Contradictions International carried an article by Stuart Piper on the progress of HEARSE and DAVE PACKER put an alternative view of the have been transformed, our analysis should ducers in Nicaragua's mixed economy is much start from the structure of ownership and con- greater than is generally considered to be the case creation of a strong state sector — Nicaragua lutionary Nicaragua has a much smaller state agriculture and manufacturing — the two main reforms, private capital predominates. In agri-
STUART PIPER'S ARTICLE in the last issue of International entitled 'Land Reform and the Nicaraguan Revolution' was interesting and informative.' But we cannot agree with the main thrust of his analysis, nor with his political conclusions which sanction the Sandinista stratègy of the 'mixed economy'.
We agree with comrade Piper that it is easy for armchair theorists to take potshots at a revolution confronted with practical difficulties which affect the lives and future of millions. Yet we should be careful how we employ this argument, for it has been utilised against all critics of 'actually existing revolutions' - that they are sectarian nit-pickers sniping from the sidelines. For Marxists, unconditional solidarity with developing revolutions does not mean abandoning debate and criticism. The context: a revolution under seige Daily, the Reagan administration increases its counter-revolutionary offensive against Nicaragua, with the aim of overthrowing the FSLN. The US-backed contra war and trade embargo have wreaked havoc on the Nicaraguan economy. Inside tiny Nicaragua 250,000 have been displaced and at least 12,000 killed. The contra war has forced the FSLN to allocate 50 per cent of the federal budget to defence and shift 20 per cent of the country's labour force to defence-related activities.
But the revolution has not been toppled and the FSLN has taken important steps forward. The workers and peasants have been armed 300,000 rifles have been distributed. The Sandinistas have encouraged the organisation of the masses, organised free elections, carried out a literacy campaign and made improvements in health and welfare provision. The government took further measures at the beginning of 1986 to deepen the land reform. These advances have given the Nicaraguan workers and peasants the courage to endure and fight on.
Nonetheless, the us policy of wearing down the revolution has resulted in an acute economic crisis. Although the majority of people are still enthusiastic for the revolution, the living standards of the masses are falling. History shows us that enthusiasm cannot be maintained by mobilisation and education alone. As the Nicaraguan economy deteriorates signs of fatigue and apathy have surfaced among significant sections of the population. Some have taken a neutral stance towards the government and search for individual solutions: the so-called 'informal' economy now represents some 20 per cent of economic activity. Others have begun to take their own class and sectoral demands onto the streets. The growing discontent in the countryside has led, as Piper indicates, to peasant mobilisations against government policy.
The deterioration of the economy is not simply due to outside factors. Certain political choices made by the FLN have contributed to this situation: most importantly the FSLN'S commitment to the 'mixed economy' and the alliance with the so-called 'patriotic' bourgeoisie.
In his article, Piper minimises the economic sacrifices made by the Nicaraguan masses for this alliance. Neither does he explore the very dangerous consequences of continuing it. Moreover, he argues on the basis of his analysis of the land reform that 'the property relations in 24 Nicaragua have been transformed'. We disagree.
Nicaragua of the mixed economy Harvesting maize on a privately-owned farm The analysis of post-revolutionary states has often been the occasion for dispute among Marxists. The last issue of the Nicaraguan revolution. In a detailed response, PHIL Sandinista strategy. 'The property relations have been transformed'? To examine the idea that property relations trol of the Nicaraguan economy. Our assertion is that while important changes have taken place since the revolution — especially in the emains a dependent capitalist economy domi ated by the bourgeoisie. The facts and figure on this are widely available and flatly contra- dict Stuart Piper's assertion that 'the "revolu- tionary bloc" provides three quarters of the country's output'. In an excellent and detailed book on the Nicaraguan revolution Carlos Vilas and Ri- chard Harris conclude: 'If large, medium and small producers are com- bined, the private sector today accounts for private owners and producers. approximately 60 per cent of the GDP. And ir
Cavendish/ Refle:
roductive sectors of the economy — private pro
lucers generate 79 and 69 per cent respectively o the GDP. Thus the importance of private prooutside the country. Actually the structure of property in Nicaragua is not very different from that in various countries in Latin America (tor example the Dominican Republic). In fact, revosector than Peru did under the reformist military regime of General Velasco, Argentina under the populist regime of Peron or Chile under AllenThe key indicators of the Nicaraguan economy are the structure of land ownership; the pattern of ownership and production inside manufacturing; and ownership and control in 'agribusiness' and agriculture for export. Each of these sectors show a strong domination of the
In land ownership, despite the various land
INTERNATIONAL No 7 November/December 1986
culture, 54 per cent of production is by large and medium land owners. It is important to grasp what the terms 'large' and 'medium' mean. Harris and Vilas explain: 'In Nicaragua the large producer is the coffee grower who cultivates more than 500 manzanas (one manzana = 1.72 acres) of land, the cotton grower with more than 65 manzanas of land, the rancher with more than 1000 manzanas dedicated to livestock or the manufacturer who employs more than 100 workers. Medium producers are agriculturalists who possess from 50 to 500 manzanas, of cotton or food crops, ranchers with 200 to 1000 manzanas dedicated to livestock, finca (estate owners) with 15 to 65 manzanas of coffee or manufacturers who employ between 30 and 50 people. Small producers are members of the economically active population who produce their own means of production but fall below the minimum given for medium producers? 3 By these definitions the 'medium' therefore can be someone who owns 860 acres of cattle-rearing land. Forgive us if we don't put them in the 'revolutionary bloc! By and arge they are small capitalists (but not the petty-bourgeoisie).
