CHAPTER 1
UNITY IS STRENGHT
INTRODUCTION
This book has been produced in response to requests from trade unionists and others engaged in solidarity work with Latin America who felt that there was no adequate general survey of trade unions in Latin America to help them campaign within the British labour movement. In the future we hope to produce more detailed studies on unions in specific sectors but here the main aim is to explain why British workers should be concerned about the condition of the Latin American labour movement as a whole.
Why Latin America?
Why Latin America? It is, after all, thousands of miles away; it does not appear to suffer from starvation as badly as do the Horn of Africa, Kampuchea or the Indian subcontinent; there are no major wars nor well-publicised boatloads of refugees; and there are no obvious ties with Britain.
From time to time natural disasters, such as major earthquakes in Guatemala and Nicaragua, or events such as the Chilean coup or the World Cup in Argentina attract the interest of the media. But in general Latin America receives little attention and European workers are left with a vague and distorted picture. Not surprisingly, this lack of awareness has meant that, with the exception of Chile, there has been little interest in or action on Latin America. However, there are very good reasons why British trade unionists should show solidarity with Latin American workers.
Poverty
There is no doubt that workers and peasants in Latin America live in extreme poverty. Unemployment is chronic, wages are low and rates of inflation high. As a result malnutrition, high mortality rates, disease and all the features of severe impoverishment are widespread. Chapter One shows that natural causes have very little to do with this state of affairs. It is the direct result of a global economic system in which wealth and power have become increasingly concentrated in the hands of multinational corporations in alliance with local capitalists at the expense of working people. The social cost of this system is most acute in underdeveloped or neo-colonial countries but it is by no means confined to them. Workers in North America, Europe and Britain are exploited by the system too.
British Links
Multinational corporations exist precisely because capital must grow and move to wherever it can make the highest profits: production and investment are shifted to the neo-colonial countries where labour is cheap and often kept so at the point of a gun.
Many such corporations operate in Britain and a substantial number are based here. There are at least a hundred British firms in Brazil, half that number in both Argentina and Chile and many more throughout the rest of Latin America. These include major companies such as EMI, ICI, Brooke Bond, Dunlop, Lucas, BP, Pilkington, Rank Hovis MacDougall, Bowaters, Plessey and Lloyds. The number of companies based in Japan, Europe and the USA that operate in both Britain and Latin America is very much higher. Ford, for instance, which we associate with Dagenham and Halewood, has plants in Venezuela, Uruguay, Mexico, Brazil and Argentina. In these cases British and Latin American workers are struggling against the same employer. Furthermore, British economic links with Latin America are growing, particularly in manufacturing industry, the sector which affects workers here most directly.
Repression and Chile
In September 1979 some 5,000 people turned out on the TUC demonstration in London in solidarity with the Chilean people on the sixth anniversary of General Pinochet's extreme right wing coup. They were demanding that the Conservative government, despite its obvious sympathies with the policies of the Pinochet regime, should not send an ambassador back to Santiago because of continuing repression in Chile. Many British trade unionists have been asked in branch meetings to aid fellow workers in Chile and in many cases this has gone beyond donations and messages of support. It has also included the 'adoption' of political prisoners, assistance for refugees, blacking and boycotting of goods and even the sending of union delegations to Chile to investigate conditions there.
The violent overthrow of President Allende's democratically elected socialist government in 1973 and the brutality of the repression that followed made such an impact on the European working class that it responded in a way not seen since the Spanish Civil War. No class conscious worker could fail to see the significance of the Chilean tragedy in which thousands died in order that the interests of big business be restored.
Every day basic human, democratic and trade union rights are violated throughout Latin America on a massive scale — workers' organisations and progressive forces are under constant attack. The Chilean coup was not an isolated event but part of a continuing offensive against the working class which began in earnest with the military takeover in Brazil in 1964 and continued with coups in Bolivia (1971), Uruguay (1973) and Argentina (1976). Military regimes also still prevail in El Salvador, Guatemala, Honduras and Paraguay, and although the seven-year dictatorship in Bolivia was brought to an end with elections in 1978 the threat of another coup in that country remains strong.
