Perspective on the Peruvian Military - Part I
Locker, Michael
The Peruvian military coup of last October 3rd triggered the most radical institutional changes that have occurred in any Latin American country since the Cuban Revolution. The outright...
...The latter was given a boost by British capital, which financed the construction of railroad lines penetrating deep into the Andes...
...The military, largely led by officers recruited from the middle sectors, sided with the upper class to preserve that class' privileges and consequently to gain privileges for itself (it became, therefore, a "captive" element of the upDer class...
...292.0 1956 40.8 36.8 394.0 33 22 12 383.0 1957 51.4 34.2 445.4 34 24 12 332.0 1958 30.2 36.2 475.6 17 19 - 1 409.0 1959 18.2 43.8 493.8 26 23 4 428.0 1960 11.1 54.9 504.9 58 48 11 446.0 1961 14.2 62.6 519.1 61 4 57 437.0 1962 18.4 66.1 535.5 52 1 51 453.0 1963 - 4.9 72.0 530.6 70 1 65 448.0 1964 10.5 70.3 541.1 83 2 77 464.0 1965 17.5 76.0 558.6 98 -6 98 518.0 (a) The figures rounded off in millions do not tally In the consulted source...
...Lima was chief beneficiary of the internal economic boom: the first industries and banks were founded in that city and the growth of imports reinforced a small commercial class...
...Independence and the Early Republican Era The fall of the Spanish and the concommitant rise of the British Empire created the forces which led to Peruvian independence...
...Minimum contribution for 1-yr...
...1 9 After losing the 1956 election, Belaunde founded the Partido Accion Popular (PAP), which emerged as the best organized and most popular new party on the moderate left...
...During the depressions and wars, industrial and economic development in the Latin American satellites did indeed spurt ahead -- only to be again cut off or rechannelled into underdevelopment by the subsequent recuperation and expansion of the metropolis or by the restoration of its active integration with its satellites...
...If it chooses the upper class, the base of the party will benefit only if and when the upper class is rich and strong enough to institute integrative reform (i.e., when it has access to and is able to apprpriate a large portion of the economic surplus for housing, education, health, credit, etc...
...keptembe INSs...
...Box 57, Cathedral Station, N.Y., N.Y...
...This continual drainage of surplus is the primary cause for Peru's underdevelopment...
...in 1963, to 15.6 percent...
...No doubt the lessons of the Cuban Revolution, where blocked reform had led to a mass movement that swept aside the established military, reinforced the generals' thinking about whom to support...
...The figures also reveal that manufacturing made the greatest gains, though mining is still by far the largest sector...
...W. R. Grace & Co., a British firm at the time, was founded on the export and sale of guano...
...The dynamic sector of the Peruvian economy, export industries, increased the country's integration into the world capitalist marketplace...
...Lucrative tax concessions also encouraged the founding of manufacturing enterprises...
...International capitalism -- imperialism -- dominates their labor, expropriates their surplus, and finances their growing underdevelopment...
...The Indian communities were slowly destroyed...
...In effect, the upper class' only hope for checking the military's power was in gaining a popular mandate through APRA, which was no longer a real threat to their interests...
...Most of the economic surplus generated by the new US-owned production and capital investment was siphoned off to the world's new metropolitan center -- the United States...
...75 percent are owners of real estate agencies...
...Even banking, a key economic sector, is to a large extent now in foreign hands...
...The satellite economy was even more subject to the expansions and contractions of the world capitalist system...
...Magali Sarfatti Larson and Arlene E. Bergman, Social Stratification in Peru (Berkeley: Institute of International Studies, University of California, 1969...
...This incohesive body can choose to align with the upper class or the lower class, in each case to gain privileges for itself...
...Their presidential candidate, architecteducator Fernando Belaunde Terry, made a surprisingly strong showing, winning 36.3 percent of the popular vote...
...and in 1964 to 17.9 percent, reaching a maximum of 19 percent in 1965...