21 per cent of farming produce is produced by, the state sector, and 25 per cent by small individual producers, who, of course, also consume part of what they produce. It is clear from these figures that agricultural production for sale, and especially for export, is dominated by large privately-owned farms and ranches.
In January 1985 the Nicaraguan government made important changes in the 1981 Agrarian Reform Law, making access to the land easier for the poor peasants. This was partly a response to the land occupations in Masaya province referred to by Piper. The government also hopes, by these measures, to stem the rural exodus to the cities. However, this retorm mainly affects unutilised or underutilised land held by private owners and the redistribution of some of the less efficient state-owned farms originally expropriated from Somoza. It is a real step forward, but it does not overcome the dominant form of agriculture in Nicaragua — oppose the breaking up of the lands of the large capitalist producers. Up to half the 200,000 acres designated for redistribution have come from the state sector.
The capitalist structure of farming is compounded and reinforced by the structure of agri-business. A huge majority of the coffee mills, slaughter houses and cotton mills are in private hands — this sector produces a quarter of the value of all agri-business production.
In Nicaragua's small manufacturing sector, while the state sector produces something like 32 per cent of manufactured goods and there are many small privately-owned workshops, a clear majority of the production is in enterprises employing over 30 workers, and private enterprises employing over 100 workers themselves produce more manutacturing goods than the entire state sector.
To summarise this point: private capitalist production dominates agriculture, agribusiness and manutacturing. Moreover, this is not just proven by statistics, but is a question of weight in overall production, and proporcion of production tor distribution and sale. Indeed the figures for private production in many countries which everyone calls 'capitalist' are smaller than in Nicaragua. INTERNATIONAL No 7 November/December 1986
Priority to financing the bourgeoisie Nicaragua is in an acute economic crisis, primarily because of the counter-revolutionary contra war, and the economic blockade operated by us imperialism. The support and enthusiasm of the masses for the revolution will be maintained mainly through the material gains which the revolution brings and an understanding that the hardships of the war are being shared fairly There are two obstacles to such an understand. ing: the fact that distribution is in private hands, and that traders and entrepreneurs are making big profits by hoarding at the expense of the masses is one. The second is the priority in the state subventions and financing given the Piers Cavendish/ Refle, Piers Free market fruit and vegetables in Matagalpa private sector. The question is wby, and on this hangs the whole economic-political strategy of
The basic strategy of the FSLN is to cement a bloc with the so-called 'patriotic' bourgeoisie. This involves giving certain economic guarantees to this class at the expense of the state sector and the masses.
The rationale for this has been to stop the bourgeoisie going over the counter-revolution and to ensure that the bourgeoisie continues to
'private capitalist production dominates
agriculture, agri-business
Tand manufacturing' invest and produce. The results have been, forgive the pun, mixed. The bourgeoisie has not actively gone over to the counter- revolution. On the other hand the 'patriotic' bourgeoisie has not fulfilled its part of the bargain regarding investment and production. It has only been concerned with immediate protits, rather than long-term investment, and has thus adopted a wait-and-see attitude towards the revolution. There are decreasing returns from
the 'alliance' with the 'patriotic' bourgeoisie.
