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* On the effects of colonization in Latin America

[pp. 1-37]

PREFACE

In this thesis I attempt to explain the state of social and economic backwardness (generally named as "underdevelopment") in Latin America by going beyond some of the major limitations which exist in the theories of underdevelopment, dependency, development, and world system. The economic overdetermination of these theories does not permit these to explain the class and production structures existing in the region, neither can it provide us with an explanation of the fact that the social and economic systems prevailing in Latin America reproduce non-capitalist relations at the social level while utilising capitalist relations at the level of production.

Consequently, I focus on the origin, development and internal mechanisms of the reproduction of Latin America's social structure, arriving at a number of major conclusions; for example: that U.S. imperialist domination in the region is not a cause, but an effect of the social and economic structure of the region; that imperialist domination, underdevelopment, underindustrialization, and dictatorships are not a "sickness" in the continent, but instances of the reproduction of a particular social structure, as reflections of the articulation between capitalist relations of production and a pre-capitalist social structure, which leads to the conclusion that Latin America's social structure itself is the cause of underdevelopment, and the barrier to development.

Thus, all the specific features that characterize Latin American society (at different levels of development in each nation-state of the region) are not the effects of external causes, neither of underdevelopment caused by the development of capitalism in the centre, nor a parallel existence of two different modes of production -the "dualistic" approach-, nor the effect of dependence upon imperialist centres. These "specific" features are necessary for the functioning of this "specific" system of production, even when imperialism, and capitalism in general accentuated its characteristics, fostering a relation of dependence and backwardness. Chile in the seventies and eighties is a case that illustrates this articulation of the world economy as dominant in the internal economy, whilst Chile's internal social structure determined the political changes in the country.

This thesis is no more than a starting point for further field research, aiming to construct a general theory of the social and economic reality of the continent. Two themes constitute the central aspects of a theory of the Latin American process, thus far. Firstly, the character of Latin America society, and secondly, its principal enemy. Both have been related, time and again, to the question of the historical development of capitalism in Western Europe and the United States of America, and its assumed central role in shaping Latin American society.

I argue that a theory of the Latin American process must conceptualize the social organization of the continent as an entity in itself, and not as an appendage to the development of capitalism in the industrialized countries. Such a theory must be centred on the internal dynamics of the Latin American social structure, and then assess the actual role played by capitalism and imperialism in its polity.

I wrote this thesis because my commitment to the theories of the Latin American process is a political one. To me, science is a social tool and not and end in itself. As a Chilean intellectual, who managed to escape from his country after the military takeover in September 1973, my quest for a sound theoretical understanding of Latin American society is more an existential need than an academic exercise. This need encapsulates the concept that nothing is more fundamental for revolutionary forces than the correct identification of their friends and enemies. Consequently, this enhances dramatically the need for a rigorous scientific examination of the problem, in order to reach sound bases for political action. Thus, the importance of recognizing the heterogeneous nature of relations of production (then, social relations) in the Latin American countries lies not in the problem of categorizing them as capitalist or pre-capitalist, but as a key to understanding the dynamics of their operation.

My thesis is composed of three parts.

Firstly, Latin American development as based on a restricted, limited, and upper-class oriented type of market, and a fragmented society - is possible because it corresponds to a particular organization of the labour process, which, in turn, is the product of a particular mode of production. This particular mode of production is the outcome of the fusion of different modes of production in the region. In this context, the international capitalist system -at its imperialist stage- is not a cause, but a profiteer and supporter of the contemporary social structure in Latin America.

Secondly, this particular organization of the labour process sets the boundaries (limits) within which Latin America's social structure, political organization and organization of labour can vary. At the same time, it is this social structure and its political organization which create the conditions to keep this fragmented development going (conditions of reproduction of a mode of production). At an abstract level, I argue, unlike modern marxian scholars, that even when the relations of production are the genesis of the social structure, the latter can, in some historical situations, persist after the former subside, and adapt themselves to new forms of relations of production.

Thirdly, the main barrier to development in Latin America lies not in its economic structure but in its social structure. Therefore, revolutionary change in the region must begin at the social level and not at the economic level. Hence, the subordinate classes must replace the ruling classes as a previous condition for a superior organization of the labour process.

My departing point is that, so far, all theories of the Latin American process have been biased by an external approach. In general, they assume that Latin America is a junior partner within a stronger alien system of production, and that its contemporary organization of the labour process has been imposed by the needs of capitalism at the imperialist stage. Hence, its underdevelopment.

So far, insufficient account of the internal dynamics of Latin America has been taken by all theories on the subject.

Since the 1950's, two main streams of thought have shaped theories on the Latin American process: one, the lack of spread of "modernism" (read capitalism) in the region; two, dependency from the power of external capitalism. Both discourses share the concept of outside influence as determinant: the former, scarcity of influence; the latter, excess of it. This overlooks the characteristics of the recipient.

Developed after the Second World War, ECLA's theory argues that progress comes about through the spread of modernism to backward areas. Those areas evolve from a traditional towards a modern state as technology and capital are introduced. Therefore, underdevelopment is a condition which all countries have experienced at one time. Some have managed to develop, while others have not. In the process, modern urban centres absorb technology and capital first, while the countryside maintains a system of backward agriculture of large "feudal" states. Hence the notion of developing nations structured in dual societies, which assumes that in the advanced sector of the society a new bourgeoisie will emerge, both commercial and industrial -a progressive supporter of national interests, protecting the country against domination and penetration by foreign interests.

Consequently, ECLA's theory links "developed" and "underdeveloped" areas in a whole. In this structure, competition tends to result in appropriation to the "foreign interests" (capitalist countries of the Northern Hemisphere) of most of the increment of world income (1).

This analysis is limited. It cannot explain Latin American society as different to other regions; it ignores historical evidence through its oversimplification of stages of development; and, mainly, it cannot explain why historical experience has negated its assumption that development would be promoted by a progressive, nationalist bourgeoisie (e.g. the failure of agrarian reform and import-substitution policies).

Dependency theories view foreign penetration as the cause for underdevelopment. However, they do distinguish underdeveloped Latin America from pre- capitalist Europe. But, to do this, they introduce the concept of "undeveloped", in the sense that nations may once have been undeveloped but never underdeveloped, and that the contemporary underdevelopment of many parts of Latin America was created by the same process of capitalism that brought development to the industrialized nations. Undeveloped countries were, according to dependency scholars, those nations which had no "market relations" with the industrialized nations. If this concept is true, then the trade relations that France and other Western European nations (backward nations) had with England (an advanced country) in the XVII and XVIII centuries would make the former dependent on the latter. There is no need of any argument to demonstrate that this dependency relation did not bring underdevelopment to France, neither to any other country in Western Europe and North America. It seems to me that in this dependency argument there is a vicious circle: underdevelopment is explained by dependence and dependence by underdevelopment (2).

