The 18th Brumaire of Juan Velasco Alvarado
Six days after the military sent Belafinde packing, they nationalized the $208 million IPC, stunning the business community and Washington. The company's oil fields were rather depleted, but the...
...Patterned on reforms advocated in the 1960s by Peru's Christian Democrats, they turned workers into minority shareholders...
...IBEC manager Robert Helander is also president of AMCHAM/Peru...
...no tears, no spontaneous marches from the shantytowns to the center of the city...
...By June 1969, following a series of private meetings between top government officials and managers of major U.S...
...Because the military was deeply suspicious of any real worker participation and unalterably opposed to the PCP's proposal for the creation of a mass political party in support of the regime, most of the attempts to orchestrate the "full participation" took a heavy-handed militaristic form...
...For other interpretations, see E.J...
...In short, after only six years the military regime was able to achieve--in a relatively nonviolent fashion--what the Mexican Revolution required 30 years to accomplish...
...modernized the Lima stock exchange S o h 10 NACLAReportNovlDec 1980 11 to make it accessible to a wider public and put the media - radio, TV and newspapers - under its control...
...The military had pondered these questions for years, most notably in the CAEM seminars, and had designed elaborate, if ultimately unworkable, solutions...
...Characteristic of Velasco's inability to win broad popular support, his fall from power elicited little emotion...
...SINAMOS incorporated eight different government agencies, was responsible for local public works and, depending on whether the Right or the Left controlled the local SINAMOS, was either a quasi-police agency which insured law and order, or an instrument to mobilize mass support for the regime's more radical measures...
...Drawing upon its traditional support within the Civil Guard, the national police force controlled by the Army, and playing upon rank-and-file grievances of the low-paid cops as well as their institutionalized enmity toward the regular Army, APRA stepped up its agitation...
...By nationalizing a Rockefeller subsidiary (Standard Oil of New Jersey's IPC), he put his regime on record as an anti-imperialist force--the leading edge of a new wave which would sweep out old U.S.Latin American relations...
...The PCP argued that even though Velasco had nationalized IPC and recognized the Soviet bloc nations, the government was anti-communist and repressive in its policies toward the working class and peasantry...
...Although there was no attempt to consolidate the pre-existing small holdings (minifundia), the reform actually affected about 47 % of the arable land in Peru before expropriations were halted in June 1976.2 Thoroughgoing as it was, the agrarian reform was but one of the critical reforms instituted by the military government...
...Government compensation facilitated Cerro's participation with ASARCO and other U.S...
...Second, employers suffering the most severe profit squeeze--generally national rather than foreign firms - attempted to violate the legal rights and benefits which unionized workers had won over the years...
...And, as we will see, the economic crisis which began in 1974, together with the exigencies of the International Monetary Fund austerity program, eventually meant lower real wages for workers and higher rates of unemployment...
...Mostly working class, the presumed benefactors of Velasco's programs were impassive...
...THE CORPORATIST CHALLENGE Given this record, it becomes tempting to dismiss calls for "full participation" as nothing more than populist rhetoric...
...240-302...
...Over the years, consortia of over 50 U.S., European and Japanese commercial banks and international agencies granted the regime loans so freely that by 1978 Peru's foreign debt topped the $8 billion mark, making Peru one of the highest per-capita debtors in the world...
...Middle-class support was, in effect, purchased through high rates of whitecollar employment and a substantial premium on white-collar wages...
...The struggle seems to be settled," Marx wrote, "in such a way that all classes, equally impotent and equally mute, fall on their knees before the rifle butt...
...That such a transformation was acceptable to international financial markets can hardly be denied...
...Its top leadership was vested in General Javier Tantalein Vanini, a close Velasco confidant and Minister of Fisheries, and its main organizational form was the Revolutionary Labor Movement (MLR...
...See also, Drassinower, Revoluci6n industrial (Lima: Studium, 1974), especially his speeches before CADE and the CAEM military institute...
...4 (July-August 1978), p. 5. 21...
...Unquestionably, the IMF played a decisive role in shaping Peruvian economic policy after 1977, but the crisis, and the government's attempts to deal with it, preceded the IMF's intervention by three full years 2 2 By 1974 government deficits and the foreign trade imbalance began to seriously affect the cost of living...
...The cabinet did not resign and there were few other immediate changes in the government...
...302-303...
...Further, Anlbal Quijano estimated that peasants who came under the agrarian reform would have to pay the state a total of 40 billion soles ($930 million) over the next 25 years, which the state would in turn pay as compensation to the landlords.' 7 The consistent anti-labor actions of the police and the Ministry of Labor throughout the Velasco period also reveal a great deal about the character of the military regime and its failure to generate a base of support among workers and peasants...
...The overall effect of this measure and similar 12 NACLA ReportNovlDec 1980 13 deals made with ITT, Chase Manhattan Bank and others was twofold...
...In October 1979, the government officially recognized a new union organized by Aprista scabs which promptly signed an agreement with Lolas...