...Production generates economic surplus, which is expropriated by those who control the means of production and appropriated for further development...
...18 Moreover, younger, more progressive and nationalist military officers were attracted to Belaunde's reformist program...
...2 Supporting statistical data for much of the model put forward in this piece can be found in Anibal Quijano Obregon, "Tendencies in Peruvian Development and the Class Structure," in James Petras and Maurice Zeitlin (eds...
...Expansion first concentrat on the Coast and then the Sierra...
...This is hardly what Peru needed most, given the country's rapidly expanding population and high unemployment...
...20 Payne, p 40...
...Because of the foreign domination in most non-agricultural sectors of the economy, the upper class remained centered around the land, which in turn inhibited that class' development...
...The legacy of Spanish colonialism and British neo-colonialism siphoned off a great deal of its potential wealth, leaving it too weak or unwilling to organize the production of future non-agricultural raw materials -- minerals and oil...
...15 See New York Times (Jan...
...Odria seized power during a period of intense American capital penetration...
...Even though it sold out its principles, APRA managed to retain a mass base through a tight organizational structure, the use of its name, and support of the upper class as well as the US Government, corporations and trade unions...
...As a result of the city's increased expropriation of the countryside's surplus, and its (Lima's) subsequent development, the chain of exploitation was strengthened...
...Without such action, however, it would be impossible to integrate the lower classes and head off a social upheaval...
...The NACLA NEWSLETTER is published ten times a year by the North American The NACLA NEWSLETTER is published ten times a year by the North Amerlioan Congress on Latin Amerioa...
...16 These attempts were temporarily successful in 1945 when the moderate APRA-supported upper-class presidential candidate Bustamante won the election, legalized the Party and awarded Haya's followers several ministerial positions in his cabinet...
...by 1965 they increased that figure to 92.7 percent, leaving only $40.6 million for non-US investors...
...5 The discovery of guano, which coincided with the beginnings of steam navigation, clearly placed Peru in the orbit of British capital...
...Moreover, when it came to raising capital, the Peruvian government now turned to New York instead of London, raising about $95 million on the New York bond market in the 1920's...
...The process of monopolization of capital and penetration of the countryside accelerated the extraction of economic surplus from the rural areas into Lima and out to the metropolitan center...
...This followed a 1949 government agreement instituting a free-exchange system with unrestricted conversion of profits and repatriation of capital...
...These attempts to subvert the military institution, combined with the announced intention of abolishing the traditional military structure, greatly worried the privileged leaders of the armed forces...
...Rather than look to the landowning upper class, which was too weak to institute reforms, they chose to organize, during the 1956 election campaign, a new middle- and lower-class movement for winning control of the state...
...the creation of a new government agency to promote community development which would be called "Cooperacion Popular"' and the construction of an international highway along the eastern slope of the Andes (the Marginal Highway of the Jungle) which would not only integrate the entire country through a network of feeder roads but would also open up to exploitation and cultivation thousands of hectares of fertile, virgin land...
...A series of military revolts during the first two decades of the 19th century were triggered by the native aristocracy's discontent over unprofitable trade restrictions...
...20, 1969) as reprinted in NACLA Newsletter (Vol...
...The commercialization of agriculture and the development of mining created social and economic tensions throughout Peruvian society...
...The fate of the upper class determined the role of the military in national affairs...
...11 Documents: US Military Interventions: 1798-1945...
...of Commere...
...But Haya's alliance with the poor and weak Peruvian upper class, while benefitting the party's leadership, in fact doomed the lower classes to stagnation...
...The bizarre election ended without choosing a president when none of the candidates received the required one-third of the total vote (Haya came closest with 32.98 percent of the vote, but Belaunde was right behind with 32.22 percent...
...old General Odria, supported by some upper-class elements, ran on a third slate...
...Through this control, the country's energies have been oriented toward the export of economic surplus (in the form of commodities and capital) used to finance the development of western capitalist societies...