At least four formulations can be distinguished in dependency theories as understood by western european scholars:

a) the development of underdevelopment (Andre Gunder Frank, 1966-67). The most trivial of the four, because mistakenly it takes the existence of a world market as equivalent to the capitalist system, and builds upon this misconception in a patchy system of development of underdevelopment in Latin America, with capitalist penetration as the carrier of the disease. By and large, Frank's emphasis appears to be placed upon the nature, goals and motives of those who control the economic system rather than upon the specific relations of production. This position is similar to those of Weber and others who link capitalism with a profit motive or other (psychological) attributes of the commercial and industrial bourgeoisie rather than with relations of production per se (3).

b) the new dependency (Theotonio Dos Santos, 1970). According to Dos Santos industrial development is dependent on exports which generate foreign currency to buy capital goods. Exports in turn are usually tied to traditional sectors of the economy which are controlled by the oligarchies. The latter are tied to foreign capital; and they remit their high profits abroad. Industrial development then is conditioned by fluctuations in the balance of payments, which in dependent countries often leads to deficits caused by trade relations in a highly monopolised international market. Hence, financial dependence, external dependence, and last but not least, cultural dependence. It seems to me that none of the concepts in this description is useful to explain the particularities of the social structure in Latin America, and the central concept of dependence could easily be applied to the financial, cultural and technological interdependence amongst industrialised countries, but this would not be of any help to go deeper in our understanding of the reality in Latin America (4).

c) dependency and development (Fernando Henrique Cardoso, 1972). A valuable approach in Cardoso's writings is his assumption that modern capitalism and imperialism differ from Lenin's earlier conceptions. Capital accumulation, for example, is more the consequence of corporate rather than financial control. Investment by transnational corporations in Latin America is moving away from raw materials and agriculture to manufacturing. Thus, Cardoso argues, monopoly capitalism and economic growth are not contradictory terms, and dependent capitalist economic growth (alongside dependent development) has become a new form of monopolistic expansion in the continent. Such economic growth and development are oriented to a restricted, limited, and upper-class oriented type of market and society. New foreign capital is not needed in some areas where there are local savings and reinvestment of profits in local markets; dependent economies during times of monopolistic imperialistic expansion are exporting capital to the dominant economies, both through foreign capital presence in the region and flight of domestic capital. Thus, Cardoso criticises as misleading the notion of development of underdevelopment and the assumption of a lack of dynamism in dependent economies as a consequence of imperialism, but he fails to explain why development in Latin America is oriented to a restricted, limited, and upper-class oriented type of market. Cardoso, like others dependentists, overlooks the internal dynamics of the social structure in Latin America, bypassing the analysis of the relations of production prevailing there (5).

d) dependency and imperialism (Paul Baran and Paul Sweezy, 1966, as the seminal work, and then Harry Magdoff, 1969, and Anibal Quijano, 1970). The emphasis here is on the thesis that corporate capital has replaced finance capital as the dominant form of capital and that, therefore, imperialism is necessary for the advancement of capitalist economies, and, conversely, capitalist trade and investment in the poorer economies of the world is detrimental to the latter. This formulation is an attempt to relate a theory of imperialism to dependency in Latin America, but again, it overlooks the internal social and economic dynamics of the recipient of the encroachments of imperialism (6).

As distinct from the above theories, my argument focuses its analysis on the particularity of the social structure of Latin America -its origin, development and internal contradictions- and on the major role it plays in the current situation in the continent.

METHODOLOGY

My analysis proceeds from the assumption that any social structure is not given, but part of a process originating in the particular way in which labourers and non-labourers co-operate in order to dominate nature and produce the means of subsistence (food, clothes, housing, etc) and means of production (means and objects of labour) of a particular society. This process is both "sociological" and "economic" since the social relations of production (and reproduction at the same time, in the sense of reproducing the particular social organisation of labourers and non-labourers) and the material forces of production are always interacting (7).

Thence, the methodology I will utilise is that contained in the theory of modes of production as proposed by Marx (8) and later developed and/or discussed by structuralist marxism (9).

From Marx's perspective, human history is the history of different modes of production, each mode being the core of the particular social formation in which it exists. Historical materialism is the science of social formations. A social formation is a whole comprising economic, political and ideological practices, in which economic practice (that is the dominant mode of material production) structures the specific features of the social formation. In a word, it can be said that Marx's concept of "society" at a given stage of development is equivalent to the notion of social formation, and it is notionalised not as an entity but as an event, in the same way that in physics matter and energy are events and not entities.

Thus a mode of production is defined by the different and specific relationships between the forces of production and social relations of production within a social formation in which that mode of production is dominant. That definition amounting only to an abstraction of what a mode of production really is, in the sense of existing as a social event. Thus, the mode of production is that complex set of relationships.

The basic elements of any mode of production can be conceptualised as labourers, non-labourers, and means of production. The means of production are composed of means of labour and objects of labour. All those concepts being events, too. They are happening when they are what they are. Therefore, the relations between these four basic elements can give us the specific characteristics of any mode of production. The fundamental relation is property, with to instances as equally critical: ownership and possession.

Relations of production are defined by the relations of property at the level of ownership; and the forces of production are defined by the way in which real appropriation of nature is carried out, or, to put it another way, by the actual conditions of labour. From this point of view, the fundamental relation defining forces of production is property as well, but at the level of possession. At the same time, this relation determines both the technological level ( the limits of its development and the relative speed of it ) and the main type of coercion utilised by non-labourers over labourers to maintain the specific social relations of production, i.e. economic control as in the capitalist mode of production, or political (military-religious) control as in any pre- capitalist modes of production, or a combination of both if a fusion of modes of production occurs generating another type of mode of production.

At this stage of my schematic description it can be seen that Marx's theory utilises concepts in which "social" and "economic" are component parts of a unity, instances of the same event, and that event being the existence of those two instances, i.e., the concept of production as a social activity requires to be understood as a practice in which apparently there is only a production of things, although in reality there is a production of social relations. As Balibar conceptualises it, "the reproduction of the relations of production". That is, from a conceptual point of view, production means "reproduction". Therefore, as far as my thesis is concerned, the particular social structure we find in Latin America originates from the specific manner of production in existence. Consequently, I intend to concentrate on the investigation of the basic features of production in the region in almost the last five centuries. This will provide an explanation of both the basic inner articulation and the dynamics of Latin American social structure, and the actual conditions in which the latter had to face the entry of the world capitalist market in the late XIX century. In the thesis, a major methodological role will be played by Marxian theory in explaining the dynamics of economic and political conquest or submission between two different productive systems. In this particular case a new mode of production can be seen to emerge as a result of conquest and submission. That is, a third productive system results from the collision of the two former systems.

Consequently, I will utilise the concepts of collision, dissolution, fusion of remnants and the development of a new mode of production, as stages in the dynamics of the collision between two different modes of production, in which one of these succeeds in politically conquering the other. My research will thus concentrate on two major socio-economic phases of Latin American history: A.- the collision, dissolution, and fusion of remnants between the Western European feudal mode of production and the indigenous modes of production in Latin America, and the subsequent development of a new mode of production in the region and, B.- the collision between the capitalist mode of production and the new mode of production, and the subsequent dissolution and fusion which describes the current stage in the continent.

