Louis Proyect: The Unrepentant Marxist

April 13, 2016

Nicaragua’s industrialists? Say what?

Filed under: nicaragua — louisproyect @ 10:03 pm

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Louis Proyect in Managua, November 1984

When I noticed that Bhaskar Sunkara had tweeted a link to a Jacobin article titled “Ortega’s Betrayal” written by Jonah Walters, I concluded immediately even before reading it that the author was a member of the International Socialists Organization (ISO). As Jason E. Smith had noted in a Brooklyn Rail article titled “Let Us Be Terrible: Considerations on the Jacobin Club”, the magazine had begun to feature articles by members of the group: “While it has always toyed with the disaffected liberals on the fringes of the Democratic Party, more recent contributors have included writers and cadre with primary allegiance to Trotskyist organizations, like the ISO…”

I don’t have any big problems with ISO members writing for Jacobin. Most are very bright graduate students and junior professors with a lot on the ball. Unfortunately, Jonah Walter’s article on Nicaragua was the ISO at its worst. As is customary for groups coming out of the Trotskyist movement, they see their role as the political and moral conscience of the left. If you are looking for take-downs of Alexis Tsipras, Daniel Ortega, Hugo Chavez or Fidel Castro for failing to lead successful revolutions from below, the ISO press is the place to go. As Peter Camejo once told me in the early 80s, groups like the SWP and the ISO are always beyond reproach because they have never been put in a position of power that would test their ability to live up to their own lofty ideals.

Walters, who is not identified as an ISO member on Jacobin (it is entirely possible that he is no longer a member of the group whose revolving door probably spins no more rapidly than any other Leninist group), is not entirely clear whether Ortega was a Judas goat from the beginning or only after he was reelected in 2007 as a remodeled neoliberal. Consistent with the ISO analysis of Venezuela, Walters pins his hope on dissidents to the left of Ortega including Mónica Baltodano who is a leader of the “explicitly socialist” Movement to Rescue Sandinismo. She would seem to play the same role as trade union militant Orlando Chirino played in a number of articles in the ISO press as a leftist foil to Hugo Chavez. Perhaps I am nothing but a sinful opportunist but I lost the appetite for writing these sorts of articles long ago.

Rather than trying to defend the post-2007 Ortega (an impossible task), I want to turn my attention to the first part of the article in which he seems to be located in limbo rather than inferno. Walters believes that the FSLN of the 1980s was “an inspiration for a generation of leftists” and that “Whatever their shortcomings, they became a shining example of successful revolutionary politics.” I guess I am one of the generation of leftists Walters is referring to since I was the president of the board of Tecnica, an organization that recruited engineers, programmers and other skilled people to work with Nicaraguan government agencies.

In that capacity, I got frequent reports on the Nicaraguan economy from Michael Urmann, Tecnica’s founder and executive director, who met regularly with Paul Oquist who was Ortega’s chief economic adviser. In addition to that, I paid very close attention to the left press at the time, including NACLA Reports and other print publications (the Internet was still in its early stages as an alternative media source.)

Daniel Ortega’s original sin appears to be adopting the economic program for Nicaragua associated with the Tercerista tendency in the FSLN, one that conceived of socialism being built on the basis of a class alliance between peasants, workers and the anti-dictatorship bourgeoisie. I don’t want to dwell on this but there is strong evidence that the three tendencies in the FSLN had overcome their differences by the time they had entered the final stage of the battle with Somoza. For more information on this, I recommend George Black’s “Triumph of the People: The Sandinista Revolution in Nicaragua”. The only fighters in Nicaragua who were determined to “go all the way” against the bourgeoisie were a detachment of Nahuel Moreno’s Fourth International and utterly devoid of a broad social base.

What really got my attention was Jonah Walter’s claim that “Once in power, the FSLN established a mixed economy — without the capacity to organize production on a national scale, the government depended on industrialists with deep pockets to invest in domestic production.”

Depended on industrialists with deep pockets? What the fuck is he talking about? I understand that Walters was probably born after Daniel Ortega was voted out of office in 1990 but this is no excuse for getting the Nicaraguan economy so wrong. Anybody who visited Managua in the 1980s would realize almost immediately that there was no industry to speak of.

Nicaragua was primarily an agroexport country (could Walters possibly be thinking that a cattle ranch was an industry?) but there was some industrial growth in the 1960s, largely in processed foods, chemicals, and metal manufacturing according to Wikipedia but the 1972 earthquake that was centered in Managua utterly destroyed it. About 2,500 small shops engaged in manufacturing and commercial activities were wiped off the face of the earth and about 90% of the buildings in Managua were left unstable.

Anybody who visited Managua could not help but notice this. Cattle and goats roamed the streets of Managua and people squatted in the ruins of buildings in the downtown area. The largest “industries” as far as I know were the locally brewed beer and rum that were always something to look forward to in the evening after a long day spent in a government agency training people.