...19 The military's interest in the lower classes was manifested in the founding of a special military school in the mid-1950's (the Center for Higher Military Studies or CAEM...
...It failed to engage in industrial ventures, at least until they were secure, and relied heavily on economic policies adopted by the state which favored their interests...
...The Indians and peasants, constantly fighting land encroachment and exploitation, were a severe obstacle to expansion and a threat to stability...
...It should be noted, however, that only literate people were eligible to vote, thus eliminating a vast sector of the lower class, particularly the Indians...
...In particular, they identified with Belaunde's technical approach to the country's vast social problems, especially his proposal to utilize military-run civic action programs throughout the Sierra...
...The 1956 presidential election brought to power the upper-class candidate, Manuel Prado, who ironically received the formal endorsement and essential support of APRA, in exchange for the party's legalization...
...14 TABLE No...
...subscription $5 In This Issue: Perspective on the Peruvian Military - Part I...
...a comprehensive land reform, a reform of the nation's inequitable tax structure...
...For instance, several upper-class individuals were obliged to make gifts of homes or mansions to the dictator and his friends...
...The application of new national laws encouraged the commercialization of agriculture, which in turn led to the expansion and concentration of land holdings...
...12 The class organization of the upper-class core is undoubtedly the Sociedad Nacional Agraria (subsidized by the State through the proceeds of a special tax on the sales of guano to all agricultural entrepreneurs of the nation...
...The full story of APRA's willingness to sell out its radical principles for access to power is a sad chapter in the history of the Latin American left...
...Since the upper class had a strong interest in Peru's market and export service operations, as well as in small mining enterprises, a portion of the surplus did indeed accrue into its hands...
...Votes in the SNA are proportional to the area of the estate...
...14 US Naval Activity: 1946-1969...
...Among the rural and small urban proletariat (particularly sugar workers, longshoremen, miners and textile workers) a strong trade union movement grew up, leading strikes for higher wages and better working conditions...
...a program of military-civilian cooperation and a greater role for the armed forces in the overall development of the country's resources, especially in the backward provinces...
...2) the Sierra, with three great ranges of the Andes that form a massive barrier between the Coast and the Eastern Plains of the Amazon...
...During the 1950's, population pressure conflicted sharply with the increased commercialization (expansion and concentration) of the Sierra's farming, forcing the army to intervene violently several times on behalf of the large landowners...
...J.) lost its California operations through US antitrust action and saw the Peruvian fields as a source for their Far East market...
...Haya launched an uprising in Trujillo, massacring 200 military officers and men...
...The upper class had declined after World War II to the point where the military was able to exert independent power over the state...
...This role, ironically, destroyed their own future...
...Patterns of land settlement, urbanization and production thus fostered the expropriation of rural surpluses by a group of urban-based conquerors, settlers and traders...
...18 Prado won the election with 45.1 percent...
...The coastal desert requires irrigation for cultivation and those who control the water supply dominate the land...
...Under such conditions, the metropolis is forced to turn inward, thus cutting back external expansion and the subsequent drainage of economic surplus from the satellites...
...Why was a military unta carrying out such reforms and what caused the US government's relatively mild response...
...20 Opposing Belaunde in the 1962 presidential election was an upper class - APRA coalition ticket headed by none other than Haya de la Torre...
...But as Table 2 demonstrates, it proved quite profitable for the investors...
...16 The Prado government did little if anything to improve the plight of the lower classes, APRA's main base of mass support, yet the party's leadership remained loyal to the coalition and supported the president's conservative policies...
...Stephanie Rugoff also made a significant contribution 3 Andre Gunder Frank, Capitalism and Underdevelopment in Latin America: Historical Studies of Chile and Brazil (New York: Monthly Review Press, 1969...
...DIRECT FOREIGN INVESTMENTS (In US$ millions) ALL COUNTRIRS UNITLD STATX8 (a) Aecumulatd etinveet- Aooumulated Year Inflow Out/lota value etrnfngs ment Admtttane value 1955...