...media spread fears of a "socialist" Peru and U.S...
...Havana Declaration, June 1975...
...One man grabbed me and hit me three or four times with a chain...
...and Nixon's special envoy to Peru...
...David Chaplin, ed., Peruvian Nationalism: A Corporatist Revolution (New Brunswick: Transaction, 1976...
...At the same time, foreign capital in unproductive or unprofitable areas of the economy was transferred to new areas where the long-term profit picture was brighter: mining, tourism, manufacturing and Amazon oil...
...Luls Banchero, the fishmeal magnate, and Samuel Drassinower, a major producer of appliances and motor vehicles, stepped forward as advocates of the government's programs...
...But not surprisingly, when Velasco tried to parlay this into increased popular backing by calling the government's first "mass meeting" on December 20, the populace failed to rally...
...3 (Summer 1977), p. 146...
...On February 3, 1975, almost unnoticed by the public, the cops began to disappear from the street corners in the capital...
...A 1975 Havana declaration of Latin America's Communist parties endorsed the PCP's position and noted: "We Communists are willing to support and push forward these positions of Latin American governments which may constitute a defense of our natural resources or the attempts to put an end to the efforts of transnational corporations to maintain and increasingly extend control over our economies...
...Then a large number of women were laid off on November 7, 1977, with Lolas assuring them that they would be on a temporary one-month leave...
...The following day traffic was snarled, but the newspapers had been instructed to publish nothing...
...Why...
...Peru's gross domestic product grew at a respectable 5.5% yearly between 1969- 73...
...See Table 4) The pending crisis was actually triggered by the failure of the fishmeal industry (which was nationalized in 1973 to stem a wave of bankruptcies) and the drop in world commodity prices of 1974-75...
...VR encouraged peasants to welcome government promises but organized them to fight independently when the contradictions of the reform programs emerged...
...Asunci6n Sotomayor, a native of Cuzco and mother of six, was one of those who fought the attackers on September 19...
...While some of the left groups tended to use the characterization "fascist" primarily as a denunciation, the Peruvian military regime did indeed spawn a significant neo-fascist tendency led by government figures with close ties to APRA...
...6 Yet none of the myriad interpretations seems to capture the essential contradictory character of the Peruvian military government, a regime which both repressed the working class and instituted fundamental reforms which profoundly challenged the country's oligarchy...
...Los Angeles Times, April 21, 1976, and Wall Street Journal, March 16, 1976...
...New laws encouraged the importation of machinery and intermediate goods and offered substantial subsidies for the export of "non-traditional" manufactured goods...
...The owner's troops recaptured the Textiles Populares' portion of the factory, but the women held on in the wing which had been stripped of machinery...
...Yet even the farmworkers and peasants who benefitted most dir...
...Fitzgerald, The State andEconomic Devlopment...
...subsidiaries, Cortina happily reported that, "the results have been very satisfactory," and acknowledged privately that David Rockefeller had personally thanked him for "saving" Peru.' Interviews with a number of the U.S...
...The conception advanced here is that the Peruvian regime was "Bonapartist" in the sense described by Karl Marx in his classic work, The 18th Brumaire of Louis Bonaparte...
...They felt that the reforms had gone far enough, that the regime should back off its radical rhetoric before popular expectations got completely out of hand...
...Profits made a strong recovery from the Belafinde recession (see Table 3), and official unemployment rates showed some decrease...
...Several hundred women constituted themselves the general assembly of a reorganized union and voted to seize the factory that day...
...And, though the now seriously ill Velasco moved to the right, conservative and even some radical tendencies within the military concurred on the need to remove him from the presidency and replace him with General Francisco Morales Bermidez...
...7. Karl Marx, The 18th Brumaire of Louis Bonaparte (New York: International Publishers, 1975), p. 121...
...SINAMOS was complemented by a progovernment peasants' confederation (CNA), organized around middle peasants and beneficiaries of the agrarian reform, and the Confederation of Workers of the Peruvian Revolution (CTRP...
...VI, no...
...The majority of the workers at Lolas were women...
...By contrast, others on the Peruvian left, particularly those who adhered to a pro-China perspective, downplayed the significance of the reforms and dismissed the anti-imperialist rhetoric as a mere "cover" for a regime that was in fact the "direct agent" of imperialism...
...VELASCO'S DAYS ARE NUMBERED It was not long after the onset of the economic crisis in 1974 that divisions within the military regime crystallized, leading eventually to Velasco's ouster as custodian of the reform pro18 NACLA ReportNovlDec 1980 19 cess...
...Government employment shot up...
...By 1975, even the government's own CNA had begun to move leftward toward an eventual alliance with the clasista-led CCP...
...In fact, many owners of small and medium-sized factories became openly hostile, surprising a government whose subsidies enormously benefitted weaker competitors...
...5. Mirko Lauer, et~al., El reformismo burgubs (1968-1976)(Lima: Mosca Azul, 1978), p. 103...
...The economic and political question as to who would have to pay for the crisis was placed squarely before the government...
