From Labor Action, Vol. 6 No. 32, 10 August 1942, p. 4.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
To the south of us lie the twenty-one Latin American nations sometimes politely referred to as republics. Our relation with these countries is, presumably, guided by the “Good Neighbor” policy and ten of them (Mexico being the largest and most important) have joined with the U.S. in declaring war against the Axis. Of the remaining eleven, all but two (Argentina and Chile) have broken off all relations with the Axis Powers and stand by the side of the big friendly brother of the North. The South American bloc is thus an important part of the United Nations and it is worth our while to see how things are going with the 100-odd million people “Down Mexico Way.”
All of the Latin American countries are poor agricultural areas depending upon whatever prosperity comes their way in the form of export and import trade. Each of them specializes in one or another product or raw material (coffee, sugar, bananas, cocoa, meat, etc.) which it sells to the world and the profits of which are used to buy manufactured goods. None of these countries has any real industrial development; all of them are (by comparison with America, England, Germany, etc.) primitive and backward – nations whose populations live at sub-standard levels of housing, clothing and food. The masses of Latin America are poverty-stricken workers and peasants.
When the war began Latin American trade with Europe (except England) was wiped out. This meant a drop of one-third in exports and resulted in a serious depression and great unemployment during the year 1940. Latin America simply lost its markets and, if the United States were to continue to hold these countries in line, it meant that the big imperialist neighbor from up North would have to replace the European customers;
This is exactly what has happened – to such an extent that Latin America is now experiencing somewhat of a business and trade boom, with big profits rolling in. America is now importing goods at the rate of $1,000,000,000 a year from South America – a rate DOUBLE that of 1939, a bad year. This has more than made up for the lost European trade. There is no doubt that 1942 will be the best year for Latin America since 1929 and that large favorable balances of trade (excess of exports over imports) will be rolled up by many Latin American republics: This new wave of prosperity has brought much joy to South American exporters, big cattlemen, bankers and the like. The flow of new American dollars from the Export-Import Bank (for the purpose of stimulating new industrial enterprises like Brazil’s first steel mill and rubber production in Bolivia, etc.) is also something quite welcome to the small but ambitious capitalist classes of the various South American nations.
But these obvious gains are bound to be short-lived and the dangers that accompany them are far more serious than the superficial advantages of the moment.
All in all, it is clear, that Latin American boom days are resting on a temporary, shaky and insubstantial basis. It is a pure speculation, resulting from the peculiar war conditions and does not represent any normal, healthy and rounded growth in the economic systems of these countries. On the contrary, it represents a special form of imperialist penetration by the grasping hand of “Yankee imperialism.” Instead of occupying the Latin American nations by force, we seize control of them with the American dollar by offering ourselves as the only possible customer and the only source of the small dole of manufactured products we are willing to hand out.
Next week we shall discuss American relations with Argentina – a subject that the American press is full of and which is of great importance since Argentina is the most powerful and important of all the Latin American nations.
Last updated: 31.12.2013