Nicaragua gained most of its foreign revenue through the export of sugar, cotton, coffee, beef and lumber but hardly enough to keep the country afloat during Reagan’s war on the country. The GDP of Nicaragua in the late 80s was about the same as the annual sale of American blue jeans. As far as “industrialists with deep pockets” is concerned, I have no idea what this could possibly mean in a country like Nicaragua that was the poorest in the Western hemisphere after Haiti. Couldn’t Jonah Walters have taken the trouble to do a little research before he wrote such an ill-informed article? After all, he is identified as a Jacobin researcher.

Back in 2004, I wrote an article for Revolution Magazine in New Zealand that was a reply to ISO leader Lee Sustar on Nicaragua. Since it was written before I began blogging, it is worth reposting here:

Nicaragua 25 years later: a reply to Lee Sustar

Twenty-five years ago, the FSLN seized power in Nicaragua. Although it is difficult to see this abjectly miserable country in these terms today, back then it fueled the hopes of radicals worldwide that a new upsurge in world revolution was imminent. Along with Grenada, El Salvador and Guatemala, where rebel movements had already seized power or seemed on the verge of taking power, Nicaragua had the kind of allure that Moscow had in the 1920s.

So what happened?

While nobody would gainsay the political collapse of the FSLN after its ouster and troubling signs just before that point, it is worth looking a bit deeper into its rise and fall. There are strong grounds to seeing its defeat not so much in terms of its lacking revolutionary fiber, but being outgunned by far superior forces. With all proportions guarded, a case might be made that Sandinista Nicaragua had more in common with the Paris Commune than the Spanish Popular Front, which was doomed to failure by the class collaborationist policies of the ruling parties.

You can get a succinct presentation of this analysis from Lee Sustar, an ISO leader who contributed an article to Counterpunch titled “25 Years on: Revolution in Nicaragua.” He states:

While the U.S. and its contra butchers are to blame for the destruction of the Nicaraguan economy, the contradiction at the heart of the FSLN’s politics was instrumental in its downfall. FSLN leaders couldn’t escape the centrality of class divisions in the ‘revolutionary alliance’–the fact that workers and ‘nationalist’ employers had contradictory interests.

The conditions of workers had deteriorated throughout the 1980s as runaway inflation wiped out wage gains. Workers participated in Sandinista unions and mass organizations–but they didn’t hold political power, and their right to strike was suspended for a year as early as 1981. This allowed the opportunistic Nicaraguan Socialist Party–a longtime rival of the FSLN–to give a left-wing cover to Chamorro’s coalition, which in turn functioned as the respectable face of the contras.

With respect to the failure of the FSLN to align itself with workers (and peasants, a significant omission in Sustar’s indictment), Washington seemed worried all along that bourgeois class interests were being neglected and that Nicaragua was in danger of becoming “another Cuba.” Of course, since Cuba never really overthrew capitalism according to the ISO’s ideological schema, this might seem like a moot point. In any case, it is often more useful to pay attention to the class analysis of the State Department and the NY Times than it does to small Marxist groups. If the ruling class is worried that capitalism is being threatened in a place like Nicaragua, they generally know what they are talking about.

Virtually all the self-proclaimed “Marxist-Leninist” formations, from the Spartacist League to more influential groups like the ISO, believe that the revolution collapsed because it was not radical enough. If the big farms had been expropriated, it is assumed that the revolution would have been strengthened. While individual peasant families might have benefited from a land award in such instances, the nation as a whole would have suffered from diminished foreign revenues. After all, it was cotton, cattle and coffee that was being produced on such farms, not corn and beans. When you export cotton on the world market, you receive payments that can be used to purchase manufactured goods, medicine and arms. There is not such a market for corn and beans unfortunately. Even if the big farms had continued to produce for the agro-export market under state ownership, they would have been hampered by the flight of skilled personnel who would have fled to Miami with the owners. Such skills cannot be replicated overnight, especially in a country that had suffered from generations of inadequate schooling.

While all leftwing groups that operate on the premise that they are continuing with the legacy of Lenin, virtually none of them seem comfortable with the implications of Lenin’s writings on the NEP, which are crucial for countries like Nicaragua in the 1980s or Cuba today, for that matter. In his speech to the Eleventh Congress of the Communist Party in 1922, Lenin made the following observations:

The capitalist was able to supply things. He did it inefficiently, charged exorbitant prices, insulted and robbed us. The ordinary workers and peasants, who do not argue about communism because they do not know what it is, are well aware of this.

But the capitalists were, after all, able to supply things—are you? You are not able to do it.’ That is what we heard last spring; though not always clearly audible, it was the undertone of the whole of last spring’s crisis. “As people you are splendid, but you cannot cope with the economic task you have undertaken.” This is the simple and withering criticism which the peasantry—and through the peasantry, some sections of workers—levelled at the Communist Party last year. That is why in the NEP question, this old point acquires such significance.

We need a real test. The capitalists are operating along side us. They are operating like robbers; they make profit; but they know how to do things. But you—you are trying to do it in a new way: you make no profit, your principles are communist, your ideals are splendid; they are written out so beautifully that you seem to be saints, that you should go to heaven while you are still alive. But can you get things done?