...model, stripping students and faculty of their traditional control over the institutions...
...This latter, plus its immediate expropriation of IPC, put the regime in Washington's doghouse and signalled a de facto aid embargo until 1971...
...brought the banking system under state control...
...Long-festering problems with foreign firms were resolved with political glory for the military regime and a minimum of pain for overseas shareholders...
...The preamble to the agrarian reform law explicitly defined the objectives of this process: "The Agrarian Reform should decisively contribute to the formation of a wide market and provide the necessary capital resources for a rapid industrialization of the country...
...The PCP-controlled CGTP, still not officially recognized by the Ministry of Labor, continued to demand a 50% wage hike for all workers...
...ectly from the agrarian reform generally failed to rally in support of the Velasco government...
...government for distribution to the 11 U.S...
...But leftists denounced SINAMOS' attempts to manipulate and organize the people independently of them...
...took control of major natural resource exports...
...Every time we went to the CGTP for help in our struggle," said one Lolas union leader, "the answer was no...
...2.Jost Maria Caballero, "Sobre el carcter de la reforma agraria peruana," Latin American Perspectives, Vol...
...Gunilla Berglund, "Peru- Women Textile Workers Occupy Factory," Intercontinental Press, December 1978, p. 1400...
...managers in Peru revealed that many considered the Peruvian reforms to be the coming norm for business operations in the third world, and were quite hopeful of their profit prospects in Peru in particular.' 6 THE POPULAR RESPONSE Government leaders never tired of proclaiming that the Revolutionary Government of the Armed Forces would replace the "oligarchic country" with "a pluralistic and humanistic society, neither capitalist nor communist, based on social democracy of full participation...
...In addition, they established investment priorities and tax incentives for industrial development...
...Initially, the emphasis on industrialization was remarkably successful...
...For a first-hand account of this period in the CTRP and a revealing confession by a MLR leader, see Marka, October 10 and 16, 1975...
...There has been a temptation in some recent literature on Peru to attribute the devastating reduction in the workers' standard of living simply to the harsh policies of the International Monetary Fund (IMF...
...Some industrialists even criticized the agrarian reform, arguing that it should only have been directed at feudal estates, not modern capital-intensive enterprises which were already producing efficiently for domestic or foreign markets...
...The agreement was negotiated by James R. Greene, a vice president of Manufacturers Hanover Trust Co...
...Poland extended economic aid, the West European nations agreed to refinance Peru's foreign debt, and the U.S.-owned Southern Peru Copper Corporation announced that it would invest $335 million to develop the copper deposits at Cuajone...
...aries 87 92 95 100 92 88 77 67 54 53 52 nomic crisis...
...Petroperu, for example, operated at a huge deficit and built an expensive oil pipeline financed by future delivery of Amazon crude to Japan...
...In many cases, foreign subsidiaries operating in Peru were also able to profit from these reforms...
...4 In the field of international relations, Peru was the first South American country to recognize Cuba and break the U.S...
...As we have shown, the agrarian reform was far more significant for its ability to restructure and shape the Peruvian bourgeoisie than because it redistributed power or wealth to peasants...
...When they returned at the end of the month, the women found the factory closed...
...She recalled how she had tried to dissuade the attackers by appealing to their sense of justice: I talked to them about their mothers, why they were doing such a thing against us knowing that we were women and that we were fighting for the bread of our children...
...Throp and Bertram, Peru, 1890-1977, pp...
...and strikes by fishermen, bank employees, metalworkers and miners continued into the next year...
...See Table 3) Tax and tariff structures were also revamped to favor industry...
...Finally, the government itself sought to create industries based on local agricultural and mineral inputs, and spearheaded investment in areas it considered strategic--from steel to finance- using tax incentives, nationalizations and massive foreign indebtedness to achieve their goals...
...On November 4, 1968, one month after Belaunde's overthrow, the Peruvian Communist Party (PCP) announced it would not support the Velasco government...
...IN WHOSE INTEREST...
...8 As the CGTP organized its first mass meeting in Lima in April 1970 to support Velasco, 16,000 mineworkers at Cerro de Pasco were embroiled in a long and bitter strike...
...3 (July-August 1971...
...An English version is available through the Research Series of the Institute of International Studies, University of California, Berkeley...
...By 1980, however, foreign capital was thriving in Peru and international banks had become a major prop of the regime...
...took charge of developing heavy industry...
...8 The traditional oligarchy was likewise hard hit by the nationalization of a large part of the financial institutions and the military's takeover of nearly 70% of Peru's exports...
...Only five days earlier, police and landlords had attacked 200 peasant families in Cajamarca, killing seven and wounding 27...
...Thus, workers who had tried in vain for years to get their tiny unions recognized by the Ministry of Labor suddenly discovered that government approval was theirs within hours if they would affiliate with the CTRP...
...8. Colin Harding, "Land Reform and Social Conflict in Peru," in Lowenthal, ed., Peruvian Experiment, p. 220...