A Tradition of Struggle
The present bitter struggle of the Latin American working class against dictatorship and exploitation is not new. Although the history of this struggle differs from that of the European or North American working class, the Latin American labour movement has a long tradition.
In Argentina, for example, the origins of trade unionism stretch back to the days of the British Chartists in the mid-19th century. By the turn of the century trade union organisations of some sort had been established in many countries and, as in Europe, the years following the Russian Revolution saw widespread militancy in Latin America and a spate of strikes in the more industrialised countries of the subcontinent. Thus, gains similar to those made by workers in Europe and North America were being fought for by workers in Latin America at the same time; most have still to be won. Part Two outlines the history of these struggles for each country.
International Organisation
The development of international trade union organisations has done little to remedy this state of affairs or provide the basis for authentic international union solidarity. In fact, in some cases these bodies actually serve the interests of the multinational corporations. The organisations are often in outright political conflict with one another and this has had particularly serious repercussions in Latin America.
The TUC plays an important role in the International Confederation of Free Trade Unions (ICFTU) and yet most workers in Britain are completely unaware of its existence, activities and record. Chapter Four looks at this important question which affects organised labour throughout the world.
Solidarity
Latin American workers are not just asking for sympathy but for class solidarity from their fellow workers in Britain and Europe. The low wages and oppression that Latin American workers suffer suit only the local entrepreneurs and multinational capital which readily takes jobs away from the highly unionised and much better paid workers of the industralised countries in order to make even greater profits. Workers in both Britain and Latin America are fighting exploitation and instances of collaboration in this joint struggle are becoming more frequent. Chapter Five considers the progress that has been made in developing union links and looks at the possibilities for further advance.
THE SYSTEM OF IMPOVERISHMENT
Latin America is rich in natural resources. It exports its minerals, foodstuffs and fuel to the 'advanced' nations, and some countries have undergone considerable industrial development. Nevertheless, Latin America remains undeniably 'underdeveloped' and most of its people continue to live an impoverished existence. At least half of the 330 million people that live in the subcontinent are considered by the UN to be destitute. Between 1960 and 1970 the poorest 40% of the population increased its annual income by only £10 per head. At the same time distribution of income has become increasingly one-sided — the rich have got richer and the poor have got poorer. For example, in Mexico the top 5% of income earners received 22 times as much as the bottom 10% in 1958 and 4 7 times as much in 1977.
Yet the US Department of Commerce reported that between 1950 and 1965 the flow of capital from Latin America to the United States was US $ 7.5 billions greater than the amount invested. British capital investment in this period was very much less but in 197 4 it still made a return of 20%.
The domination of the Latin American economies by foreign capital is nothing new; high rates of profit were being made by British, French, German and US firms and banks well before the 19th century was out. In Mexico in 1910, 76% of the major companies were controlled by foreign investors. Investment, primarily by the US, but increasingly by Japan and Europe as well, has continued to grow and increased profits and control have followed.
Latin American economies have been shaped to the needs of the imperialist powers from the 16th century onwards. From the time of their political independence early in the 19th century Latin American countries became increasingly dependent on the export of raw materials and on the foreign capital that was concentrated in this key sector. This necessarily involved a close alliance between national and international capital but gave the former very little freedom of movement and left the Latin American economies highly vulnerable to fluctuations in world prices for raw materials.
This position has changed very little — the supply of cheap raw materials and basic food-stuffs remains critical to the industrialised countries. In periods of disruption of the world economy, such as the Depression and the Second World War, most Latin American countries began to manufacture consumer goods on a limited scale in order to reduce imports. This process became more widespread in the 1950s and was seen as a way of reducing their dependence. The post-war period, however, saw another even more important development: the rapid expansion of the multinational corporation which, attracted by low labour costs and the existence of large potential markets, gradually took over existing or set up new manufacturing industries, particularly in the relatively more advanced Latin American countries: Brazil, Argentina and Mexico. In Brazil, for example, labour costs in automobile manufacture account for only 10-15% of total costs; in Britain the figure is 30-35%.