OBJECTIVES

If one looks at Latin American society today, the most apparent feature is a majority of the population living either outside or in the fringes of the prevailing economic system, with a significative proportion among them surviving in conditions of extreme poverty in the countryside and the slums in the outskirts of the cities. On the other hand, there is a minority enjoying "the capitalist way of life" ("american way of life", rather) and having access to a market almost entirely meeting the needs of their capacity of consumption. Between those two poles there is a tremendous economic gap and acute social tension. The objective of my thesis is an attempt to explain this particular socio-economic reality.

The object of my research will be to analyze Latin America in the historical period from the Spanish and Portuguese invasion and conquest (about 1500 to 1570) to the insertion of the continental socio-economic system in the world capitalist system in XX century. I intend to demonstrate that:

(1) A unique productive system arose from the collision and dissolution of the Andean and tribal productive systems and the Western European feudal mode of production. It was a pre-capitalist mode of production based on agriculture. Neither feudal nor capitalist (10), it had, as its basic unit of production, the "hacienda" which established a rough dividing line between the three great classes of that rural society: the landlord ("hacendado"), peon classes and non-peon peasants. The latter were landless peasants who were permitted to till a small plot of land in the hacienda to produce their means of subsistence as a compensation for their work in the hacienda, and who were attached to the landlords' estates by means of monetary debts to the hacendado. The hacienda -a type of self-sufficient unit of production whose main produce was directed both towards the domestic and foreign markets- constitutes the basis upon which the social structure in this particular productive system arose. That is, a ruling class composed of the owners of the land, and a subordinate class of workers (direct labourers) who were compensated in kind or in token money, and having no significative access to the market. Furthermore, because of the specific circumstances of the collision, the ruling class was composed only of whites, and the subordinate class of Indian and Mestizos, adding a racialist particularity to the emergent social structure. These phenomena produced a social formation with specific economic, political and ideological, thence cultural, practices, within the framework of the whole system being a colony. There thus existed a determinant mode of production, which I will call the Latin American Mode of Production (LAMP) (11). Its main features arose from the social relation hacienda-peon, where surplus labour was not appropriated as rent or taxes but as an economic compensation in exchange for the labourer having the right to till a small subsistence plot ( sometimes lesser than subsistence), in order to meet the requirements of indebtedness. Therefore its economy was founded on large state production and not on small individual production.

(2) A second collision began in the last half of XIX century, this time between the LAMP and the Western European-North American emergent capitalist mode of production. This collision originated what is known today as Latin America's underdevelopment. The Latin American ruling class became dependent on the world capitalist system from the XIX century onwards; this had its rationale within the particular mode of production I am referring to, and was not imposed from without as some supporters of the underconsumpsionist theory of the development of capitalism assume -particularly those who see the "peripheral" market as necessary for a capitalist mode of production to develop, and, thence, Latin American underdevelopment as caused solely by capitalist development in the capitalist world centre. My hypothesis is that in the formation and evolution of current Latin American underdevelopment, the particular mode of production I am referring to did play a major role facilitating the dominance of foreign capitalism in the region at the time of capitalist expansion all over the world in the form of imperialism ( first British then American ). At the same time, the social structure in the region was strengthened by this collision because the original dependent (at the economic level) character of the ruling class served as an internal support for it.

(3) The current stage in Latin American development is one of dissolution of the mode of production outlined above under the pressure of the capitalist mode of production. Due to the fusion of some of the remnants of the former with the latter, with its social structure remaining dominant, this structure appears to be the main reason why continental capitalist development is still reproducing the main characteristics of Latin American underdevelopment; i.e., restricted domestic markets, highly regressive distribution of income, high rates of unemployment, large concentration of landownership (the pattern latifundio-minifundio), high rates of foreign indebtedness, dominance of foreign investments in the industrial sector, weak development of capital goods domestic industry, dependence on foreign technology, and, as a necessary condition to maintain this pattern (mainly the availability of unlimited supply of cheap labour) a further tendency towards authoritarian political systems covering a range from "democratic dictatorship" (Mexico) to "military dictatorship" (Chile).

(4) As a consequence of these developments, the capitalist development of the region will not solve its socio-economic problems, but aggravate them at a different level. This being the case, the main contradiction between the forces of production and relations of production in Latin America currently appears as one between the ruling class as a whole (for the latter is dependent upon the world capitalist system) and the direct producers. The only feasible way to transform the social structure to meet the requirements of the indigenous population seems to be through the development of a socialist mode of production. The latter not being the same that the bureaucratic socialist systems prevailing in regions like Soviet Union and China, where there was a failure in developing a socialist mode of production.

Four major points will be elaborated in the remainder of this introduction:

(a) how the hacienda shaped the agrarian structure and, in so doing, the social structure in the continent during the colonial period.

(b) how the hacienda constituted the basic unit of production in what was neither a feudal nor a capitalist mode of production.

(c) how the existence of unlimited sources of labour was at the basis of the formation of the LAMP, and,

(d) how the economic underdevelopment of Latin America was shaped from the late XIX century onwards.

THE AGRARIAN STRUCTURE AND THE HACIENDA

The Brazilian economist Celso Furtado wrote some years ago that "in Latin America, agrarian structures are not only an element of the production system but also the basic feature of the entire social organisation"... "both in the economics whose point of departure was export agriculture and in those initially organised around mining production, the large state tended to become the basic element of social organisation" (12).

The large estate in the form of hacienda, generally constituted the basis of the Spanish colonial system, with its aim of reproducing the conditions of exploitation in the entire region -exporting precious metals, raw materials and foodstuff to Spain. Solon Barraclough says of the hacienda system:

"The seigneural system made the hacienda a source of power and status more than an immediate productive resource...In the rural areas, contacts with national establishments such as the police, financial and commercial organisations, church authorities, and the institutions of health and education have taken place to a great extent through the intermediaries of the patron. On the large fundos and in the communities of small proprietors who depend on the haciendas, the campesinos have had minimum direct contact with the outside world. The hacienda, more than a unit of production, has been a social system"(13).

The hacienda developed mainly in the late XVI century and early XVII century as a replacement for the encomienda system, whose decline came as a result of the dual pressure from a Spanish absolutist monarchy trying to avoid the creation of a feudal military class of encomenderos in the colony, and the diminishing productivity of the indigenous communities producing decreasing amounts of tribute in kind and growing difficulties in providing tribute in labour for the mining sites, because the overworked population was rapidly diminishing its ranks during the period under consideration.

In the late XVII century all the encomenderos were charged with a tax revenue of fifty per cent ( the media anata ). This was the coup the grace to the system, at a time when the hacienda was already the main unit of production throughout the continent under Spanish and Portuguese domination.