...Anti-Velasco industrialists also viewed state control of key industrial sectors as an unwarranted intrusion and worried that radical civilian advisors or popular pressure could push the military in a socialist direction...
...The new society, "neither communist nor capitalist," was to be a corporatist state capable of eliminating "destructive and alien" class consciousness without in any way eliminating classes...
...But in almost every case, the Left was able to muster sufficient forces to defeat Tantalein's gang...
...The Peruvian government's refusal to compensateJersey Standard for IPC's expropriation was, as the regime constantly emphasized, a special case...
...Peru's balance of payments, which had begun to turn negative in 1972, worsened severely over the following three years...
...Under the Agrarian Reform Law, bonds issued in compensation for expropriated lands could be redeemed if the holder invested them with additional capital in certain types of industrial development or mining...
...Velasco was elected honorary president of the Second Congress of Industrialists held in 1969, and a group of industrialists and financiers became closely associated with the regime...
...2 (January 1970), pp...
...it began to espouse antidependency, "Third Worldist" doctrines...
...in September, it deported the leadership of the striking schoolteachers...
...nationalized the fishmeal industry, two U.S...
...The loose ends of the nationalizations were tied up in 1974 when Peru agreed to pay $150 million (financed by a loan from U.S...
...VELASCO AND FOREIGN CAPITAL Velasco's entry into the world arena could not have been a splashier affair...
...The following account is based upon interviews with Lolas management in 1975 and with striking women inside the occupied factory in 1979...
...The name is taken from Louis Bonaparte, the man Victor Hugo dubbed "Napoleon the Little," who came to power in France in 1851...
...Yet, at the same time, the military suppressed strikes, closed leftist publications and deported trade union and leftist leaders...
...There can be little doubt that the most basic reforms of the military government hit hardest at the traditional oligarchy...
...An active labor movement fought for and won an improvement in real wages, which peaked in 1972-73...
...At one NovIDec 1980 1718 NACLA Report point the union de-affiliated from the garment federation in order to avoid paying dues that, the women complained, were used primarily to benefit less fortunate workers in smaller factories...
...The most notorious agency the military created for this purpose was the National System to Support Social Mobilization (SINAMOS), formed in 1971...
...Sharp struggle continued into the following year, a year in which the government finally officially recognized the CGTP...
...A second group of capitalists still had faith in the corporatist solution, and in the hope that General Javier Tantaleln and his MLR thugs could eliminate the radical left from their factories once and for all...
...He began cutting the payroll by eliminating higher-paid workers with seniority, also dodging their right to severance pay for each year worked at the firm...
...In contrast to the overthrow of Belafnde in 1968, when thousands of middle-class youths risked their lives in street protests, the people's silence was eloquent testimony to the gradual demise of this Bonapartist regime...
...An anti-government furor swept all of Peru's universities in February when the military decreed their reorganization on the U.S...
...Interview with Samuel Drassinower, Lima, Peru, 1975...
...It was particularly active among the police who direct traffic and patrol the streets of Lima...
...Just before dawn on February 5, tanks from the Armored Division attacked the largest police garrison where 2000 of the 7000 striking officers were massed, killing an unknown number...
...and in November government troops massacred striking miners at the U.S.-owned Cobriza mine...
...I yelled at him, 'Coward...
...As recession turned into depression during 1975-77, Pepe Lolas began to violate Peruvian laws protecting workers' rights in order to shift the full burden of the crisis on his labor force...
...Peru Since 1968 (Cambridge: Cambridge University Press., 1976) and "Peru: The Political Economy of an IntermediateRegime:'Journal ofLatinAmericanStudies, Vol...
...The MLR was also thrown out of the Marcona iron mines and the Chimbote steel works after the government-controlled press had hailed their "capture" by Tantalein's "revolutionaries...
...By contrast, in the first days of 1969, this same populace swelled a mass demonstration in Cuzco called by the CGTP against the government's repressive labor policies...
...rationalized taxes and tightened up tax collection...
...He treated his 1200 employees paternalistically: they called him "Pepe" and he insisted that they view him as just another hard-working soul like themselves...
...THE BATTLE HEATS UP This was more than Pepe Lolas could take...
...and adamantly defended the 200-mile fishing limit...
...To the amazement of nearly all observers, the government further demonstrated its weakness by withdrawing the Army into the barracks, leaving the city totally exposed to the mobs systematically incited by APRA forces...
...Coming from an Aprista family, he recognized that the regime was jeopardizing its corporatist goals by failing to develop a political organization able to influence and lead the masses against the communists...
...Such a strategy would have required a greater input of financial and political resources into the MLR, a strengthening of ties with APRA and the revitalization of the state-sponsored cooptation agencies like SINAMOS...
...The heavily-subsidized industrial sector was consuming massive amounts of foreign exchange which had to be paid for with traditional exports (copper, sugar, fishmeal) and foreign loans...
