The New Bourgeoisie and the Limits of Dependency: Mining, Class, and Power in Revolutionary Peru

by David G. Becker

Overview

The author clarifies the mutually constructive relationship between transnational and the modernizing Peruvian state, showing how the state maintains this relationship while simultaneously nurturing the new class.

Originally published in 1983.

The Princeton Legacy Library uses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These editions preserve the original texts of these important books while presenting them in durable paperback and hardcover editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.

Product Details

ISBN-13:	9780691613420
Publisher:	Princeton University Press
Publication date:	07/14/2014
Series:	Princeton Legacy Library , #34
Pages:	450
Product dimensions:	6.90(w) x 10.00(h) x 1.00(d)

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The New Bourgeoisie and the Limits of Dependency

Mining, Class, and Power in "Revolutionary" Peru

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By David G. Becker

PRINCETON UNIVERSITY PRESS

Copyright © 1983 Princeton University Press
All rights reserved.
ISBN: 978-0-691-07645-4

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CHAPTER 1

Development, Class, and Dependency

This is a study of political power and social control in Peru. The much-discussed "revolution from above" imposed by the military from 1968 to 1980 forms the backdrop against which it is set. Its major aim is to show how the organization, distribution, and uses of power have been affected by the country's chief export industry, nonferrous metal mining. But that is not all. The industry produces for the international market and has long been shaped by direct foreign investment. Consequently, the study is also a vehicle for comprehending the nature and significance for national development of the interaction between external economic forces — transnational mining companies and the world metals market — and an industrializing Third World polity.

In recent years the field of development studies has been graced by a swelling output of scholarly works, many of them carefully researched and cogently argued, whose viewpoints have been influenced by dependency "theory," or dependencismo. Their authors persuasively press the core dependencista thesis: that the global interests of metropolitan capitalist classes have always determined development processes and power relationships in countries like Peru, to the clear detriment of these countries. Dependencismo, however, is much more than a telling critique of imperialist exploitation inflicted in the past upon the Third World by the developed nations. It indicts metropolitan capitalism for continuing its exogenous conditioning of Third World development, albeit in novel ways that depend less than formerly on the use of force. One such way, it is held, is the penetration of Third World societies by transnational firms and the resultant subjugation of the host countries' economies to metropolitan requirements. This is a grave accusation.

As Richard L. Sklar has observed, development has a political aspect: it is "the improvement of a society's ability to control the rate and direction of change. The concept of control is crucial to this definition, as it implies the ability to formulate and implement strategies for solving problems and achieving goals." If the dependencista indictment is upheld by the evidence, a transnational corporate presence in a key economic sector (e.g., Peru's mining industry) tends to deprive the host country of this vital control capability. At worst, development is rendered impossible, and one finds instead the "development of underdevelopment." At best, development can occur solely in a distorted form — Fernando Henrique Cardoso has coined the phrase, "associated-dependent development," to describe it — where the host country abandons its indigenous values and practices to acquire a second-rate version of metropolitan capitalism and where the benefits of "development" flow disproportionately to small, privileged elites affiliated with transnational enterprise.

There results, in other words, a new form of foreign domination that is subtler than the overt imperialism of previous epochs. The new dominators are no longer the military and administrative minions of a colonial power. Rather, dependency erodes national independence from within, by promoting a structure of preeminent socioeconomic interests inside the host society which responds preferentially to external demands. Dependency, as Cardoso writes, thus represents "a structural pattern of relations that 'internalize[s]' the external and create[s] a state which [is] formally sovereign and ready to be an answer to the interests of the 'nation,' but which [is] simultaneously and contradictorily the instrument of international economic domination."

The Issues at Stake

Issues of power and control are amenable to a class analysis. However, the analysis and supporting research must take into account the actual class formation processes and practices of present-day, semi-industrial Peruvian capitalism, rather than imposing a ready-made scheme of social relations derived from other epochs and national experiences. The current realities of Peruvian capitalism will be shown by this study to include: (1) the economic preeminence of the modern, oligopolistic business corporation which, like its developed-country counterparts, is largely self-financed out of retained earnings and is controlled by professional managers whose positions in the corporate hierarchy, and power, depend much more on expertise than on considerations of juridical ownership; (2) a state that not only provides welfare benefits and a degree of income redistribution but also engages directly in industrial development and capital accumulation as well as in macroeconomic planning and management; (3) the presence of a new leading element of the local bourgeoisie — the "new bourgeoisie" of managers and technical specialists — whose members are based in both the private and public sectors and which has evolved into an ever more significant socioeconomic and political force; (4) transformed middle classes, most of whose integrants now fill middle-level professional, technical, and supervisory-administrative posts — class positions likewise determined by expertise gained through education — and have come to perceive greater opportunities than before for promotion into the bourgeoisie proper; and (5) a modern-sector working class that is far more skilled and secure in its conditions of employment, far better organized, and far more active politically than was the case a decade or so ago.