...Thus, the military role in Peruvian affairs, and particularly its guardianship function, has a long tradition...
...Why has the left in Peru failed, even through armed struggle, to seize the initiative...
...9 New US Investments and the Military Ascendancy After World War II, US capital poured into the country, penetrating every profitable sector of the economy...
...smelted 3/4 of Peru's silver, while the remainder was handled by another US firm -- Northern Peru Mining & Smelting Co...
...The economy's recovery, in the 1880's and 1890's, was based on the further commercialization (expansion and concentration) of land holdings for the production and export of sugar and cotton from the coastal areas, as well as mining products from the Sierra...
...tatieticel Suplemet, 10...
...But contrary to what one might expect, depressions and wars in the metropolises serve to stimulate autonomous industrialization and development in the satellites...
...5 P.O...
...The country's fantastic riches -- silver, mercury and gold -were mined in the Sierra and shipped to the mother country to finance the Empire's development...
...The Crown's policy was to incorporate the Indian labor force into the structure of colonial society as a subordinate stratum...
...The country's vast mineral wealth remained relatively untapped until the turn of the century, when J. P. Morgan and his associates started mining copper in the Pasco district...
...US investors controlled 82.7 percent of the total foreign investment in 1955...
...In 1911, Standard Oil (N...
...Lacking access to the country's economic surplus, the upper class was incapable of transforming itself from a landed aristocracy into a fully conscious bourgeoisie...
...In the 1920's and especially in the 1930's, both the disaffected middle sectors and the proletariat, lacking a political structure for expressing their interests, were largely won over by Haya de la Torre's Marxist-oriented American Popular Revolutionary Alliance (APRA...
...Not surprisingly, the rate of return on US private capital has been rising...
...The party's original radical goals included the progressive nationalization of-5land and industry (including those controlled by the United States), creation of state enterprises and planning, enlightened labor legislation, the elimination of the traditional military establishment and programs designed to incorporate the Indians into national life...
...1 PERU: US DIRECT INVESTMENTS, 1929-1967 (in US$ millions) 1929 1943 1953 1960 1967 Total 124 71 295 502 605 Mining & Smelting 80 a 4 4 c 148 275 340 Petroleum b 11 98 129 38 Manufacturing 3 6 13 32 98 Public Utilities 11 8 10 20 22 Trade 3 3 12 35 54 Other 27 15 2 11 53 aFigure for mining only bIncluded in "other" cFigure for 1946 Sources: Years 1929 and 1943: Foreign Capital in Latin America (New York: United Nations, 1955...
...The feeble and dependent bourgeoisie which did emerge failed to maintain control over the state without the support and, at times, the domination of the military...
...other years: US Department of Commerce, Survey of Current Business, various issues.-6and sewing and copying machines...
...Several times defaulted state debts were paid off with lucrative state concessions to foreigners...
...353.2...
...This stratum is caught between the pressure from the lower classes to eliminate privileges (through "democracy," populism, or socialism) and the entrenched position of the traditional elites which want to preserve their own privileges...
...By handing over economic power and, indirectly, political power to foreign interests, the upper class, in effect, also hands over political power to the military...
...Travelling to every region and appealing to all sectors of the society, he put forward a reform program that greatly impressed the new military officers who were searching for political allies with a mass base...
...These same firms accounted for 70 percent of the gold...
...12 As these studies indicate, the main source of wealth and power for the core of the upper class is modern capitalist enterprises which exploit the land...
...The Roots of Underdevelopment The mold for Peru's modern history was forged in the Spanish conquest of the Inca Empire during the 16th century...
...3 Internally, colonialism constructed a parallel structure vis-a-vis the countryside and, therefore, the Indians...
...The first period of sustained civilian-led constitutional government (1895-1914) was inaugurated, transforming the military into a professional institution (reorganized and trained by a French military mission...
...In fact, from the beginning of the Republican Era in the early 19th century to the present day, at least 23 presidents have been deposed by coups, all but one led by the military (an additional four presidents were killed in office and only 12 completed their terms...
