“How’s business?”
“It’s dead.”
Since 1980 this has perfectly described all of Latin America’s traditional export-based capitalist economies. It is why Latin American economists call this the “dead time.”
Nowhere is it deader than in Peru. Between 1988 and 1991 total Peruvian economic output shrank 30%. By 1991 traditional exports had fallen to one third what they were worth in 1975. Workers’ living conditions were cut in half. The political system shriveled with the economy, as the main parties, each representing a different faction of property, failed to figure out how to get the world market to accept its commodities. Even the traditional “Left” tried. Bankrupt ideas, bankrupt economy—they go hand in hand.
But it is not true that capitalism doesn’t work at all in Peru. Only traditional capitalism is in crisis. The capitalists are able to make one part of their system work—the cocaine business. They just don’t like to talk about it. But cocaine is Peru’s largest industry. Roughly 15% of the entire Peruvian workforce is employed in the coca trade.1 Coca paste
1 Andreas and Sharpe, “Cocaine Politics in the Andes,” in Current History, February, 1992, page 77.
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accounts for anywhere from 33% to 70% of the country’s total exports (estimates of the value of this illegal export naturally vary.)2 Drug trade dollars finance Peru’s imports.3 Drug trade dollars are soaked up by the Peruvian Central Bank and the rest of the government owned banking system to the tune of up to US$4.7 billion per year, and are used by the government to service the country’s US$21 billion foreign debt (principally to pay USA banks)4 and as collateral for more loans.
Imagine what it must be like to be a worker forced to earn a living in Peru. If you are not a farm worker or a miner you have to live in Lima. That is where the capitalists have put the jobs. Nearly everything manufactured in Peru is produced in Lima. Lima is also the national capital and most of the white collar jobs are located there as well. So Lima is bursting at the seams. From a population of just under 230,000 in 1920, Lima mushroomed to 2.4 million by 1964. But that is nothing. In the next 25 years the business system forced another nearly 5.5 million working people to move to Lima to try to earn a living.
Today nearly eight million (almost all desperately poor workers) are jammed into Lima and more keep arriving every day in a search for paid work. They are forced to live in a series of shantytowns, each of several hundred thousand population, thrown up on garbage dumps, or on any bit of vacant land they can seize. There is no housing, no schools, no sewers, no public transport, no garbage collection, no electricity, no indoor plumbing, and—because Lima is in the middle of a desert—no water. And, of course, despite the workers’ needs and hopes, there are no jobs. Unemployment and underemployment for Peru as a whole is over 90%.
Lima’s poor cannot even afford charity. A typical network of soup kitchens in one shantytown (called Villa El Salvador) gets its food from U.S., Spanish, Cana-
2 Phillip Smith, “Grappling with SHINING PATH,” in New Politics, December 1991, page 95.
3 U.S. Department of Commerce, Peru, U.S. Government Document 1234C, 1991, page 12.
4 Andreas and Sharp, ibid, page 78.
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dian and Italian “aid” agencies. Despite the fact that it gets free food, the soup kitchen network scandalously and outrageously charges 30 cents a meal. This may seem cheap, but it isn’t. The network’s manager told the New York Times, "Eating in a soup kitchen is becoming a luxury. About 65 percent of Villa’s population [which is 320,000] eat in soup kitchens. A lot of the rest can’t afford it."5
Still, all things considered, living in Lima is better than living anywhere else in Peru. That is why, outside of Lima, Peru is pretty sparsely populated. Eight million are crammed into Lima. Thirteen million are spread throughout the rest of this immense area.6
Living on the coast (where Spanish-speaking, mostly mestizo workers live, as do black and Chinese workers) is easier than living in the Andean highlands (where mostly Quechua-speaking Indian workers live.) The coastal mestizo workers are paid seven times more than the highland Indian workers. The Indian workers can expect to be dead by the time they are 45; the mestizo workers live a little longer.
If you were forced to earn a living in Peru, you would be trapped in a racist capitalist system which over the years has been dominated by one social class—Spanish speaking, European-cultured, white, Lima-based owners of huge country estates, descendants of the 16th-century Spanish conquerors. This class was dominated first by Spain’s rulers, then by English bankers and finally by U.S. bankers (Italian and Japanese bankers playing a smaller part up to now.)