The class analysis presented in this work will address the following questions: How has foreign investment in Peruvian mining affected class formation, class practices, and interclass relations? What kinds of relations does the "new bourgeoisie" maintain with other local bourgeois elements, with other classes, and with international capital? Are these sufficient to establish and maintain "new bourgeois" political dominance? If so, what form is that dominance apt to take, and why? Does the "new bourgeoisie" perceive a class interest in autonomous capitalist development in Peru under its aegis? Or are its international ties and concerns such that it uses its power to fortify foreign domination? Are the transformed middle classes sufficiently attracted by the upward mobility opportunities and other privileges available to them under the late-capitalist order that they will acquiesce in bourgeois sociopolitical hegemony? Or are they frustrated enough by "blocked ascent" and by an overweening foreign economic presence that they could be enlisted into a class alliance opposed to the existing system of domination? Is the modern-sector working class likely to use its relatively greater security and capabilities to become a leader, or a major component, of a radical socialist movement that could create serious problems for the capitalist status quo? Or do its members undergo a process of "embourgeoisement" in which they, too, become affiliated with a capitalist societal consensus in exchange for material benefits, some mobility chances, and a measure of political participation?

The state is the key institution through which political power is organized and social control exercised. Hence, no examination of power and control can afford to overlook the character of the state and its relationship to socioeconomic structures and institutions both local and external. Recent advances in the theory of the capitalist state make it impossible to go on treating the latter as either a monolithic "state-for-itself" or a mere executive committee of a dominant class. Rather, the state is "relatively autonomous," in the sense of possessing some initiative vis-à-vis the particular (especially short-run) interests of any private institution, class, or class stratum, and at the same time is itself an arena of class conflict whose actions manifestly affect class interests and power.

Inasmuch as the state is not a simple instrumentality of a "ruling" class, it is not enough to ask who controls the state and to whose benefit does it act. We must also inquire as to changes in the state's institutional capabilities for organizing and controlling both internal politics and external relations on behalf of a set of interests that it attempts to project ideologically as being the general interest of Peruvian society. Specifically, we must ask whether the transnational corporate presence results in a weakening or a strengthening of the state's control capabilities (including the will as well as the capacity to exert control) versus foreign and domestic forces.

Documenting the inequities of capitalist development in Peru will not be a major theme of this book, since that task has already been performed by others. It must not be forgotten, however, that capitalist development also produces counterforces, embodied in the subordinate but majoritarian classes of society, which are capable under certain conditions of exercising political power sufficient to impel the amelioration of some of the worst capitalist excesses. The appearance of these counterforces is another important part of the process of capitalist development in its political aspect. By examining their growth and effectiveness we may move beyond static description to embrace the issue of the immanent tendencies and probable future course of development in Peru.

Questions of popular power cannot be divorced from that of the internality or externality of political power. Now and for the foreseeable future, the political action of subordinate popular groups is and will be confined to the national stage. If, as dependencistas assert, the locus of power in less-developed societies like Peru's resides in the capitalist metropoli, then the popular sectors are excluded from the arena and have no possibility for successful political activity within its existing structures. If, on the contrary, the locus of power is internal, then the relevant arena is one in which the popular sectors do have at least a potential for political self-help. Thus, the pressing issue with regard to the lot of the majority faced with capitalist exploitation is not whether capitalism intrinsically improves it — to all events an improbability. It is, instead, whether the course of development bids fair to propitiate the formation of a local political arena in which an effective popular-class practice is feasible; of popular classes capable of such practice; and of a dominant class or class element capable of accommodating to it without a perceived surrender of fundamental interests.

In this context, liberty and democracy are of vital concern. Marxists used to argue that bourgeois liberal democracy was progressive. Political liberties, though limited in scope by the nature of civil society and by the doctrine of individualism, would provide many more opportunities for the popular classes to gain political awareness and strength than would authoritarian rule. But it has lately become fashionable in some Leftist quarters to deprecate both liberal democracy and the liberal conception of individual rights with the claim that these are empty ideological devices for disguising capitalism's unpleasantries. Yet, any real improvement in the quality of life of the people at large — the very definition of "development" — depends upon their own political efforts, not the altruism of those in power. These efforts include not only revolutionary ones but also (and often, simultaneously) those aimed at forcing an accommodation from the system of power. Both kinds of effort can succeed only if there is high social cohesion and political-organizational capability among the popular majority. Those are much more likely to arise and to flourish where there is some freedom of association and communication and where a modicum of political participation exists.

For these reasons I shall try to discern whether Peruvian processes of capitalist development may bring forth new near-term possibilities for liberal-democratic stability, or whether the more probable outcome is some variant of authoritarian political monopoly.