...The country's increasing incorporation into the world market -- first through the export of wool, then guano and nitrates, to Britain -- opened the first phase of real economic development for the Peruvian ruling class...
...others were arrested or deported for alleged oppositional ctivity...
...and (3) the Selva, the vast region in the east where the mountains turn into high plains, jungles and water...
...Practically all the officers attend the school for one year, studying such sujects as Populism, Marxist theory, social planning and development economics...
...Commercial agriculture progressively advanced along the Coast, proletarianizing the peasants who stayed or went to work in the mines, while pushing many of the Indians into the mountains...
...The expropriation of economic surplus, in Andre Gunder Frank's terms, was appropriated by the metropolitan center for its growth...
...10 See Quijano, p 294 for changes in the composition of the GNP during this period...
...IPC), a 99.9 percent owned subsidiary of the second largest US industrial enterprise -- Standard Oil Co...
...Upper-class politicians never made a serious effort to acquire a permanent mass base or extend their political activity beyond the capitol...
...At times in Peruvian history when the upper class is prosperous and expanding as well as diversifying its investments -in short, trying to play the role of a national bourgeoisie -- it maintains direct control of the government and forces the military to play a more limited role in political affairs (i.e., 1895-1914...
...The power of the military to seize control of the government is inversely related to the cohesion and vitality of the upper class...
...II, No...
...When major civil disturbances were threatened by Belaunde, outgoing President Prado was quickly ousted in a bloodless military coup...
...Of course, US retail stores were founded to sell the products...
...11 For an excellent list of US corporations in Peru with a description of their activities, see Bureau of Educational and Cultural Affairs, US Department of State, Resources Survey for Latin American Countries (Washington: US Government Printing Office, 1965) pp 504-516...
...It will interpret the military's reforms in terms of the above historical-theoretical framework and point out the class nature (in national and international terms) of the reforms.FOOTNOTES 1 See NACLA Newsletter (Vol...
...11 Practically all US investments in this period were capital-intensive -- that is, they utilized the most advanced technology to raise productivity per man-hour...
...Latin America: Reform or Revolution (New York: Fawcett, 1968) pp 289-328...
...The international market for both these commodities also passed to US control.-4The North Americans also developed Latin America's first commercial oil operation in Peru when, in 1914, the International Petroleum Co...
...greater autonomy for the provinces and municipalities...
...8 Frank, p 28...
...Instead of forming a mass political party which could speak to the aspirations of the emerging lower classes, the upper class relied on the military to maintain its power...
...See Gumersindo Martinez Amengual, "Still Poor, But Debts Have Been Tripled," Panorama Economico Latinoamericano (No...
...4 The Spanish aristocracy was urban-centered from the beginning, Lima being the headquarters of the viceroy for the whole South American Pacific coast...
...2 For Peruvian history, the crucial question is who controls and therefore benefits from the economy's rising production...
...The party's high command repudiated their revolt but the military seized upon the crisis to once again take over the government and outlaw the Party...
...13 But despite their diversification, the upper class did not emerge as a cohesive, aggressive national bourgeoisie...
...For example, the government launched the first systematic irrigation plans, reinforcing the trend toward monopolization...
...II, No...
...Susanne Bodenheimer and Alex Georgiadis, "Peru: The Foreign Managers," Leviathan (July/August, 1969) pp 41-45, and several articles in Presena Latina, Panorama Economico Latinoamericano...
...Peruvians in Lima were quickly surrounded by US-made consumer products, including milk, bread, clothing, consmetics and soap, pharmaceuticals, TABLE NO...
...The current situation in Peru remains an enigma without a historical-theoretical framework in which to interpret its significance...
...They made it clear by the coup that they would no longer passively stand by while the country deteriorated and headed for revolution...
...Peru being the stronghold of Spanish military power on the continent, it took a force organized by the aristocracies of former Spanish colonies sailing from Valparaiso (Chile) to defeat the colonial army...