...Similarly, the government press published endless articles on Yugoslavian theories of worker control 14 NACLAReportNovlDec 1980 15 0; 0 -a FThe Association of Small Producers demonstrates in Cuzco against government policies, 1975...
...auto-gestion) and suggested that the so-called "social property sector" of the economy would soon be as important as the private sector...
...The women of Lolas received strong support from Church activists, but the CGTP to which they were affiliated frowned upon their militancy...
...More sophisticated military officers hoped SINAMOS could establish a Peronist-type base of worker and peasant support for the regime...
...But if the CGTP radicalizes and the [PCP] bureaucracy is thrown out, we'll become active members of the federation again...
...But by now Lolas had declared bankruptcy, and reorganized the factory under a new name, Textiles Populares...
...Consortia of foreign banks, led by Citibank, Bank of America and Chase Manhattan, financed the SPCC's Cuajone project and joined the World Bank in underwriting various development programs, swelling the foreign debt to $8 billion by 1978...
...Over the next several months they maintained a permanent occupation force and conducted vigorous street demonstrations in downtown Lima...
...thoroughgoing anti-communist, but he had less fear of entering mass struggles than did many of his colleagues...
...capital, U.S...
...It has frequently been suggested that the excessive NovlDec 1980 36 amount paid to Chase Manhattan Bank for its share of the Banco Continental (several times its book value) was a covert payment to Rockefeller interests on their IPC claims...
...Again the newspapers were silent...
...investors sought out leaders of the regime to discuss foreign capital's participation under the "new rules of the game...
...What had happened...
...An aspect of this fight was rank-and-file rebellion against union leadership which did not strongly defend their rights...
...For an overview of petroleum in Peru, see Bryan Cooper, ed., Latin America and Caribbean OilReport (London: Petroleum Economist, 1979) pp...
...The document argued that, "nationalism can be transformed into anti-imperialist and revolutionary positions to the extent that the people's forces decisively participate in the struggle...
...With the cabinet paralyzed by these divisions, APRA's conspirators seized their opportunity...
...Although the PCP did not explain this about-face at the time, its position of support for the military government was unambiguous, insuring, among other things, that the CGTP would avoid overt criticism of the government...
...A broad clasista movement began to build, particularly within the large metalworkers' federation of the CGTP...
...mining corporations (Cerro de Pasco Corp...
...As the pro-industrialist character of the regime became clear, the Left led farmworker protests against state pricing policies which undervalued their crops...
...CHARACTERIZING THE REGIME Understandably, the very characterization of the Peruvian military government was--and remains-- a topic of great contention...
...FROM CORPORATISM TO FASCISM The severest challenge to the Left did not come from SINAMOS...
...3. Nationalizations, as other economic reforms, were often carried out on an "ad hoc basis as short-run pressures pushed the Junta first in one direction, then in another...
...Some of our compafieros do not understand our situation and do not permit their wives to fulfill their responsibilities as workers...
...For example, when the agrarian reform bogged down, the revolutionary peasant organization (CCP) organized land invasions and championed the cause of small peasants and Indian communities excluded from the reforms' limited benefits...
...In this fashion, the Peruvian military regime would claim that it never paid compensation to the Rockefeller interests for IPC, although the U.S...
...In March 1971, the government arrested the leadership of the mineworkers' federation...
...In a midnight attack on September 19, several dozen hired goons stormed into the factory as police in patrol cars and tanquetas watched impassively...
...Lolas' owner, Jos6 "Pepe" Lolas Salom6n, was quite indebted to the military's reform programs, which had helped make his firm the largest underwear manufacturer in the Andean Common Market region...
...One group of industrialists and foreign firms turned to Velasco's Prime Minister, General Francisco Morales Bermidez...
...Finally, on August 29, 1978, a ruling was issued in favor of the persistent workers, ordering the factory to reopen and Pepe Lolas to pay the back wages...
...By mid-1975, the MLR was thoroughly discredited among most Peruvian workers...
...To underscore its assertion that Velasco's ouster did not signify a change in the regime, the military chose to act in August 1975, in the midst of a major meeting in Lima of non-aligned foreign ministers from throughout the third world...
...The Left handled these corporatist challenges with considerable skill...
...The afternoon after his dismissal was announced, a few hundred curious citizens and high school students gathered in front of the Presidential Palace...
...Only when these attacks had attracted tens of thousands of onlookers to the center of the city did Army tanks return to restore order, slaying at least 100 looters and bystanders in the process...
...The battle on the shop floor over who would bear the burden of the crisis was fought over two main issues...
...9. Fritz Wils, Los industriales, la industrializaci6n, y el estado nacidn en el Perfi (Lima: Pontifica Universidad Cat6lica del Peril, 1979), especiallypp...
...217-229...
...The only major element missing in Peru was the forging of a single corporatist political party which would cut across class lines, establish ideological hegemony and "institutionalize" the revolution...
...IV, no...
...Reflecting on their experience and the struggles of workers throughout Peru at the time, one Lolas worker remarked, "Things would be different if we workers had arms and if the Left were united...