Dependency versus "Post-Dependency"

The issues raised above are not of a sort that can be elucidated using state-centered analytic frameworks. Of the available frameworks which partake of the dependency paradigm in greater or lesser degree, the one that is most plainly ruled out by this criterion is the world-system theory associated with the name of Immanuel Wallerstein. True, Wallerstein's framework links internal structures to external forces. It concentrates, however, upon explicating the relative positions of states within the "world-economy" according to the classification scheme, core-semiperiphery-periphery. For Wallerstein, a class analysis of "peripheral" societies is of secondary interest, since the class structures of those societies have already been specified from first principles once their "peripheral" status has been established.

What I take to be the main body of present-day dependencismo offers two principal strands of thought from which we may draw. The first is essentially institutional. It strives to demonstrate how and why transnational corporate interests in profit, market share, and managerial control make impossible a capitalist strategy of development that would advance the quality of life of the majority of the population or transform and modernize the economy as a whole. The problem with this approach is that it is quite easy to document the accuracy of the description; but it is exceedingly difficult at the institutional level of analysis to move beyond simple description in order to prove that what has occurred was inevitable and cannot be altered short of a drastic change in the system itself. Still, the study of institutional behavior is a necessary prelude to class analysis, for class interests and practices are most straightforwardly revealed in the character and conduct of institutions in which the various classes are involved. Key Peruvian mining-sector institutions are treated in this work. The treatment is empirical. It does not just confirm institutional forms and behaviors that have in reality been assumed a priori on the basis of "laws of motion of dependent capitalism."

The second strand consists in the search for a higher degree of sophistication in the class analysis of dependency. Modern dependencista class analysis, having surpassed simplistic "comprador" formulations, generally argues that the key to external control is found in the fractionalization by late-capitalist development of each domestic class. Some class strata become associated with the modern, internationally linked capitalist sector, while others remain rooted in the traditional national sectors: agriculture, small-scale manufacturing, much of the service economy. Fractionalization enables the state to attain a larger amount of "relative autonomy" with respect to civil society. But state technocrats tend to share values and interests with private-sector managers, both domestic and foreign. Moreover, they realize that state revenues and economic (thence military) power — which they want to maximize — are basically dependent on the modern part of the economy, and that its health in turn depends on continuing inputs of capital and technology from abroad. Thus, a triad of state officials (including military officers), transnational corporate managers, and domestic manager-entrepreneurs captures the heights of the political economy. They are supported by those members of the middle classes who consume the kinds of durable goods that the transnational specialize in producing and who aspire to upward mobility into the managerial-technocratic bourgeois stratum. Other class elements — the traditional national bourgeoisie, whose backward firms cannot compete with modern capitalist enterprise; and the popular classes, whose ability to consume has to be held in check in order to foster the high rate of capital accumulation which "associated-dependent development" requires — are pushed into opposition. The dominance of the triad is maintained by resort to authoritarian rule (necessary because the ruling coalition is numerically small) and by the diversity of interests among the opposition.

(Continues...)

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Excerpted from The New Bourgeoisie and the Limits of Dependency by David G. Becker. Copyright © 1983 Princeton University Press. Excerpted by permission of PRINCETON UNIVERSITY PRESS.
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Table of Contents

• FrontMatter, pg. i
• Contents, pg. vii
• List of Tables, pg. ix
• List of Figures, pg. xi
• Glossary of Acronyms, pg. xiii
• Foreword, pg. xvii
• Preface, pg. xxi
• CHAPTER ONE. Development, Class, and Dependency, pg. 3
• CHAPTER TWO. Peru: Un País Minero, pg. 17
• CHAPTER THREE. Mining Policy and Policymaking after 1968, pg. 49
• CHAPTER FOUR. World Industries and World Markets in Nonferrous Metals, pg. 72
• CHAPTER FIVE. Southern Peru Copper versus an Assertive State: The Cuajone Project, pg. 97
• CHAPTER SIX. The Decline and Fall of Cerro de Pasco, pg. 132
• CHAPTER SEVEN. The Medium-Mining Subsector, pg. 171
• CHAPTER EIGHT. Parastatal Enterprise in Peruvian Mining, pg. 201
• CHAPTER NINE. The Bourgeoisie and Middle Class of the Minería, pg. 237
• CHAPTER TEN. The Mining Industry and the Claims of Labor, pg. 279
• CHAPTER ELEVEN. The New Bourgeoisie and the Limits of Dependency, pg. 323
• APPENDIX A. Miscellaneous Data, pg. 345
• APPENDIX B. Mining Policy Guidelines and Legislation of the Military Regime, pg. 354
• APPENDIX C. A Comparison of Key Provisions of the Toquepala and Cuajone Basic Agreements, pg. 361
• APPENDIX D. Statutory Rights and Privileges of Peruvian Mine Workers, pg. 365
• Bibliography, pg. 369
• Index, pg. 409