...The direct dependence on the military, which was due to the upper class' economic weakness, stunted the growth of a viable political party system...
...The basis of the military - upper class alliance was rooted in the growth of the agricultural economy...
...See also Carlos Malpica, Los Duefios del Peru (Lima: Fondo de Cultura Popular, no date).10 13 Larson and Bergman (p 266) cite another study which defines the upper-class core as the 45 families or corporate entities represented on the SNA board: 56 percent are important shareholders in banks and financial companies, 53 percent in insurance companies...
...BOURCB: For all countries: "National Accounts of Peru, 150-165," Central Reserve Bank of Peru, 19S...
...Capital Penetration by the United States Following in the footsteps of Britain, whose empire was now on the decline, US capitalists began to invest in Peruvian export industries...
...With the party outlawed and harassed, APRA and the military remained bitter enemies...
...5 Guano and nitrates are two natural fertilizers utilized in Europe for the cultivation of crops after 1840...
...The same economic sectors that received massive dosages of US capital grew during this period, while other sectors stagnated...
...15 Hence, Peru's wealthy families served more as agents for foreign capital penetration rather than agents for domestic development...
...The political ascendency of the landowning upper class coincided with the beginning of the coastal region's modern economic development...
...19~-7Finally, and most fatally, the upper class' origins in the export market defined its interests and growth in terms of an export economy...
...in turn, the power of the upper class is inversely related to the strength of foreign interests...
...In effect, the revolution for independence strengthened the aristocracy's control over the land rather than enabling it to emerge as a national bourgeoisie engaged primarily in industry and finance...
...New Jersey) -- stunned the business community and prompted Washington to consider applying the Hickenlooper amendment...
...But it was the western metropolitan center -- Britain -- which reaped the most rewards...
...easier credit...
...The upper class, lacking unity and unwilling to assume the responsibilities of governing, preferred to let the military men defend its interests...
...This is exactly what happened between 1948 and 1956 when Gen...
...6 Arnold Payne, The Peruvian Coup d'Etat of 1962: the Overthrow of Manuel Prado (Washington, D. C.: Institute for the Comparative Study of Political Systems, 1968), p. 3. 7 The US-owned Cerro de Pasco Copper Corp...
...Karen Spalding, "Peru: The Military Managers," Leviathan (July/August, 1969) pp 35-40...
...IPC) bought the British-owned La BreaParinas concession...
...After World War I, the main source of foreign capital for infrastructure development shifted from Britain to the United States...
...Actually, there is a fourth region, the Lima-Callao urban complex on the Coast, which serves as the satellite's metropolitan center, draining economic surplus from the other regions for its development and that of the metropolis...
...The army responded by slaughtering several thousand apristas...
...9 "I want to see the point of each bayonet red with aprista blood," was dictator Luis M. Sanchez Cerro's reaction to APRA's uprising in Trujillo...
...Applying a new technique for copper production using low-grade ores, the North Americans were able to raise copper exports significantly...
...Mining operations in the Sierra had the same effect...
...Capitalist agriculture, and the land concentration it demanded, proletarianized the peasantry and abolished or miniaturized the small holdings...
...an accelerated program of housing construction...
...Ceona Lewis, America's Stake in International Investments (Washington, D. C.: Brookings Institute, 1938) pp 213-214...
...br the United tate: 1S...
...Petroleum, on the other hand, lost ground...
...In 1956, profits were 9.9 percent on invested capital (including reinvested capital...
...17 A large portion of the middle sectors, whose members were increasing because of urban industrialization and service operations, were thoroughly disgusted with APRA's sellout...
...The main stimulus for this growth was the application of technology and the influx of foreign capital...
...They still pay homage to the slain officers and men once a year by making anti-aprista speeches...
...Water rights were taken over by the large landowners with the state's assistance...
...In the political arena, the country was ruled by a series of caudillos...
...2 PERU...
...See Larson and Bergman, p 265...