The Peruvian ruling class made its money by enslaving workers in a racist system and playing ball with the international bankers. If the bankers wanted to lend money to develop phosphate, rubber, cotton or copper exports, the Peruvian rulers obligingly bor-
5 New York Times, April 15, 1992, page 12.
6 Peru is pretty big. It is as big as all of Mexico from the Rio Grande to below Mexico City (an area in which 52 million people live). It is as big as Belgium, the Netherlands, France, Italy and Germany combined (where 213 million people live.) It is as big as all the eastern states of the USA from Maine to Florida put together, with West Virginia and Tennessee thrown in (where 96 million live.) It is as big as the West Coast of the USA-Washington, Oregon and California, with half of Arizona added (an area where 35 million live.)
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rowed the money and had their workers expand phosphate, rubber, cotton or copper production until the bottom fell out of these markets. (This had no connection with the needs of Peru’s working people. For example, these huge farm-owners always imported food since it was more profitable for them to grow cotton for export than to grow food to eat. This raised the price of food sky high, but that didn’t bother the land-owners—they could afford it. Only the farm workers starved.) When the bankers wanted to lend money to build unnecessary railroads, the Peruvian rulers borrowed the money and their workers built railroads to nowhere. (But no road or rail system adequate for the Peruvian working people’s needs for transport and communications was ever built.) It was in this way, by borrowing for projects whose only benefit was the profits they produced for the elite, that the government built up a US$21 billion foreign debt.
In the view of the U.S. government, "It is a fact of life that…the country is on the edge of disaster."7 Are they kidding? The Peruvian working people have long been buried in disaster. But it is the business class, not the working class, that is the U.S. government’s concern. The “disaster” the U.S. government is worried about is communism. What the U.S. officials mean is that if the breakdown of traditional capitalism alone could produce a communist revolution, there would be one in Peru.
But as it happens, a communist revolution requires communists. That doesn’t mean anyone who chooses to call himself or herself a communist. It means Marxist-Leninists organized in a party with correct ideas of what communism is and of how working people can transform their ideology and take steps to reorganize their society from capitalist to communist. Is there such a party, with such a line, in Peru? (Communists are not like Christian evangelists, who can promise anything they want in heaven. The evangelists will never be tested. No one will ever be able to prove they are wrong. But communists who win power have about twenty years to make good on their plans. If you do the wrong things, a new exploitative class structure emerges, and you are back to square one.)
7 U.S. Department of Commerce, ibid, page 11.
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A BRIEF HISTORY OF SHINING PATH
Now, since May 17, 1980 there has been an armed revolt in Peru led by an organization calling itself the Communist Party of Peru, but known more popularly as the Sandero Luminoso, or SHINING PATH.8 SHINING PATH claims it now rules “liberated areas” in which 30% of the Peruvian people live. [Comments by representatives to the CPP leadership at a meeting with a PLP delegation in February, 1992] This achievement cost some 24,000 lives (most murdered in cold blood by the reactionary government army and its death squads.)
The SHINING PATH originated in 1959, when a group of young professors teaching at the university in the southern mountain city of Ayacucho joined the Peruvian Communist Party’s regional committee. One of them, Abimael Guzman Reynoso (SHINING PATH’s future “President Gonzalo”), a philosophy professor, and later Dean of the Faculty, became chairman of the Party regional committee. Guzman soon formed a secret group within the Party, which called itself the “Red Faction.”
In 1964 the Peruvian party split, with a smaller group (including the leadership, which historically had close ties with the Communist Party of the U.S.) supporting the Soviet party, and the larger part supporting the Chinese. The “Red Faction” allied with the pro-China party.
Guzman spent most of 1965 in China studying the Chinese Communist Party’s then current political line and military tactics, returning to Peru determined to carry out this strategy.
Within a few years the “Red Faction” had secured a base in the student federation and among the faculty in Ayacucho. It helped organize an Ayacucho municipal federation of community organizations and helped lead a massive regional movement against government plans to eliminate free education. […]