Originally, the encomenderos in Spanish America and the donatarios in Portuguese America were given grants of land by the Crown, with the right to exact tribute in kind and labour from the Indian communities. I agree with Charles Gibson when he stated that "the original encomienda"..."was a transitional device between conquest and a settled society. Its crudity was appropriate to an era dominated by conquistadores"..."it was the dominant institution of its period and through it the first work of the colony was done"..."the new colonial aristocracy would be based on land, commerce, or mineral wealth, rather than upon native tribute payments, and the labour necessary for these new enterprises would be secured in ways quite unrelated to the encomienda" (14). That is, the peonage system in the haciendas. During the XVII century, "haciendas employed the inhabitants of Indian towns as peones and controlled all their activities. The wealthiest and most powerful persons in the colony - viceroys, high-ranking officials, prosperous merchants, ecclesiastics- became hacendados. The process was irrevocable"... "Thus haciendas ordinarily provided lands ( lands, to be sure, that had been taken from Indians ) on which peones could live and raise crops"..." Exploitative and cruel the hacienda certainly was. But conquest, encomienda and repartimiento were far more so, and no other comparable institution offered Indians so much"... "peonage, which is generally regarded as the classic Spanish-American labour device"..."continued into the twentieth century"...it "was an entrenched technique with a life and strength of its own, and it remained"..."in a labour economy so thoroughly dominated by the employers"...;"if peonage is the classic employment system of Spanish America, the hacienda is surely the classic land system"...;"there was no successor to the hacienda until the incipient land reform movement of the twentieth century" (15).

The same pattern developed in Portuguese America: "The Brazilian fazenda provides another good illustration. Labour was scarce, and this induced the landowner to allow landless peasants to cultivate a small plot for their existence on his estate; in exchange he had a readily available labour force at his disposal when it was required" (16), and "along with monoculture that absorbed other forms of production, there developed a semi-feudal society, with a minority of whites and light-skinned mulattoes dominating, patriarchally and polygamously, from the Big Houses of stone and mortar, not only the slaves that were bred so prolifically in the senzalas, but the sharecroppers as well, the tenants or retainers, those who dwelt in the huts of mud and straw, vassals of the Big Hose in the strictest meaning of the word" (17).

The hacienda developed in Latin America as the basic economic support of the entire productive system, providing possibilities for plantations (sugar, cotton, and coffee), mines (mainly gold and silver), and cattle ranches to develop and produce for the European markets (mainly Spain and Portugal) during colonial times. From Mexico in the north, to Chile and the inland provinces of Argentina in the South, East to the Brazilian coastal region around Rio de Janeiro, the hacienda's organisation of labour was almost the same in the extensive areas of subsistence agriculture. It thus supported the cattle areas of Northern Mexico, Southern Colombia, Northern Argentina and Northern Brazil, the mining zones of Peru-Bolivia, Mexico and Brazil, and the cotton (Northern Brazil, Caribbean Islands, Peru) regions (18).

The agrarian structure formed by the organisation of labour on the haciendas continues to dominate the agricultural sector. In 1966, in an article based on data from seven studies of land tenure and development carried out simultaneously in Argentina, Brazil, Colombia, Chile, Ecuador, Guatemala and Peru, sponsored by the Interamerican Committee for Agricultural Development, it was stated that:

" In the absence of technological development, land is the main source of wealth in the traditional rural economy. Income from land, however, cannot be realised without labour. Rights to land have therefore been accompanied by laws and customs, which assure the landowners a continuing and compliant labour supply. These land tenure institutions are a product of the power structure. Plainly speaking, ownership or control of land is power in the sense of real or potential ability to make another person do one's will. Power over rural labour is reflected in tenure institutions which bind workers to the land while conceding them little income and few continuing rights. In the countries studied, tenure institutions vary from peonage and inquilinage, through various forms of wage and sharehiring, to instances of "commercial" cash and share-tenancy contracts. The most common technique used to tie the campesino to the farm is to cede him a small parcel of land for his home and garden while seeing to it that he has no alternative opportunities to obtain land or employment. The system receives characteristic names according to the traditions of each country: inquilinaje, huasipungo, yanaconazgo, etc. The campesino is obliged to work for a low salary or often for nothing for a certain period of each year or to turn his production over to the owner at a low price" (19).

Thus, during the colonial period, an agrarian structure was formed which, in the middle of the XX century, was still very much alive and restricting the development of Latin American society, since "in destroying the hacienda you also destroy a framework of economic, social and political ties within which people have grown up and within which they have learned to cope with life's problems" (20). At the basis of this social-agrarian structure was the new mode of production developed during the colonial period, whose main features I will describe later.

The colonial social structure took the form of a social pyramid:

At the top, a minority of private owners of land and means of production, who constituted the "citizens" of the colonial society (all whites); at the bottom, a huge majority of direct rural labourers (all Indians or Negroes), who had no right to participate in colonial society, and a small minority of mixed races in the middle, going upwards and downwards in the social ladder, many serving as foremen for the white landowners.

"A superficial comparison of Iberian and Ibero-American society about 1700 ( when the haciendas were already the basic unit of production of the system -author's note) suggests that Iberia had managed to reproduce in the Mexican and Andean Highlands and along the coast of Brazil a replica, or what passed for a replica, of their Old World Society: a two-class or two-stratum social structure. An elite of landowners, miners, high bureaucrats and churchmen -all whites. A mass of rural dwellers (Indian and Negroes) in Amerindian communities or on haciendas or tropical plantations. And between the two strata: a small group of merchants, bureaucrats, minor ecclesiastics, as well as a number of mestizos, mulattos and zambos (mixed races) as skilled agricultural and mining foremen, cow punchers, mule drivers, weavers and blacksmiths, petty merchants and peddlers, wage labourers...or vagabonds or vagrants, often preying upon Amerindian communities. The Indians and Negroes accounted for 88% of the population, whites about 6%, and mulattoes, mestizos and zambos, 6%. It was probably in the XVII century that the large landowner (hacendado -author's note) emerged in America as the dominant figure of both the colonial society and economy. Landowners (and miners) appear as quasi-seigneurs, with their own chaplains, their own jails, their own stocks and whips for the deviants under their control, and their own police forces. Yet the New World seigneurs also provide their own form of security for the obedient: subsistence, protection and social stability" (21).

Two centuries later, there had been no major changes in this social structure, except in one area: the mixture of races pushed more mestizos and even whites into the ranks of the direct labourers, while the ruling class continued to be almost wholly white.

THE FEUDAL MANOR AND THE HACIENDA

A major contemporary controversy in the debates on the colonial period in Spanish and Portuguese America is the question of whether the dominant mode of production was feudal or capitalist. From a Marxian point of view it is impossible to describe capitalist relations of production as dominant in a social formation where labour has not yet been separated from the social conditions of its existence (22), the labourers are unfree, and money- capital has hardly been transformed into industrial- capital; furthermore, the means of subsistence for the direct labourers were available outside the market. Thus, it was clearly a pre-capitalist social formation. The most important advocate of the "capitalist colonial times" theory in Latin America, Andre Gunder Frank, wrongly assumes, as the only basis for his theory, that the existence of a market and production for export gave capitalist features to the colonial period in Latin America. Without analyzing the difference between a feudal, capitalist, or slave market, we could assume for example, that the Roman Empire's market and foreign trade gave its society dominant capitalist relations of production.

