Year 501 (32 page)

A few years later, the bubble burst. Brazil was swept up in the global economic crisis of the ‘80s, particularly ruinous in Africa and Latin America. Terms of trade now rapidly declined, eliminating this crutch for those who held the purse strings and the whip. Inflation and debt raced out of control, income levels dropped substantially, many firms faced bankruptcy, and idle capacity reached 50 percent, “giving a new meaning to ‘stagflation',” Skidmore observes. Delfim's neoliberal growth strategy was in “total collapse,” he adds. After 4 years of severe economic decline, the economy began to recover, in large part thanks to the import-substituting industrialization decried by neoliberal economic doctrine. The Generals bowed out, leaving a civilian government to administer the economic and social wreckage.

5. “A Real American Success Story”

Writing in 1989, Gerald Haines describes the results of more than four decades of US dominance and tutelage as “a real American success story.” “America's Brazilian policies were enormously successful,” bringing about “impressive economic growth based solidly on capitalism.” As for political success, as early as September 1945, when the “testing area” had barely been opened for experiment, Ambassador Berle wrote that “every Brazilian now has available to himself all of the resources available to any American during a political campaign: he can make a speech, hire a hall, circulate a petition, run a newspaper, post handbills, organize a parade, solicit support, get radio time, form committees, organize a political party, and otherwise make any peaceable bid for the suffrage and support of his countrymen”—just like “any American.” We're all equal, one happy family in harmony, which is why government is so responsive to the needs of the people. And so “democratic”—in the doctrinally approved sense of the term, referring to unquestioned business rule.

This triumph of capitalist democracy stands in dramatic contrast to the failures of Communism, though admittedly the comparison is unfair—to the Communists, who had nothing remotely like the favorable conditions of this “testing area” for capitalism, with its huge resources, no foreign enemies, free access to international capital and aid, and benevolent US guidance for half a century. And the success is real. From the early years, US investments and profits boomed as “Washington intensified Brazil's financial dependence on the United States, influenced its government's decisions affecting the allocation of resources, and nudged Brazil into the U.S.-dominated trading system,” Haines writes.

Within Brazil, the “modern scientific methods of development based solidly on capitalism” also brought great benefits, though to understand them, a bit more precision is necessary. There are two very different Brazils, Peter Evans wrote as the miracle peaked in the 1970s: “the fundamental conflict in Brazil is between the 1, or perhaps 5, percent of the population that comprises the elite and the 80 percent that has been left out of the ‘Brazilian model' of development.” The first Brazil, modern and westernized, has benefited greatly from the success story of capitalism. The second is sunk in the deepest misery. For three-quarters of the population of this “mighty realm of limitless potentialities,” the conditions of Eastern Europe are dreams beyond reach, another triumph of the Free World.

The “real American success story” was spelled out in a 1986 study commissioned by the new civilian government. It presented “a by-now familiar picture of Brazil,” Skidmore observes: “although boasting the eighth largest economy in the Western world, Brazil fell into the same category as the less developed African or Asian countries when it came to social welfare indices”; this was the result of “two decades of a free hand for the technocrats” and the approved neoliberal doctrines, which “increased the cake” while leaving “one of the most unequal income distributions in the world” and “appalling deficiencies” in health and welfare generally. A UN
Report on Human Development
(measuring education, health, etc.) ranked Brazil in 80th place, near Albania, Paraguay, and Thailand. Shortly after, in October 1990, the UN Food and Agriculture Organization (FAO) announced that more than 40 percent of the population (almost 53 million people) are hungry. The Brazilian Health Ministry estimates that hundreds of thousands of children die of hunger every year. Brazil's educational system ranks above only Guinea-Bissau and Bangladesh, according to 1990 UNESCO data.
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The “success story” is summarized in a May 1992 Americas Watch report: “Rich in natural resources and with a large industrial base, the country has the largest debt in the developing world and an economy that is entering its second decade of acute crisis. Tragically, Brazil is not able to provide an adequate standard of living for its 148 million people, two-thirds of whom were malnourished in 1985, their misery caused and compounded by lack of access to the land” in a country with “one of the highest degrees of concentration of land ownership in the world,” and one of the most lopsided distributions of income as well.

Starvation and disease are rampant, along with slave labor by contract workers who are brutally treated or simply murdered if they seek to escape before working off their debts. In one of the nine cases of rural slavery unearthed by the Catholic Church Land Ministry Commission in the first few months of 1992, 4000 slave workers were found extracting charcoal in an agribusiness project established and subsidized by the military government as a “reforestation project” (of which nothing operates but the charcoal pits). In haciendas, slave laborers work 16 hours a day without pay and are frequently beaten and tortured, sometimes murdered, with almost complete impunity. Almost half the farmland is owned by 1 percent of farmers; government emphasis on export crops, following the precepts of the foreign masters, favors farmers with capital to invest, marginalizing the huge majority even further. In the north and northeast, rich landowners call in gunmen or the military police to burn houses and crops, shoot livestock, murder unionists, priests, nuns or lawyers trying to defend peasant rights, and drive the villagers into shantytowns or to the Amazon, where they are then blamed for deforestation as they clear land in a desperate attempt to survive. Brazilian medical researchers describe the population of the region as a new subspecies: “Pygmies,” with 40 percent the brain capacity of humans—the result of severe malnutrition in a region with much fertile land, owned by large plantations that produce cash crops for export.
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Brazil is a world center of such triumphs as child slavery, with some 7 million children working as slaves and prostitutes, exploited, overworked, deprived of health and education, “or just deprived of their childhood,” an International Labor Organization study estimates. The luckier children can look forward to work for drug traffickers in exchange for glue to sniff to “make the hunger go away.” The figure worldwide is estimated at hundreds of millions, “one of the grimmer ironies of the age,” George Moffett comments. Had the grim result been found in Eastern Europe it would have been a proof of the bestiality of the Communist enemy; since it is the normal situation in Western domains, it is only irony, the result of “endemic third-world poverty...exacerbated as financially strapped governments have cut expenditures for education,” all with no cause.

