rol e of MNCs. The Social and Economic Council went as f a r as s e t t i n g up a special Commission to survey and report on the a c t i v i t i e s of MNCs. The r e s u l t of a l l t h i s adverse p u b l i c i t y has been that MNCs have been w i l l i n g and, recently, even advocating the p a r t i c i p a t i o n of l o c a l governments i n t h e i r a c t i v i t i e s . 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