65 pages • 2 hours read
Eduardo GaleanoOpen Veins of Latin America
Nonfiction | Book | Adult | Published in 1971A modern alternative to SparkNotes and CliffsNotes, SuperSummary offers high-quality Study Guides with detailed chapter summaries and analysis of major themes, characters, and more.
Index of Terms
Capitalism
Capitalism is an economic system based on the notion that private enterprises control the means of production. In Open Veins of Latin America, Galeano traces the origins of capitalism back to early colonialism in Latin America where the establishment of free trade and mercantilism began a global economic exchange. This opened the doors for foreign private enterprises to capitalize on production of Latin American exports through establishment of plantations, mining sites, and manufacturing plants. This mode of global capitalism allows for foreign corporations to control production from a distance, which means that the workers always bear the most turbulent effects of business decisions. For Galeano, “The nature of ‘satellized’ industrialization is to exclude […] the development of dependent capitalism […] marks many people more ‘surplus’ than it is able to use” (268). The power of capitalism comes from this remote control by foreign enterprises. In the case of Latin America, the satellized industrialization generates an economic dependency between the region and US and Europe. The result is that the workers bear the worst effects of capitalism’s economic instability.
Galeano explores capitalism in Latin America as the relationship between the state, and US and European multinational corporations. According to Galeano:
Multinational corporations make direct use of the state to accumulate, multiply, and concentrate capital, to deepen the technological revolution, to militarize the economy, and by various means to assure success in the crusade to control the capitalist world (248).
While capitalism already privileges private enterprises, the collusion of state and multinational corporations creates greater wealth disparities and exacerbates already tenuous social inequities. Multinational corporations, with the collaboration of Latin American governments, carry out accumulation of capital for US and European enterprises while the Latin American people suffer low wages and mass unemployment. Galeano observes how capitalism has evolved over time for Latin America, which has become further embedded in foreign private deals and continues to struggle to find a way to break free from economic dependency.
International Monetary Fund
The International Monetary Fund (IMF) began in 1945 as an organization consisting of multiple countries across the world that would draw from the resources of the World Bank to address the financial wellbeing, trade relations, and economic growth of each country. While the IMF started with the public intention of alleviating poverty and unemployment in poor countries, such as those with longstanding foreign investments in Latin America, Galeano is critical of its motives. He believes that the IMF provides temporary solutions through loans that poor countries cannot pay back, leading them to be indebted to wealthier loaning countries that then dictate the terms of trade and monetary exchange that serve their benefit. Galeano bitterly writes that the IMF frequently “confuses the fever with the disease, inflation with the crisis of existing structures” (241). Using the metaphor of illness, Galeano illustrates how the IMF treats symptoms of a larger structural issue, which is capitalism and the inequities it creates. The IMF’s refusal to acknowledge the flaws of capitalism ultimately creates greater issues for the marginalized people of poor nations accepting loans through the World Bank.
The IMF also operates in favor of more politically affluent countries such as the US over countries in Latin America. For Galeano, this has a historical precedent. He argues that “The IMF was created to institutionalize Wall Street’s financial dominion over the whole planet, when the dollar first achieved hegemony as international currency after World War II” (241). Despite being a costly war, World War II ushered the US into a more prominent world stage. Its currency value benefited from its global exposure. Thus, the IMF had always exercised a bias towards the US despite its protectionist trade policies. Latin American countries do not possess the privilege of such freedom of control over their own economies as the US always had a say in their political and economic matters. The IMF ensures that the relationship between the US and Latin America remains enmeshed through loans, debts, and foreign intervention.
Latifundio-Minifundio System
The latifundio-minifundio is part of a land tenure system consisting of large commercial estates called latifundios, which are 500 hectares and smaller estates called minifundios, which are under five hectares. The system derives from Europe, drawing from feudalism in which a lord presides over his estate with serfs working his land. In the present-day latifundio-minifundio system that Galeano describes in Open Veins of Latin America, the notion of serfdom has evolved into low wage labor that resembles the conditions of slavery. Galeano writes of the latifundio-minifundio system:
Subordinated by foreign needs and often financed from abroad, the colonial plantation evolved directly into the present-day latifundio, one of the bottlenecks that choke economic development and condemn the masses to poverty and a marginal existence in Latin America today (77).
In his depiction of the latifundio-minifundio, the system operates as a modern-day plantation with foreign investment dictating the means of production and the workers’ standard of living.
As US and European consumption of Latin American goods increases over the years, the latifundio has had to raise production though the workers often do not see higher wages. The advancement of manufacturing technology has eliminated many jobs in the name of efficiency. Thus, Galeano points out the flaw of the latifundio-minifundio system, which is that after a while, the system “not only cannot absorb more labor, but it constantly banishes more people to swell the ranks of the unemployed in city slums” (123). The system always produces a labor surplus, which eventually leads to unemployment.