Brazil also wins the prize for torture and murder of street children by the security forces—”a process of extermination of young people” according to the head of the Justice Department in Rio de Janeiro (Hélio Saboya), targeting the 7-8 million street children who “beg, steal, or sniff glue” and “for a few glorious moments forget who or where they are” (London
Guardian
correspondent Jan Rocha). In Rio, a congressional commission identified 15 death squads, most of them made up of police officers and financed by merchants. Bodies of children murdered by death squads are found outside metropolitan areas with their hands tied, showing signs of torture, riddled with bullet holes. Street girls are forced to work as prostitutes. The Legal Medical Institute recorded 427 children murdered in Rio alone in the first ten months of 1991, most by death squads. A Brazilian parliamentary study released in December 1991 reported that 7000 children had been killed in the past four years.
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Truly a tribute to our magnificence and the “modern scientific methods of development based solidly on capitalism” in a territory as much “worth exploitation” as any in the world.

We should not underestimate the scale of the achievement. It took real talent to create a nightmare in a country as favored and richly-endowed as Brazil. In the light of such triumphs, it is understandable that the ruling class of the new imperial age should be dedicated with such passion to helping others share the wonders, and that the ideological managers should celebrate the accomplishment with such enthusiasm and self-praise.

6. Fundamentalism Triumphant

One might object that despite its unusual advantages, Brazil is still not the optimal testing area to demonstrate the virtues of the neoliberal doctrines that “American-style capitalism” urges upon countries it deems “worth exploitation.” Perhaps it would be better to try Venezuela, even more favorable terrain with its extraordinary resources, including the richest petroleum reserves outside the Middle East. We might, then, have a look at that success story.

In a major scholarly study of US-Venezuelan relations, Stephen Rabe writes that after World War II, the US “actively supported the vicious and venal regime of Juan Vicente Gómez,” who opened the country wide to foreign exploitation. The State Department shelved the “Open Door” policy in the usual way, recognizing the possibility of “U.S. economic hegemony in Venezuela,” hence pressuring its government to bar British concessions (while continuing to demand—and secure—US oil rights in the Middle East, where the British and French were in the lead). By 1928, Venezuela had become the world's leading oil exporter, with US companies in charge. During World War II, the US agreed to a Venezuelan demand for 50-50 profit-sharing. The effect, as predicted, was a vast expansion of oil production and “substantial profits for the [US] oil industry,” which took control over the country's economy and “major economic decisions” in all areas. During the 1949-1958 dictatorship of the murderous thug Pérez Jiménez, “U.S. relations with Venezuela were harmonious and economically beneficial to U.S. businessmen”; torture, terror, and general repression passed without notice on the usual Cold War pretexts. In 1954, the dictator was awarded the Legion of Merit by President Eisenhower. The citation noted that “his wholesome policy in economic and financial matters has facilitated the expansion of foreign investment, his Administration thus contributing to the greater well-being of the country and the rapid development of its immense natural resources”—and, incidentally, huge profits for the US corporations that ran the country, including by then steel companies and others. About half of Standard Oil of New Jersey's profits came from its Venezuelan subsidiary, to cite just one example.

From World War II, in Venezuela the US followed the standard policy of taking total control of the military “to expand U.S. political and military influence in the Western Hemisphere and perhaps help keep the U.S. arms industry vigorous” (Rabe). As later explained by Kennedy's Ambassador Allan Stewart, “U.S.-oriented and anti-Communist armed forces are vital instruments to maintain our security interests.” He illustrated the point with the case of Cuba, where the “armed forces disintegrated” while elsewhere they “remained intact and able to defend themselves and others from Communists,” as demonstrated by the wave of National Security States that swept over the hemisphere. The Kennedy Administration increased its assistance to the Venezuelan security forces for “internal security and counterinsurgency operations against the political left,” Rabe comments, also assigning personnel to advise in combat operations, as in Vietnam. Stewart urged the government to “dramatize” its arrests of radicals, which would make a good impression in Washington as well as among Venezuelans (those who matter, that is).

In 1970, Venezuela lost its position as world's leading oil exporter to Saudi Arabia and Iran. As in the Middle East, Venezuela nationalized its oil (and iron ore) in a manner quite satisfactory to Washington and US investors, who “found a newly rich Venezuela hospitable,” Rabe writes, “one of the most unique markets in the world,” in the words of a Commerce Department official.
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The return to office of social democrat Carlos Andrés Pérez in 1988 aroused some concerns, but they dissipated as he launched an IMF-approved structural readjustment program, resolutely maintained despite thousands of protests, many violent, including one in February 1989 in which 300 people were killed by security forces in the capital city of Caracas.

Though rarely reported in the US, protests continued along with strike waves severe enough to lead to fear that the country was headed towards “anarchy.” Among other cases, three students were killed by police who attacked peaceful demonstrations in late November 1991; and two weeks later, police used tear gas to break up a peaceful march of 15,000 people in Caracas protesting Pérez's economic policies. In January 1992, the main trade union confederation predicted serious difficulties and conflicts as a result of the neoliberal programs, which had caused “massive impoverishment” including a 60 percent drop in workers' buying power in 3 years, while enriching financial groups and transnational corporations.
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