The issue becomes more complex, however, if it was a feudal mode of production. Taking Hindess and Hirst's definition of a feudal mode of production, we can say that its basic social relation of production is between landlord (non-labourer) and tenant (direct labourer), with the tenant forced to pay rent to the landlord. Thence, from the tenant's standpoint the rent (either in kind, money or labour) is a deduction of his own surplus- labour (the amount of this deduction depending on the relative strength of the landlord class faced with the tenant class). In other words, in the FMP the labourer is the owner of his own surplus-labour but, at the same time, part of it is expropriated from him (or all of it, depending on the balance of power between the two antagonistic classes) by the landlord. Consequently, a conflict with the non-labourer (landlord) takes place between two proprietors, one of surplus-labour (appearing, of course, in the form of produce and/or labour time) and the other of land -a conflict between a diminished deduction or non-deduction and an increased or total deduction. In addition there were struggles around the kind of crop each class wanted to raise from the land, a struggle between proprietors and possessors, as it were.

Typical of the above mentioned struggle was that which occurred in England in the late fifteenth century when an acute conflict arose..."between the two great divisions of rural society, the landlords, who leaned towards sheep farming, and the tenants, whose livelihood still depended in the first place upon the raising of crops" (23).

It is thus possible to state that the FMP is characterised by the exploitation of a class of independent small direct producers by a class of noble landowners. The system was based upon independent small peasant production, which enabled feudal rent to take "all three forms of pre-capitalist rent: labour-rent, rent-in-kind and money rent" (24); and, on the other hand, produced some sort of "sharing" of any increase in productivity between landlord and tenant, as described by Hindess and Hirst:

"In the FMP, unlike capitalist or slave production, in which increases in productivity go directly to the exploiter, the labourer can retain whatever portion of the product remains after the terms specified for the rent (surplus-product) are met. The surplus-product is specified in a certain number of days of labour-service, a portion of the product or a sum of money" (25).

In other words, from the technical point of view, the basic class relation landlord-tenant promoted increases in productivity both from the standpoint of the tenant and the landlord. It is possible that this was one of the most important reasons for the agricultural revolution which took place in Western Europe during the XVII-XVIII centuries, when the development of the feudal forces of production surpassed the development of the feudal social relations of production, and the entire FMP entered its crisis of dissolution (26).

We are now in a position to compare the above with what I define as the basic social relation of production in Spanish and Portuguese America in the XVIII-XIX centuries. That is, hacendado-peon. The hacendado, private owner of land, was the non-labourer, and the peon, the direct labourer. The peon was not a tenant because he did not have surplus-labour to share with the hacendado; that is, the whole of the peon's surplus- labour was appropriated by the hacendado in the form of direct labour on the hacendado's land. From both the hacendado's and peon's standpoint, the labour that the peon did on the hacendado's land was compensated by the landlord in the form of a small plot for the peon to obtain from it his means of subsistence and reproduction as a labourer (that is, necessary labour). Unlike the mode of appropriation of surplus-labour in the FMP, in Latin America the direct labourer appeared compensated by the labour time he/she worked on the non-labourers land, and not being expropriated (deduction) of part of the surplus labour by the landlord. Clearly, there was a barter in this social articulation: a small subsistence plot for the direct labourer in exchange for labour time spent on the non-labourer's land. There was no political submission here. There was in the same articulation within the FMP.

In other words, unlike the FMP, in which the labourer is the owner of his own surplus-labour (which appears to him as an aggregate of products beyond his subsistence needs) and is expropriated of a part of it by force, in Latin American colonial times, the labourer received a compensation in kind (land) for his surplus- labour (which appears to him/her as the labour time he/she spends on the landlord's land).

Consequently, the peon's class struggle with the hacendado is one which takes place between non- proprietor and proprietor. The peon's class struggle is primarily to improve the compensation for the barter of his labour time. Moreover, as the peon is a rural labourer and not a small rural producer, it doesn't matter to the direct labourer what kind of crops the non-labourer wants to raise on his land.

In other words, unlike the FMP, which is based upon independent small peasant production, the Latin American colonial system of production was based on big landlord production where, of course, increases in productivity meant nothing to the direct labourer, who had no share in it. The compensation for his labour time bares no relation to the productivity of his labour. So, at the technical level, the basic class relation hacendado- peon worked against any increases in productivity from the standpoint of the direct labourer (27).

Thus, if we accept the Marxian assumption that the mode of appropriation of surplus-labour is the dominant articulation of the structure at the economic level, and, that this structure gives specificity to the concept of mode of production, from the above, we can state that there is a sufficient theoretical basis to conclude that there was a Latin American mode of production, and that it was neither feudal nor capitalist. It was yet another pre-capitalist mode of production, the notion of pre- capitalist not meaning "before transforming or developing into capitalist" but merely having forces of production lesser developed than the latter.

To further the understanding of this set of concepts, I will summarily describe the basic unit of production of the FMP (the manor) and that of the LAMP (the hacienda):

(a) the real conditions of labour in the feudal manor are as follows: the land is divided into the demesne, where the tenant-labourer must work for the landowner, and individual fields which the tenant-labourers possess in exchange for rent in kind, or money and labour. In other words, the surplus-labour is extracted from the labourer on both the small plot he possesses and through his labour on the demesne. Therefore, depending on the political capacity of the labourer to reduce the amount of surplus-labour he must provide for his small plot, there is room within this set of relations to accumulate surplus-labour for himself and to develop conditions of deterioration of the feudal mode of production as such. At the same time, this process intensifies the contradiction between non-labourer and labourer. Both conditions strengthen the process of dissolution of the feudal mode of production. On the other hand, the demesne will enter in a process of becoming an aggregate of plots given in tenancy to the richer peasants who can increase the productivity of the land giving, in turn, more rent to the landowner. The whole set of relations moves towards conditions where some labourers can own means of labour, objects of labour, and accumulate (28).

(b) Conversely, the real conditions of labour in the Latin American hacienda were as follows: the labourers are attached to the land mainly through debts ( the landowner has the monopoly of commerce within the hacienda) and are given a plot which is just enough to build a hut and cultivate the means of subsistence for each labourer and his family. The landowner does not receive rent of any kind from this plot because it is intended to produce only the food for the labourer and his family. In exchange for this "subsistence plot", the labourer (inquilino in Chile, huasipungero in Ecuador, yanacona in Peru, peon in Mexico, etc.) must work on the land of the hacendado. Thus, there is a complete separation between surplus-labour and necessary labour. Furthermore, part of the necessary labour is often also expropriated by the landowner, depending on the size of the small plot that the labourer possesses. The main socioeconomic meaning of this set of relations is that, on the one hand, to the labourer the "arrangement" seems fair, because the landowner appears as bartering a piece of land in exchange for labour. This is so because the labourer has very little choice between being a vagabond (the Indian community becoming increasingly unable to feed all its members) or having a small piece of land on which he can cultivate food for himself and his family. On the other hand, on the small plot there is no possibility for the labourer to accumulate surplus-labour on his own behalf; in other words, there is no other possibility to liberate himself from this fetter than the political one. There is an abyssal division between non-labourer and labourer.

To summarize: in the feudal unit of production there was a relation, labourer-means of production-non- labourer, where surplus-labour could be accumulated both by the landowner and some of the labourers, originating a process in which the feudal ruling class became weaker in face of those particular labourers, a situation also reflected in the development of the towns as centres of merchants and handicrafters reproducing their business linked with the growing agricultural production. In the Latin American hacienda, on the contrary, there was a relation, labourer-means of production-non-labourer, where surplus-labour could be accumulated only by non- labourers. Thence, the ruling class remained strong enough to maintain a social structure in which the direct labourer had no other role to play than that of producer without being integrated into commodity circulation. In other words, in the mercantilist epoch, in Latin America the entire labouring class remained outside the market, giving shape to one of the most important socioeconomic features of this specific social formation (29).