This tendency of multinationals to expand abroad is particularly clear in the case of British companies. In 1979 foreign-based production accounted for 36% of the total output of the top fifty UK enterprises. Moreover, it increased more rapidly than domestic production and is now three times greater than their exports from the UK. The labour force of these firms in the UK has fallen by 6.4% in the last five years, whilst overseas employment has risen by some 5.5%. Between 1970 and 1976 British investment in Latin America rose from £2.1 million to £130.6 million — an increase from 10% to 20% of total UK investment in developing countries.
Within Latin America the process of industrialisation is very uneven, but in the most advanced countries it has become increasingly significant. In 1965, industrial products accounted for 8% of Brazil's exports; in 1979 this figure had risen to 35%. Brazil is now the world's tenth largest exporter of cars. In Mexico between 1950 and 1976 the industrial labour force grew from 12% to 18% and the agricultural labour force dropped from 58% to 33%. In Argentina two million people work in industry and only three quarters of a million agriculture.
Multinational companies have also promoted the modernisation of agriculture in Latin America. On the face of it this would seem to be a positive step but, in practice, 'modernisation' means capitalisation which means production for profit and not need. Between 1964 and 197 4, per capita production of food crops for domestic consumption fell by 10% while production of export crops (cotton, coffee, sugar, soybean, sorghum, etc.) grew by 27%. The result is less food and land for the rural population. Between 1950 and 1975 the number of landless peasants in Mexico rose from 1 1/2 million to 5 million. In Brazil the increasing use of land for cultivation of soybeans for export meant a drastic reduction in land available to grow black beans, the staple food of the rural labour force, which as a result rose in price by 439% between 1974 and 1976. Every year half a million people flood into the city of Sao Paulo to escape poverty in the countryside.
Between 1960 and 1975, 33 leading US food processing companies made 335 new investments in the Third World, 80% of them in Latin America. A reflection of this is that between 1965 and 1975, the use of fertilizer in the subcontinent trebled and the purchase of tractors increased by 75%. However, in Guatemala 87% of agricultural credit goes into the production of export crops and only 3% on the subsistence crops of rice, com and beans; 81% of Guatemalan children suffer from malnutrition. Massey Ferguson entered Brazil in 1961 to produce tractors and was followed by Ford in 1974, but only the largest 2% of the country's five million farms possess both a tractor and a plough.
The effects of this mechanisation have been considerable. According to the ILO the current stock of tractors in Latin America displaces at least 2 1/2 million workers. It is primarily US banks and corporations that control credit and the marketing of fertilizer, tractors, soya, coffee and bananas, but they are by no means alone; Tate and Lyle, British American Tobacco and Brooke Bond Liebig have played a major part in the impoverishment of the rural population of Latin America.
The cost to the workers of this multinational-promoted growth is extraordinarily high; if it were otherwise the multinationals would not find it profitable to invest. Increasing industrialisation and input of capital tell one story, the high rates of profit and poor working conditions tell another.
Wages and Inflation
In Latin America, as in much of the underdeveloped or neocolonial world, the necessity of holding down labour costs and maintaining the freedom of capital has required the use of violence and the widespread establishment of military regimes. The result has been that while high levels of inflation have continued in Latin America the working class has been forced to suffer a large loss in earnings.
The assault on workers' living standards has been particularly acute in the countries ruled by military dictatorships. In Chile real wages have fallen by 40% since 1972; over 50% of the population depends on a family income of no more than £40 a month (the minimum wage) when, according to research by the unions, £112 is needed to provide the minimum requirements for the average family's healthy existence. Wages in Uruguay and Argentina have also plummeted and in Brazil workers have suffered a constant erosion of pay over the last decade. The official Brazilian system of linking the minimum wage to prices has not halted this as the figures have often been deliberately fixed or ignored by employers.
Even in countries without military regimes workers have suffered as a result of weak organisation, the strength of the large corporations, high unemployment, the antipathy of the state and the intervention of the police in disputes. In 1979, real wages in Mexico dropped for the third year running and in Colombia the 50% increase in the minimum urban wage was completely wiped out by price rises. The weekly earnings of a quarter of Colombia's working population are less than the price of a dozen eggs and a kilo of poultry. In 197 4 the Guatemalan labour minister openly admitted that 80% of all wages would not satisfy even minimum nutritional requirements.