...created a profit-sharing reinvestment system for workers...
...This massive foreign investment in a supposedly "revolutionary" regime was predicated on an expected handsome payoff from future export earnings...
...Banks in Peru," NACLA Report on the Americas, Vol...
...APRA, the Christian Democratic CTN, the PCP and clasista forces had all competed for leadership of the newly forged unions, as had the fishmeal factory owners through payoffs to some of the rank-and-file militants...
...The remaining women were evicted...
...But to do so would obscure a crucial political point...
...Entire new ministries and special agencies were created to oversee industrial development, expansion of tourism and the export of commodities...
...Among them is IBEC, a company owned by the Rockefeller family, with equity in or administration of some 20 firms in Peru...
...Hobsbawm, "Peru: The Peculiar Revolution," New York Review of Books, December 16, 1971, and Anfbal Quijano, "Nationalism and Capitalism in Peru: A Study in Neo-Imperialism," MonthlyReview, Vol...
...XII, no...
...Tantalein staffed his MLR with many of these corrupted union officials, along with some thugs he got on loan from APRA and lumpen recruits from Lima-Callao...
...the following day, 400 of the miners were attacked by police as they marched on Lima...
...The Cerro de Pasco deal, on the other hand, is more typical of the deals the government struck with foreign capital...
...It came from the emergence of a radical right movement, backed by a sector of the regime which surfaced in the factories...
...As cited in Julio Coder, "The New Mode of Political Domination in Peru," in Lowenthal, ed., Peruvian Experiment, p. 65...
...In mid-1969, despite a consistent pattern of labor repression, the PCP reversed its initial opposition to the regime, coincident with the onset of agrarian reform...
...We have to leave our homes, leave our little children alone, leave our responsibilities in the home," said Sotomayor...
...To carry out its program effectively, the regime had to forge some sort of mass base beyond the nationalistic middle sectors...
...Lolas also began to withhold wages until they were ten weeks in arrears...
...In fact, for a variety of reasons (often related to impending bankruptcies in the enterprises themselves), the state share in the modern sector rose to about 26% in the early 70s, from a pre-reform level of 11% .3 The regime passed a law allowing workers to set up and control their own factories...
...Something had to give...
...THE WOMEN OF LOLAS "Lolas" is an integrated textile and garment complex located in Lima's northern industrial zone, directly opposite some of the city's largest shantytowns which house the working class...
...Thousands of unemployed and lumpen elements poured out of the slums to loot much of the commercial downtown district while APRA agitators led well-coordinated assaults on selected government targets...
...John Weeks, "Crisis and Accumulation in the Peruvian Economy, 1967-1975,"Review ofRadical PohlticalEconomics, Vol...
...banks) for the assets of 11 U.S...
...But neither high productivity nor a passive union could insulate Lolas against the collapse of the consumer market...
...Officers of the American Chamber of Commerce (AMCHAM/Peru) and the Council for Latin America (CLA)* led the behind-the-scenes contacts...
...By this time I felt numb-- I did not even feel pain...
...The CTRP could only start to build its base among unorganized workers in small factories...
...Bonapartism refers to a particular form of dictatorship which has the appearance of eliminating the political power of all classes, including the bourgeoisie...
...4. Abraham F. Lowenthal, "Peru's Ambiguous Revolution," in Lowenthal, ed., Peruvian Expenment, pp...
...Finally, a third group emerged, composed of civilian radicals, the Peruvian Communist Party and the more nationalistic army officers...
...The government thereby provided a substantial wage subsidy to private industrialists, allowing them to extend investments and reap larger profits...
...For the next nine months the class consciousness of the women grew as they carried their documents and protests through the tortuous bureaucratic maze of the Ministry of Labor, that particular Peruvian graveyard for workers' rights...
...Forexample, Standard Oil of Calfornia's Conchan oil refinery was nationalized because it had been jointly owned with the Prado family whose entire financial/industrial conglomerate had to be assumed by the state to prevent bankruptcy...
...See Thorp and Bertram, Peru, 1890-1977, p. 416...
...Headed by David Rockefeller, the CLA, currently called the Council of the Americas...
...The women fought for three hours...
...This book is an in-depth debate among various leftist tendencies about the character and historical importance of the Velasco regime...
...7 Because the solutions are imposed, often side by side with certain popular reforms, it can be difficult in the short run to determine which class or class sector is benefitting in a structural way...
...2 3 His political outlook matched that of the top military brass: pragmatic and "progressive" in public, vehemently anti-communist in private...
...THE EIGHTEENTH BRUMAIRE OF JUAN VELASCO ALVARADO 1. Mimeographed translation by the Peruvian Times (Lima), no date...
...Lolas was a remarkably productive enterprise by Peruvian standards...
...represents the 200 largest firms operating in the continent...
...Opening the doors to a wing of the factory, the women discovered that many machines were gone--distributed to individual garment sewers who did home-work on a piece-work basis -while the "new" company functioned in another section...