These were the results of the collision and dissolution of the Latin American primitive-communal modes of production (both nomadic-hunters and sedentary-agricultural) with the alien Western European FMP on its last political stage of absolutist monarchies. Several centuries before, as Perry Anderson defines accurately, the feudal mode of production in Europe had been..."the result of a fusion of elements released from the shock and dissolution of two antagonistic modes of production anterior to it: the slave mode of production of classical antiquity, and the primitive-communal mode of production of the tribal populations of the periphery" (30).

UNLIMITED SOURCES OF LABOUR

A major characteristic of the colonial period was the availability of labour, mainly Indian labour. This fact marked the whole complex set of relations with a dual appearance, in which it was possible to see incorrectly, two societies developing side by side. In the XX century, some economists developed a "dualistic theory" based upon this outward appearance of Latin American society. They saw a modern sector (capitalist) and a traditional sector (traditional-colonial heritage), with the latter restricting the growth of the former. Therefore, they concluded, the solution to Latin American development (economic growth with development) was to transform the traditional sector through the capitalist development of the region. Many attempts in such direction failed in the last thirty or forty years, and new research made clear that the "dualistic" approach was inaccurate. As one scholar wrote:

"...one must be careful, however, not to assume that social tension and poorly integrated economy imply the presence of a dual society. It is frequently affirmed that colonialism consisted of the superimposition of a European society upon an indigenous structure, and that the latter continued its existence essentially undisturbed and unchanged. The problem of development then is reviewed as "integrating" the unchanged, backward, and "traditional" sector into the modern economy. Thus, for example, a group of U.N. economists, sociologists, and political scientists (in 1961) asserted that, 'The social structure of Latin America has in the past been characterized by a serious lack of integration'. Yet the effect of colonialism was not to isolate but to destroy the indigenous social structure and to reintegrate the original population into a capitalist-colonialist system which was and is highly unfavourable to their interests. This system has persisted in Latin America even after 150 years of independence" (31).

Sharing, by and large, the above point of view of Griffin, I must add that it was the Spanish colonial system which destroyed in a process the indigenous social structure at the same time that a system of production was being created, and in the latter the indigenous population was assigned the role of direct labourer, and most importantly, the task of reproducing labour power by its own means, as it were, outside the Spanish economic system in Latin America. This was the first stage of development of the new Spanish colonial productive system, roughly speaking during the XVI and XVII centuries. In the second stage (XVII-XVIII centuries), the indigenous labour force reproduced itself in two ways: as direct labourer attached to the landed estates (haciendas-latifundios), and in the indigenous communities, left aside as long as the need for more cheap labour did not arise. "In 1570 only 1,850,000 American Indians had entered the Spanish social orbit" (that is, 18% of the Indian population) (32). "In 1810, three hundred years after Spanish conquest of Mexico, almost 20% of the occupied land there was owned by the Indian communities" (33).

Thus, the basic feature of the destruction of the indigenous social structure by the Spanish colonialist system was to assure an unlimited source of labour, not cheap, but gratis. During the XIX-XX centuries the system evolved into a structure providing an unlimited source of cheap labour. Therefore, it must be said that today, in Latin America, the so called "modern" and "traditional" sectors of the economy are not opposite sectors but component parts of a single productive system, having a social structure geared to meet the needs of it. Both have their origin in the colonial productive system.

THE CURRENT STAGE OF DEVELOPMENT

The period of collision between the Latin American productive system and the capitalist mode of production that began in the XIX century, and continues today, has been marked by the notorious reaction of the regional social structure to the stress of the shock.

The particularities of this social structure, even under the cover of modern democratic systems, have remained almost intact in many places, showing that its colonial basis was solid and a product of a particular socio-economic system.

"The Spanish colonies generated a social structure in which labourers and large landholders were entirely separate groups with no mobility between them...Hardly capitalist in the Weberian sense -neither efficient nor impersonal nor ascetic- they evolved methods which resulted in market relationships between strong landowners and weak labourers based on a monopolistic situation which is a salient characteristic of Latin American agrarian history down to the present day" (34).

This monopolistic situation, of course, had its effects on industrial history "down to the present day", as being a history of industries developed with unlimited resources of cheap labour. Thus, it was reasonable for the ruling class to concentrate on the export of raw materials and foodstuffs since the XIX century onwards, and, at the same time, it was uneconomic for them to try to develop an industry of capital goods in that period, having a very small domestic market and being unable to be competitive in the world market: "At the same time it is impossible to consider the manufacture of machinery in Argentina as of any importance, for the simple reason that although the machinery might be made, it is not worthwhile to turn out only two or three machines after preparing the moulds; and as there would be no market for a greater quantity, those required by the country continue to be imported" (35).

This dependence on exports of raw materials and foodstuffs, on the one hand, and a resultant underdevelopment of the capital goods industry on the other, have made the economic structure of the continent dependent on world monopoly capital in such a way that there is also a very tight political submission.

The social structure (seen as a dynamic relation both from the sociological and economic points of view happening parallel on time), as it existed at the time of independence from Spanish and Portuguese domination in XIX century, paved the way for international capital to dominate the whole region. And, when in the early twentieth century the socialist mode of production ( after the Bolshevik revolution in Russia) emerged as a threat to the very existence of the capitalist world system, this situation of dominance took a further step forward, adding to the economic mechanism of domination a political-military mechanism, both controlled by the North American ruling class. I shall examine this further in the Third Chapter of the Second Section.

The internal dynamics of the Latin American productive system pushed its reproduction into utilizing labour intensive processes of production to meet increased demand for products both from foreign and domestic markets, notoriously in the agricultural sector. The obvious results were a lag in technology, productivity, and a low capacity for indigenous growth. This was the case during the British Empire's contact with the region in the XVIII and XIX centuries. British presence in Latin America as the vanguard of capitalism taking over the region as a source of cheap raw materials and foodstuffs will be examined at length in the Second Chapter of the Second Section (36).