...If the ruling groups of the satellite countries have now and then found it in their interest to undertake a relatively greater degree of autonomous industrialization and development...
...The internal colonial system elevated Lima (and to a lesser extent other urban areas) to a higher economic level which facilitated the emergence of middle sectors (professionals, skilled laborers, petty bourgeoisie, intellectuals, students, etc...
...Table 1 shows that US direct investments soared from a low of $71 million in 1940 to $605 million in 1967...
...The Constitution stipulates that in such a situation Congress has the responsibility of electing the president...
...Much of the research was contributed by David L. Bayer, without whose assistance this paper could not have been written...
...They realized that an-8old-style corrupt military dictatorship (i.e., the continuation of the Odria regime) or the weak upper class in alliance with the opportunistic APRA leaders could not institute basic reforms...
...On the other hand, these leading families have invested some of their wealth in non-agricultural operations, thus taking on the semblance of a national bourgeoisie...
...The generals were particularly incensed by the wanton massacre of military prisoners held in the city garrison...
...7 Meanwhile, the coastal lands were cultivating the chief export commodities, sugar and cotton...
...The Comite de Productores de Azucar, composed of the 14 owners of the largest sugar mills, is also part of the core...
...In the 1931 presidential election, with Haya leading the ticket, this program was so successful in rallying popular support that the upper class thought it advisable to postpone the election and rig the final results...
...Thus the landowners had to rely heavily on the military's protection for their economic expansion...
...4 Peru is divided into three general regions: (1) a long Coast, mostly desert, cut by some 60 different rivers that form fertile valleys...
...56 percent have investments in commercial enterprises...
...The outright nationalization of the $208-million International Petroleum Co...
...Their surplus stolen for the last 400 years, the 12 million people of Peru find themselves confined within one of the most stratified and polarized social systems in the world...
...in 1960, this rate had gone up to 13 percent...
...218, 1967...
...APRA enlisted military elements for seven of its ten unsuccessful revolts during the 1930's and 1940's...
...10025 September, 1969-2~arplus drainage, moreover, determines the structure and function of Peruvian classes...
...In general, Belaunde's campaign programs were the ones he had meticulously outlined in La conquista del Peru por los peruanos: a preference for a mestizaje, or mixed, economy...
...6 Consolidation of the Ruling Class and the Military Alliance By 1895, the upper class emerged as a unified political force that seized power in a bloody popular uprising...
...From the years 1955 to 1965, US private concerns drained $532 million out of the Peruvian economy, of which $386 million (72.6 percent) was remitted to the United States and $138 million was reinvested...
...Thus General Odria (1948-56) dealt out arbitrary and often harsh treatment to influential members of the upper class who had originally supported his seizure of power...
...some were even from the radical left...
...It has done this in the past while retaining its basic cohesion...
...Previously,(from 1939 on) APRA's middle-class leadership, outlawed and denied access to legitimate power through violent repression, tried desperately to form an opportunistic alliance with the upper class...
...US capital, encouraged by the upper class, penetrated new enclaves on the coast and in the Sierra (by 1968 US capital controlled 80 percent of mining production), thereby extracting the greater part of the country's economic surplus and the lifeblood of a potentially viable national bourgeoisie...
...The younger officers had a full understanding of the Sierra's explosive conditions and absolute need for reform...
...8 In short, during wars and depressions, less economic surplus is expropriated from the satellites thus forcing the satellite upper class to channel its resources and.energies toward internal development...
...See Larson and Bergman, p 274...
...to this day the Selva remains relatively unpenetrated...
...and bribes encouraged Peruvian officials to ignore legalities applicable to foreigners...
...17 Looking at the same situation from the upper class' point of view, the alliance with the military was no longer in their best interest...
...But few reforms were instituted and APRA by this time had dropped its anti-capitalist rhetoric and radical goals...
...Independence, however, only encouraged the entrenchment of relationships established during the colonial period...