...While there is more than a little debate as to whether any government can ever achieve this goal, many of the military regime's measures - such as the agrarian reform-did appear to favor workers and peasants...
...This was all the more critical since their programs were designed to push forward industrialization and proletarianization of Peruvian society, and would invite even sharper class conflict in the long run...
...The regime's overall objective between 1968 and 1975 was to strengthen the industrial sector NovlDec 1980 1112 NACLA Report of the economy.' Not only were domestic agricultural prices kept low, but the regime also absorbed part of the cost of the increasing volumes of imported vegetable oil, rice and other basic foodstuffs, as well as kerosene (used as cooking fuel) and gasoline for urban transport...
...The "industrial communities," for example, were aimed expressly at weakening labor unions...
...Like most Peruvian officers, Tantalein was a NovlDec 1980 1516 NACLA Report Table 3 NATIONAL INCOME IN PERU 1968-1978 (percent of total) Ratio of Profits to Wages Wages Profits and Salaries and Salaries Year 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 15.5 16.9 19.8 18.3 17.5 22.3 23.6 22.6 23.9 24.7 26.7 49.5 48.7 46.7 49.5 51.2 48.9 47.0 47.5 46.9 46.6 44.2 31.3 34.6 42.3 37.0 34.1 45.6 47.6 47.6 51.0 53.0 60.3 Source: Banco Central de Reserva del Peru, Memoria for 1971, 1973 and 1978...
...In short, the government was pursuing a decisive and strategic program of reforms in the interest of a modernizing sector of the capitalist class while at the same time alienating many of its individual members...
...Quoted in "The People React--the Government Represses," a pamphlet distributed by Peru Solidarity, PO Box 3580, Grand Central Station, New York, NY 10017...
...Then the management staged another armed attack, this time with police support, on the occupied portion of the factory...
...The dramatic struggle at the Manufacturas Lolas factory was illustrative of this process...
...A Bonapartist regime is the product of a political/economic crisis in which powerful interests are so deeply and evenly divided that parliamentary struggle cannot resolve their fundamental conflicts...
...Fifty-two workers were injured, some seriously...
...REFORMISM BECOMES A LUXURY The military reform programs required massive state expenditures and heavy foreign borrowing...
...Barbara Stallings, "Privatization and the Public Debt: U.S...
...4 While the U.S...
...MiamiHerald, Feb...
...It was Peru's boom industry of the 1950s and 60s, drawing thousands of peasants down from sierra villages to dozens of small port towns where the work and pay was irregular and living conditions abominable...
...The balance of forces within the regime shifted rapidly away from the radicalism of the earlier years...
...Industrialists were able to utilize existing capacity more efficiently than during the Belafnde years, and industrial production increased by a hefty 7.1% a year...
...The police were on strike...
...Data for 1975-1978 is based on preliminary estimates...
...Drassinower, the most vocal in his support of the regime's policies, took credit for personally co-authoring the industrial community laws...
...economic blockade of the island...
...On this question, see Stallings, "Privatization...
...On March 3, 100 wives of mineworkers from Mala began a hunger strike...
...The representative of CLA in Lima was Humberto Cortina, a Cuban-born veteran of the Bay of Pigs invasion...
...Velasco greeted the delegates in the inaugural session and Morales Bermiidez gave the closing address four days later...
...The largest number of women sat at industrial sewing machines, working quickly on a particular section of each garment in assembly-line fashion...
...In part this meant redistributing the oligarchy's landholdings to peasants organized into capitalist cooperatives so as to increase and cheapen basic food production...
...Grace, StarKist Foods, Gold Kist, and Cargill...
...Philip, Rise and Fall, p. 1 2 5 . 12...
...2 0 But all of this was accomplished via a process that put Peru on the verge of a devastating eco16 NAC LA ReportNovI Dec1980 17 1970 1971 1972 1973 1974 1975 1976 1977 Table 4 INDEX OF REAL WAGES AND SALARIES IN METROPOLITAN LIMA 1970-1980 (Index: 1973= 100) Wages Sal 76 84 92 100 97 90 98 77 1978 69 1979 71 1980 Uune) 76 Source: Actualidad Econ6mca (May 1980), p. 10...
...and Marcona), as well as most utilities, the railroads and airlines, and a number of smaller industrial sectors...
...316-17...
...Most important of these reforms was the agrarian reform program initiated in 1969, on which basis the military expropriated most of the feudal landlords, transferred the economic base of traditional agrarian capital to state control, and reoriented credit toward industrial development...
...E.V.K...
...By the end of July 1974, approximately five million hectares of land had been expropriated and reallocated to nearly 200,000 families...
...20, 1974...
...Bermfidez was particularly attractive since, as minister of finance in the Belafinde government, he had developed a reputation as a fiscal conservative, was untouched by corruption and did not represent too sharp a swing to the radical right...
...The government and industrialists like Drassinower hoped that workers would not strike or make unreasonable salary demands against "their own interests...
...Velasco's prestige was dealt a fatal blow...