In an article quoted approvingly by Piper, Carlos Vilas puts the question in the following way: 'In the final analysis, it is appropriate to look at the political and economic cost, in this class war, of the policy of subsidising a class, or elements of t, which by failing to play their part in the proluctive sphere are preparing the ground on which the enemies of the revolution operate ... The period shows the reluctance of most fractions of capital to undertake commitments that guaranteed their integration in the construction stage, at considerable cost to economic growth and the well-being of the masses." Consequently, genuine national planning the economy is made very difficult and also the material basis of the country's national defence is undermined. Many comrades in the Marxist movement internationally argue that the national war of defence against the contras and imperialism must be waged before the class war internally can be waged. But this forgets a basic lesson, which the Marxist movement certainly knew at the time of the Spanish revolution, that the 'national' war against counter-revolution can be lost if the material interests workers are sacrificed to unity with the bourgeoisie. A long-term mixed economy? There is no way of knowing to what extent the contradictions of the mixed economy are the subject of debate within the FLN leadership itself, or viewed by the workers of Nicaragua. Tomas Borgé has made reference in his speeches to the tact that sections of the workers think that the bourgeoisie should be frontally attacked, and that the project of the FLN is illunderstood by many sections of the popular masses. But the overall line of the FLN is clear and unambiguous — for a long-term mixed economy as the strategic way forward. This has been explained dozens of times; the following quote from Jaime Wheelock, one of the nineperson ESLN directorate, is typical: 'Here what has to be posed theoretically whether it is possible that the bourgeoisie simply produce, without power, that they limit themselves as a class to a productive role. That is, that they limit themselves to exploiting their means of production to live, not as instruments of power, of imposition. I think it is possible in Nicaragua we have not abandoned the search for forms in which we can integrate the more or less big individual producers who live in Nicaragua today into a social formation dominated by revolutionaThis is the essence of the mixed economy theory boldly explained. We have to say frankly that theoreticallv this position is nonsense. Over any long period of time the bourgeoisie is bound to try to transform its economic strength into political strength and challenge the political domination of the revolutionaries. The dangers were accurately sketched in the early days of the revolution by Charles-Andre Udry: 'A "slow transition" combining a "mixed" (ie capitalist) economy with the strengthening of the mass organisations (trade unions, CDSs, militia) can certainly be sketched on paper. But it will not stand up to the clash of social forces. It will be necessary to cut the Gordian knot and break the alliance with the bourgeoisie — a course that, given the shortage of technical skills, does not :25
involve abandonment of the integration of technical staff. If the break is not eventually made the bourgeoisie will settle comfortably into its position and even find 'independent thinkers' within the FSIN? But how does expropriating the bourgeoisie work itself out in practice? What are the real practical problems involved? The dilemma of the FLN can be sketched as follows. The present situation combines the contra war and the offensive of us imperialism, with a disloyal patriotic' bourgeoisie, and falling living standards of the masses. Given Nicaragua's dependence on the world market for its agricultural exports and the lack of investment by the bourgeoisie, neither prices nor investment can be planned. Discontent, and a drop in the revolutionary mobilisation of the masses are threatening dangers. The advantages of breaking with the bourgeoisie are that real economic planning will be easier, and the real revolutionary mobilisation of the masses can be enormously deepened, especially in the countryside. The case of those who oppose a break with the bourgeoisie can be summarised as follows. First, it will disrupt the economy, they say, because only the bourgeoisie have the skills to run it. Second, it will isolate Nicaragua internationally and leave it more open to imperialist attack. Third, it will increase the dangers of bureaucratic degeneration through increasing the directive role of the state in a period of economic scarcity.
'the US-backed contra war
has wreaked havoc on the
Nicaraguan economy'
An argument often used by the FSLN themselves, explained in detail by Borgé, is that the geo-political situation of the revolution excludes new measures against the bourgeoisie. In other words, Nicaragua is dependent on the goodwill of international social democracy, friendly' imperialist states and so on to ward off us imperialism. This is a very weak argument, because the brute fact of the matter is that Nicaragua's international friends have little influence with the us in this matter. The main obstacle to an all-out Us attack is domestic opposition to the us in getting involved in a very bloody counter-revolutionary war. In the last analysis, European imperialism and social democracy will not, and is not now, capable of preventing the us conducting the contra war and exercising whatever counter-revolutionary options it thinks it can get away with inside the us. Moreover, the FSLN cannot allow their internal policies to be dictated by international 'friends' because to do so, ultimately, means to accept the indefinite maintainence of a capitalist economy - with terrible consequences: either an increased base in Nicaragua for counter-revolution, or a sharpening of the internal class struggle as the masses mobilise against the bourgeoisie and the speculators. In the latter case, to accept the blackmail of international imperialism will involve the necessity of suppressing the masses, to defend the bourgeoisie and the mixed economy.