Woodrow Borah saw the same process as follows:

"We all know the role of Latin America as a supplier of foodstuffs and raw materials to the industrially more developed countries -colonial in the other possible sense, with concomitants of monoculture, excessive dependence upon world markets and prices, and unfavourable relations of raw to processed materials. In this meaning, despite recent industrialisation, nearly a century and a half of independence have made Latin America more rather than less colonial. The point is easily established if we compare the impact upon it of the interruptions of international supplies during the Eighteenth century, with the shortages and dislocations of 1914-1919 or 1940-1956. Spain and Portugal were never able to achieve such integration in their economic systems"..."Despite the upheavals of a century and a half, the hacienda is very much a feature of the economic landscape today"..."Capital accumulation in Latin America is obstructed or even prevented by an interesting complex of survivals. Their effectiveness was reinforced through the destruction, in the early Nineteenth century, of the well-developed class of artisans with its manufactures, especially textiles and metal goods. They could not compete with the flood of cheap British wares that entered the various countries once the metropolitan commercial system ceased to operate, and the new rulers hastened to adopt the latest fashion of economic liberalism. A class that might have developed habits of savings was thus eliminated, not to be replaced until almost our day, and in other ways" (37)

Of course, it is an overstatement to say that British trade "destroyed" the class of artisans in Latin America, but it is possible to assert that it was "frozen" for almost a century at a very low level of productivity, generating a fracture within the economic system which today appears as a component part of the current state of underdevelopment, whose features Griffin described as follows in 1966:

"...most Latin American nations are split into two major sectors: the rural, agricultural sector, which includes up to 70 per cent of the population, and the considerably smaller urban areas. The former is subdivided into minifundia -which are largely subsistence farms- and the associated latifundia and plantations. The last named may be owned either by domestic or foreign interests. The urban sector is usually subdivided into petty services and government (which together include the urban disguised unemployed) and the modern manufacturing and extractive industries, plus the associated transport, banking and financial services. The modern urban sector frequently includes foreign as well as domestic businesses, and in the realtively more industrialized economies may include some autonomous public-sector corporations" (38).

At the basis of the whole socioeconomic structure was the polarity latifundio-minifundio, which was a reflection of the specific Latin American polarity non- labourer-labourer. The latter being pushed out of the market and living on the fringes of the social formation, as it were, in order to dispose of very cheap labour power for the non-labourers, i.e. "the existence of thousands of small land-holdings, meagre for the most part, does not constitute a contradiction, in economic terms, with the predominance of the latifundio system. They are frequently directly dependent on the power of the owner of the large state, those who live on them making up a labour force that is readily available for economic or political ends and which in addition costs nothing" (39).

Summarizing, it can be said that the hacienda - specific colonial organization of labour to Latin America- was the unit of production of the LAMP, a unit of production which impeded, during the colonial period - through its main features of not permitting accumulation of surplus labour in any sector among the direct labourers, thus confining the market only to the ruling class and, thence, producing a highly regressive distribution of income-, any possibility of developing from within capitalist forms of production, unlike the feudal mode of production in Western Europe, i.e. to push the emergence of free labourers and accumulation of monetary capital through rising productivity as a result of some direct labourers accumulating surplus labour. On the contrary, the LAMP had a very rigid market non linked with the direct producers, and a production of suitable handicrafts and manufactures, the whole supported by a tight social structure.

The capitalist organization of labour that penetrated the continent after the independence period was externally generated, bringing about well known consequences.

At the moment of the collision between the LAMP and the capitalist mode of production (XIX century), the former was in a process of consolidation. It had passed through the stage of transition from the early collision in the XVI and XVII centuries (encomiendas-Indian communities) to the settling down stage (haciendas). The stage of transition lasted more or less from 1500 to 1650, the stage of settling down, from 1650 to 1800, and the stage of collision with the capitalist mode of production, from 1800 onwards, building the basis for a specific form of industrialization. That is, buying machinery and heavy industries inputs (coal, iron) mainly from Britain, and selling to her raw materials (copper, cotton, nitrate, hides, etc) and foodstuffs (sugar, meat, coffee, wheat, etc.), and relying on foreign investments, thus becoming dependent on the capitalist world market in two ways: exports of primary products and imports of capital goods and intermediate goods. In other words, the basis for enlarged accumulation was outside the domestic market, with restricted potential to develop from there onwards a self sustained industrialized system of production. This made the ruling class as a whole highly dependent upon the capitalist ruling classes in the industrialised countries.

This situation, originated within the LAMP, from 1900 onwards was used by the United States economy to take over the dominion of the continent. It is important to point out that from the early twenties up to the eighties, Latin American societies were not only under economic dominance by the American imperialism, but also under its political dominance, particularly out of the American necessity to prevent socialist revolution in the region...its backyard. At any rate, this new political situation strengthened the social structure in the continent, becoming a powerful shield against the "socialist revolution".

This reality is also valid for Chile, Brazil, Argentina, and Uruguay, where since the early seventies military dictatorships have been forcing those societies along a capitalist path to industrialization, reproducing, nevertheless, the main characteristics of underdevelopment as outlined at the beginning of this introduction. (40).

As I shall outline, this process created a specific Latin American social stratification during the XX century, in which the emergent bourgeoisie and middle social sectors have the unique features of being dependent on the world capitalist bourgeoisie and having non-antagonistic contradictions with the remnants of the ruling landowning class of the XIX century.

On the whole, these characteristics have made the Latin American ruling class very cohesive, and the middle social sectors an extremely conservative stratum. This explains what has been termed the "continental collapse" of the middle-class revolutions in Latin America during the first half of this century (The Popular Front in Chile, Peronism in Argentina, Getulio Vargas in Brazil, APRA in Peru, etc.).

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FOOTNOTES PREFACE

1) See ECLA (Economic Commission for Latin America), "The Economic Development of Latin America and its Principal Problem", United Nations, New York, 1978.

2) See "Dependency and Imperialism: The roots of Latin American Underdevelopment", by Susanne Bodenheimer, in POLITICS AND SOCIETY, May 1971, pp. 327-358.

3) Mainly in "The Development of Underdevelopment", by Andre Gunder Frank, in MONTHLY REVIEW, XVII, September 1966, pp. 17-31.

4) See Theotonio Dos Santos, "The Structure of Dependence", in AMERICAN ECONOMIC REVIEW, LX, May 1970, pp. 231-236, and "Dependencia y Cambio Social", in CUADERNOS DE ESTUDIOS SOCIO-ECONOMICOS, Centro de Estudios Socio-Economicos, Universidad de Chile, Santiago de Chile, 1970.

5) See F. H. Cardoso, "Dependency and Development in Latin America", in NEW LEFT REVIEW, No. 74, July-August 1972, London; and "Imperialism and Dependency in Latin America", in STRUCTURES OF DEPENDENCY, edited by Frank Bonilla and Robert Girling, Stanford, U.S.A., 1973, pp. 7-16.

6) See Paul Baran, "Monopoly Capital: An Essay on the American Economic and Social Order", Monthly Review Press, New York, 1966; P. Baran and P. Sweezy, "The Political Economy of Growth", MR Press, 1957; and A. Quijano Oregon, "Redefinicion de la Dependencia y Marginalizacion en America Latina", Centro de Estudios Socio-Economicos, Universidad de Chile, Santiago de Chile, 1970; and "Nationalism and Colonization in Peru: A study in New-Imperialism", MR Press, N.Y., 1971.

7) See "Karl Marx's Contribution to Historiography", by E. J. Hobsbawm, in IDEOLOGY IN SOCIAL SCIENCE, ed. by Robin Blackburn, Fontanta, 1978, pp. 265-283.

8) See Karl Marx, "Pre-Capitalist Economic Formations" (Lawrence and Wishart, London 1964), "Grundisse" (Penguin Books, London, 1973), "A Contribution to the Critique of Political Economy" (Progress Publishers, Moscow, 1977), "Capital", Vols. I, II and III (Progress Publishers, Moscow, 1975). And Marx-Engels, "The German Ideology" (Lawrence and Wishart, London, 1964).