...partners in the expansion of more profitable open-pit copper mines at Cuajone and Toquepala through the jointly-owned Southern Peru Copper Corporation (SPCC...
...This group wished to push the government's reforms forward even if it meant that profits would be jeopardized during the crisis...
...For a few pennies you come here to hit women' 'Shut up,' he said to me, 'you're nothing but a lousy communists' 2 4 As the months of occupation dragged on, some women became demoralized or were forced by their husbands to abandon the struggle...
...Senators sought to punish the regime for its treatment of U.S...
...Unwilling to permit the direct establishment of a mass political party, the military cabinet nevertheless allowed Tantalein to use his Fisheries Ministry as a base to develop a "non-official" organization that might win control of the unruly labor movement...
...Further theories abounded...
...4 (Winter 1976), pp...
...Because this lack of support contradicts the view of the regime transmitted abroad by a world press fascinated with such a radical departure from past military dictatorships, it is important to examine the Velasco government's handling of labor struggles in NovlDec 1980 1314 NACLA Report some detail...
...Rent, interest and income of independents not shown...
...It called for a $76 million payment to the U.S...
...VIII, no...
...Council for Latin America, Report, Vol...
...firms expropriated over the previous five years...
...immediately paid Jersey Standard $22 million, "with the tacit consent of the Peruvians...
...Moreover, they saw in the military's attempts to build a political support movement proof that the regime was "fascist...
...These authorized the establishment of "communities" in which workers were given the right to share in the profits and management of the companies 0 Not all industrialists favored the military regime's approach...
...23, no...
...6. See Einaudi and Stepan, ChangingMilitary Perspecties...
...With this base in a major federation, the MLR seized leadership of the government's CTRP and then began in 1974 to turn its fury against the clasizta-led unions in Lima' 9 Volkswagen and other auto plants were the sites of some of the fascist MLR's fiercest armed attacks on the clasista fank-and-file...
...23...
...Conveyor belts and supervisors with stop watches helped keep the women sewing without pauses...
...The company's oil fields were rather depleted, but the military used their seizure to harness broad civilian support for the structural reforms launched during the next five years...
...Interviews with management of Peruvian subsidiaries of Coca-Cola, Sean, J. Walter Thompson, McCann-Erickson, IBEC, Gillet, Johnson &Johnson and Chrysler...
...The impasse is broken by a military coup which closes the parliament and proceeds to impose solutions independently of the bourgeoisie, but always ultimately in the interest of a particular sector of that class...
...The Lolas union was nominally affiliated with the PCP-led CGTP, but its officers were cozy with Pepe Lolas and helped foster an economist mentality among the workers...
...53-71...
...The form of government adopted by the military led some to conclude that the generals ruled Peru as an independent progressive agent, "above" class interests, This, for example, came to be the position of the Peruvian Communist Party (PCP).S Failing to search for the class character of the regime, the PCP was able to construct a rationale for lending it virtually uncritical support...
...This organization is an excellent source of information on current struggles in Peru...
...Furthermore, never in the history of Latin America had a military regime carried out such a farreaching program against the will of a prevailing oligarchy...
...VIII (May 1976), pp...
...The problem of an appropriate political response to the economic crisis split the armed forces, and particularly the Army, into three camps...
...Gangs of MLR goons stormed the offices of the fishermen's unions and held impromptu "elections...
...They looked to the social-democratic former head of SINAMOS, General Leonidas Rodriguez Figueroa, as their strongest hope, since he now commanded the Lima military region and its Armored Division, based within a mile of the Presidential Palace...
...No one raised any chants, no shouts of "Viva 'El Chino' Velasco...
...companies and a direct payment of $74 million to five of the companies (Cerro de Pasco, W.R...
...AMCHAM PERU (Lima), April 1970, p. 3. 16...
...First, there was a continuous and ever more bitter struggle by workers to keep their wages on par with inflation, which, in 1974, had increased to 17...
...In undermining the traditional agrarian sector, the military regime hoped to facilitate the shift of capital into industry...
...THE INDUSTRIALISTS RESPOND Many of Peru's industrial leaders initially welcomed the military's leap into the fray, giving their support to the agrarian reform program and other structural changes proposed by the new government...
...This U.S.-based firm, which operated an antiquated underground copper mining complex and smelter in Peru, was nationalized in 1974 with the parent firm's approval and cooperation...
...Raw cotton entered the rear door and was processed, spun, woven or knit, dyed and cut right on the premises...
...56-72, and Thorp and Bertram, Peru: 1890-1977, pp...
...The workers who labored in the relatively new fishmeal industry were a perfect target for Tantalein...
...And even the most sympathetic industrialists felt threatened by the "industrial community" concept of worker profit-sharing and comanagement...
...In December, the military received its first tangible support from abroad...
...Under the "Peruvian model," foreign firms receive no concession of property or sub-soil ownership, but rather contract with PETRO PERU to explore and develop an area in return for a share of the crude...
Vol. 14 • November 1980 • No. 6