Workers democracy?
Another problem with comrade Piper's article 26 is its tendency to minimise the problems of
workers democracy in Nicaragua. The danger of bureaucratic degeneration if the big bourcourse. A bureaucratic workers' state could be the result. This depends on the degree of the self-organisation of the masses, and whether there exists workers' control and the self-government of the masses. From this point of view, it has to be said that in Nicaragua today all power is concentrated in the FSLN (a small party of just a few hundred members) and its nine-person directorate. The Committees for the Defence of the evolution have been withering away, prec sely because they have no real decision making powers. Decision-making is essentially top-down. The answer to the danger of Piers Cipendish/ Reflex Queueing for gas. Shortages are a feature of everyday life bureaucratism is not to maintain capitalist economic power, but to extend workers' self-organisation. We cannot accept that 'only the bourgeoisie' have the skills to run the economy. Of course, all other things being equal, it might be better to have a long period of transition to train the masses in technical skills. But, the economy is being sabotaged here and now by the bourgeoisie. Neither can it be accepted that only the bourgeoisie have the skills to run the ranches, the plantations and the coffee mills. This, of course is exactly the argument of the bourgeoisie itself.
What is true, is that it is very difficult to find a purely Nicaraguan solution to the problems of the Nicaraguan economy and the advancement of the revolution. Stuart Piper rightly notes, that, in the end, only the extension of the revolution provides a strategic way out. Outside economic aid will be a crucial component of economic advance, and in this the USSR is crucial. The ussr is dishing out its aid with an eye-dropper, however, and this is unlikely to change in the short term. The basic dilemma The Nicaraguan revolution is seven years old
Because of the relative weakness of the bour-
geoisie, it has been able to continue without
expropriating the bourgeoisie for a long pe-
riod. It is now clear, however, that the limits of the mixed economy are being reached. It is our contention that the mixed economy cannot be prolonged indefinitely, and the skills of the FSLN are incapable of indefinitely evading the contradictions which it brings. If the FSLN tie themselves to permanent defense of the mixed economy then they will more and more openly have to defend the economic power of the bourgeoisie against the Nicaraguan masses. This is the implacable logic of the situation. Those who say that expropriating the bourgeoisie is impossible are really saying that a socialist solution is impossible in a small, economically backward country like Nicaragua. If you openly say that, then you say that the Nicaraguan state is destined to become the defender of continued capitalist relations, to become a semi-colonial bourgeois state, with a bourgeois nationalist leadership, like Angola or Mozambique. This would be a truly tragic outcome to the Nicaraguan revolution. In our view, however, there is another alternative for Nicaragua and the FSLN, and that is to take the road of the Cuban revolution in breaking with the bourgeoisie - even though the Cubans themselves advise against it. Doing what the Cubans did will be better than doing what the
Many comrades in the Marxist movement internationally have pointed out, justice, that the workers and peasants can take power in a particular country without imme-
'We cannot accept that only
the bourgeoisie has the skills to run the economy' diately socialising the means of production. Indeed, there is no automatic timescale for breaking the economic, as opposed to the political, power of the bourgeoisie. But every state is a state which, in a historical sense, defends given relations of production. Paradoxically, therefore, the Bolsheviks who took power in 1917 but did not socialise the major means of production until 1918, in a 'historical sense defended collective property right from the time they took power. Despite the pertectly
correct disavowel of artificial timescales, It 1s impossible to 'historically' defend socialised property relations while maintaining a schema for the indefinite maintainance of a mixed economy. This is the 'Gordian knot' which the Sandinistas have to cut. Footnotes 1 Stuart Piper, Land reform and the Nicaraguan Revolution, International, No 6 (September/ October 1986). 2 Richard Harris and Carlos Vilas, Editors. Nicaragua — a revolution under seige. Zed Press 1985, p 43. 3 Ibid. 4 Ibid. 5 Carlos Vilas, 'Nicaragua: the fifth year -transformations and tensions in the economy',
Capital and Class number 28, Spring 1986 6 Jaime Wheelock, in Nicaragua - the Sandinista Peoples Revolution, Pathfinder Press 1985, * Sharies
Charles-Andre Udry, 'Aquis et contradictions
de la revolution', Inprecor no 72/73, March 1980,
quoted in Henri Weber, The Sandinista Revolu-
tion, Verso 1981, p 70.
INTERNATIONAL No 7 November/December 1986