9)See "On the Basic Concepts of Historical Materialism", by Etienne Balibar, in "Reading Capital", NLB, London, 1972, pp. 199-308; " The Origins of Capitalist Development: A Critique of Neo-Smithian Marxism", by Robert Brenner, NEW LEFT REVIEW, No. 104, July-August 1977, pp. 25-92; "Les Alliances de Classes", by Pierre Philippe Rey, Maspero, Paris, 1973; "From Reproduction to Production", by Claude Meillassoux, in ECONOMY AND SOCIETY, Vol. 1, 1972, pp. 93-105; " The Concept of the 'Asiatic Mode of Production'" and "Marxist Models of Social Evolution", by Maurice Godelier, included in "Relations of Production, Marxist Approaches to Economic Anthropology", edited by David Seddon, Frank Cass, 1978; "Marx and the Third World", by Umberto Melloti, MacMillan, London, 1977; "Pre- Capitalist Modes of Production", by B. Hindess and P. Q. Hirst, Routledge and Kegan Paul, London, 1975; "Concepts of Modes of Production", by T. Asad and H. Wolpe, in ECONOMY AND SOCIETY, Vol. 5, pp. 470-501.

10) The "feudal approach" is tackled by Paul Baran (see his "The Political Economy of Growth", Penguin Books, London, 1973, Ch. 6 and 7, pp. 300-401) and his followers. The "capitalist approach", by Andre Gunder Frank ( see his "Capitalism and Underdevelopment in Latin America", Monthly Review Press, New York, 1979). Both approaches lack scientific rigour in their understanding and definition of feudalism and capitalism as modes of production, therefore, making a triviality of the theories on underdevelopment built upon both concepts.

11) I intend to argue that this social formation was basically structured by a mode of production. This mode of production had a specific structure which I will define in my thesis.

12) Celso Furtado, "Economic Development of Latin America, Historical Background and Contemporary Problems", Cambridge University Press, Cambridge, 1976, p. 14.

13) Solon Barraclough, "Agrarian Structure in Latin America", Lexington Books, London, 1973, pp. 147-148.

14) Charles Gibson, "Spain America", Harper Colophon Books, 1966, pp. 48-67, 127.

15) Ibid., pp. 155-56, 158-59.

16) Luis Mercier Vega, "Roads to Power in Latin America", Pall Mall Press, London, 1969, p. 10.

17) Gilberto Freyre, "The Masters and the Slaves: A Study in the Development of Brazilian Civilisation", A. Knopf, London, 1976, p. 11.

18) J. P. Cole, "Latin America", An Economic and Social Geography", Butterworths, London, 1965, pp. 73-80.

19) Solon L. Barraclough and Arthur L. Domike, "Agrarian Structure in Seven Latin American Countries", in EL TRIMESTRE ECONOMICO, Mexico, April-June 1966, pp. 235-301 (in Spanish).

20) Robert L. Heilbroner, "The Great Ascent", Harper & Row Publishers, New York, 1962, p. 45.

21) J. Stanley and Barbara H. Stein, "The Colonial Heritage of Latin America", New York, 1970, p. 79.

22) See Karl Marx, "Capital", Vol. III, p. 797.

23) S. T. Bindoff, "Tudor England", Penguin Books, London, 1955, p. 16.

24) Barry Hindess and Paul Q. Hirst, "Pre-Capitalist Modes of Production", p. 191.

25) Ibid., p. 250. Hindess/Hirst concept of "surplus product" seems inappropriate to me because it appears as equivalent to rent, and, furthermore, shifts the level of abstraction from the Marxist measure- concept "labour time" to a measure-concept where the product of that labour time is taken into account. In my analysis, I divided, as Marx did, labour time into "necessary labour" ( labour time socially necessary to produce the means of subsistence and reproduction of the direct labourer and his family) and "surplus-labour" (labour time dedicated to produce above subsistence and reproduction level). Therefore, feudal tenant is expropriated of part of his surplus-labour as feudal rent and, mutatis mutandis, feudal rent takes only part of this surplus-labour (Hindess/Hirst's notion of "surplus product").

26) Of course, this tendency (in the sense of potential) to increases in productivity (at the technical level) was constantly impaired by the political needs of the landlord class in order to maintain its dominance over the tenants, and, last but not least, due to the relative isolation of the labourers between themselves, any new invention had a long way to go in order to be known by the whole society (this is a specific feature of small peasant production). Frequently, was more sensible for the landlords to submit the tenants to pay more rent than to increase the productivity in their demesnes or in tenant's land, because that strengthened their role as ruling class.

27) And from the non-labourer's standpoint as well. That is so because the non-labourer had unlimited sources of labour and was the owner of huge latifundia, so any need to increase the production was met by using more labourers and tilling more land. That is, intensive labour as a sensible solution, and not increases in productivity. Therefore, the landlord's profits were determined by availability of labour-power and land.

28) Therefore, in the inner articulation of the FMP a dynamics develops to foster wage labour (employed mainlay by the rich peasants), to put the land in the market, and accumulate money capital. As it were, a dynamics which prepares conditions for the future productive unity of free labour and capital.

29) In the first section I will examine the origin and development of the LAMP at the commercial, mining, industrial and agrarian levels, and its social structure as compared with the Western European FMP.

30) Perry Anderson, "Lineages of the Absolutiste State", NLB, London, 1974, p. 417.

31) Keith B. Griffin, "Reflections on Latin American Development", Oxford Economic Papers, March 1966, p. 6.

32) A. Rosenblat, "La Poblacion Indigena y el Mestizaje en America", Buenos Aires, 1954, two volumes.

33) Rene Barbosa Ramirez, "La Estructura Economica de la Nueva Espana/1519-1810", Siglo XXI Editores, Mexico, 1971, p. 126.

34) David Lehmann, "The Agrarian Working Class", included in "Latin America and the Caribbean. A Handbook", edited by Claudio Veliz, A. Blond, London, 1968, pp. 681-689.

35) Included as Appendix V to "Worthington's Report on Argentina", 18th August 1898, pp. P898, XCVI, 523, as quoted in "Latin America and British Trade", by D. C. M. Platt, London, 1972, pp. 232-233.

36) See Woodrow Borah, "Colonial and Contemporary Latin America: Political and Economic Life", in HISPANIC AMERICAN HISTORICAL REVIEW, Vol. XLIII, 1963, pp. 371-394.

37) Ibid.

38) See Note 30

39) See note 15, p. 9.

40) A dramatic demonstration as to how "capitalist development" in our continent (given the unchanged social structure inherited from the LAMP) will accentuate the main characteristics of Latin American underdevelopment can be seen in the late 1960s and 1970s brazilian industrialization ( the "miracle"), after the military coup d'etat against Joao Goulart in April 1964. We must remember that the coup d'etat was staged on behalf of saving Brazil from the "socialist threat". See BRAZIL'S MIRACLE CRUSHES THE POOR, by Jonathan Dimbleby, in The Observer, London, June 3, 1979, p. 8.

(Róbinson Rojas, "Latin America: Blockages to Development", PhD Dissertation, 1984), Pages 1-37, and 261-264.