...Disgusted by Haya's maneuvering and willingness to be co-opted, left-wing party leaders, who insisted on remaining loyal to the original radical goals, attempted a military and civilian uprising in 1948...
...The officer corps, seeking a political role to insure its privileged position, maintained a strong alliance with the upper class, repeatedly intervening on its behalf until the 1950's...
...Both the richest guano and nitrate sources were lost...
...14 This does not mean, however, that the old wealth does not expand to absorb new business interests...
...Over the last four centuries, production in Peru has been largely controlled by developing capitalist societies of Western Europe and North America...
...1 The military's revolutionary reforms -- including a sweeping land reform law, reorganization of the State banking, tax and credit system, new irrigation rights law, trade with the Socialist world, and promise of universal suffrage -- won the praise of Premier Fidel Castro and the support of liberal bourgeois economists throughout Latin America...
...For a fuller explanation of the terminology used in this paper, especially "economic surplus," "underdevelopment," "satellite," "metropolis," "national bourgeoisie," see Andre Gunder Frank's book cited in footnote #3...
...The forty directors who are neither technicians nor advisors are connected with or represent 34 families and one foreign concern producing cotton and sugar...
...A Civil War between left and right erupted with the army favoring the latter...
...it was not because the essential structure of the world capitalist system had changed but only because the degree of their satellite dependence on the world metropolises had temporarily declined due to the uneven and war-torn historical development of the world capitalist system...
...These 34 families control 83 percent of the sugar production and 33 percent of the cotton, or 3.7 percent of the GNP, 15.2 percent of the total exports, and 21.1 percent of the nationally-controlled exports...
...Though this was a miniscule portion of the new commodities' great value, it was enough to induce the upper class to literally invite foreign interests to exploit their country's wealth...
...64 percent have large shares in industrial enterprises, 20 percent in mining concerns and 12 percent take part in petroleum enterprises...
...Table 2 also shows that since 1960, the proportion of profits remitted to the metropolis rose steadily, until 1965 when all profits were siphoned off to the metropolis and none were reinvested...
...To understand this phenomenon, it is necessary to investigate the nature of the middle sectors from which the APRA leadership came...
...10 The mining bonanza was largely stimulated by a new government mining code (promulgated by General Odria in 1950) that reduced taxes on profits and pledged not to raise them for 25 years...
...Concessions were granted for other areas in the Andes and by 1929 Peru was the largest South American producer of gold and silver (later, zinc and lead were also mined and exported...
...urvey of urrent Busin, August 16 11164...
...According to several studies, Peru's ruling class can in fact be narrowed down to approximately 40 leading families who are represented on the board of the Sociedad Nacional Agraria (SNA...
...Belaunde immediately charged that the election was a fraud and the military, supporting his claim, made it clear they would veto Haya's election in Congress (always maneuvering, Haya engineered a deal with his old-time arch-enemy Odria, offering his congressional votes in return for some choice rewards...
...1 More on the CLA...
...The instructors are largely civilians of liberal persuasion...
...17 NACLA NEWSLETTER NORTH AMERICAN CONGRESS ON LATIN AMERICA (NACLA) Vol...
...In short, the military's disaffection from the upper class - APRA status quo coalition, unexpressed during the Prado regime, now took definite shape...
...Thus, any attempt by the Peruvians to seize control of more of their economic surplus must be viewed from both a national and an international perspective...
...Part II of this article will deal with the economic and political events in Peru from Belaunde's regime up to the present...
...Yet its conservative ideology favored a laissez-faire attitude which inhibited the state from taking an active role in social and economic development...
...Other middle-class elements, "disaffected" from the system, looked to the lower classes as a potential base of power for challenging the established elites...
...Peru's disastrous war with Chile (1879-83) signalled the end of an era...
...III, No...
...Unfortunately, the available studies are written largely by partisans of this sellout tactic (e.g., Robert Alexander), which in effect destroyed the left until Castro came to power...
Vol. 3 • September 1969 • No. 5