If the Bolsheviks required a return to some elements of capitalism in 1922 in order to “help get things done,” why would anybody expect the FSLN to do otherwise? In 1922, the Bolsheviks ruled over a country that had wiped out their own contras decisively and secured its borders. By comparison, Nicaragua was like a sieve with armed terrorists backed by the USA infiltrating freely from North and South. The Soviet Union was also a major economic power, despite being ravaged by war. With an immense population and an abundance of coal and iron ore, it had the ability to produce its own heavy capital goods. Nicaragua, by comparison, had a population about the size of the borough of Brooklyn and no industry to speak of.

Despite all these relative advantages, the Bolshevik leaders feared for the survival of the Soviet Union unless it received help from victorious socialist revolutions in the more advanced European countries. In “Results and Prospects,” Trotsky wrote:

But how far can the socialist policy of the working class be applied in the economic conditions of Russia? We can say one thing with certainty–that it will come up against obstacles much sooner than it will stumble over the technical backwardness of the country. Without the direct State support of the European proletariat the working class of Russia cannot remain in power and convert its temporary domination into a lasting socialistic dictatorship.

With a GDP equal to the size of what US citizens spend on blue jeans each year, how would Nicaragua have managed to forestall the fate that Trotsky predicted for the USSR? Indeed, whatever the faults of Stalinist Russia, it could always be relied on after a fashion to provide material aid for postcapitalist countries like Cuba or Vietnam that were under siege. It was Nicaragua’s misfortune to have come into existence at the very time that such protections could no longer be guaranteed, even when doled out like from an eyedropper.

In October 1988, Soviet Foreign Ministry official Andrei Kozyrev wrote that the USSR no longer had any reason to be in “a state of class confrontation with the United States or any other country,” and, with respect to the Third World, “the myth that the class interests of socialist and developing countries coincide in resisting imperialism does not hold up to criticism at all, first of all because the majority of developing countries already adhere or tend toward the Western model of development, and second, because they suffer not so much from capitalism as from lack of it.” It is safe to assume that high-level Soviet officials must have been talking up these reactionary ideas to the Sandinista leadership long before Kozyrev’s article appeared.

These new ideas benefited US foreign policy needs in a dramatic way. In early 1989, a high- level meeting took place between Undersecretary of State Elliot Abrams and his Soviet counterpart, Yuri Pavlov. Abrams made the case that relations between the US and the USSR would improve if the Nicaragua problem somehow disappeared. Pavlov was noncommital but gave Abrams a copy of Kozyrev’s article. This telling gesture convinced the Reagan administration that the USSR would now be willing to sell out Nicaragua.

This meeting is described in Robert Kagan’s “A Twilight Struggle: American Power and Nicaragua 1977-1990.” Kagan was a member of the State Department’s Policy Planning Staff in the Reagan years and helped to draft key foreign policy statements, including the document that contained what has become know as the “Reagan Doctrine”. More recently, Kagan has gained attention as part of the gaggle of neoconservatives pushing for war against Iraq last year. His “Of Paradise and Power: America and Europe in the New World Order” basically provided an ideological justification for US unilateralism since the Europeans were seen as epicene appeasers of Evil. Since the reversals in Iraq over the past year or so, Kagan has maintained a lower profile.

Despite the expectations of the ordinary Nicaraguan who voted for the removal of Daniel Ortega, the country was not the beneficiary of US largesse. With the removal of the Soviet Union as a countervailing hegemon, it was no longer necessary to bribe restive populations. Instead of a Marshall Plan, the best that could be hoped for were a few maquiladoras.

In a newly established free trade zone, a textile factory owned by Chentex set up shop. In 2000, a delegation from the United States discovered women who were working 60 hours a week. One woman who was married to another maquiladora employee suffered from conditions that were far worse than those endured under FSLN rule. The December 3, 2000 NY Times quoted one delegation member: “The couple had a 3-year-old daughter with discolored tips of her hair, probably from a protein deficiency. These are people who work 60, 70 hours a week, and their standard of living is just abysmal.” When these workers tried to organize themselves into a union, the bosses attempted to fire them all. Contrary to Lee Sustar, you can be assured that these working people knew the difference between the FSLN’s attitude toward working people and the neoliberal gang in charge right now. The FSLN acted as it did because it had no alternative; the US backed government and its maquila bourgeoisie act as it does because it is sees workers as mules to generate superprofits.

Despite the best efforts of the FSLN to make itself acceptable to US imperialism, its hallowed past still condemns it. When Daniel Ortega ran for president of Nicaragua in 2001 on a tepid social democratic program, Jeb Bush wrote an attack in the Miami Herald. Ortega supposedly “neither understands nor embraces the basic concepts of freedom, democracy and free enterprise”. He added: “Daniel Ortega is an enemy of everything the United States represents. Further, he is a friend of our enemies. Ortega has a relationship of more than 30 years with states and individuals who shelter and condone international terrorism.” The article was immediately reprinted in La Prensa under the headline “The brother of the president of the United States supports Enrique Bolanos” by Ortega’s rivals in the Liberal party. Both the Liberal Party and La Prensa enjoyed CIA funding in the 1980s. One presumes that this is still the case.

If the nightmare of maquiladoras and declining economic expectations is to be reversed, it will come as a result of more favorable objective circumstances in Latin America and Central America generally. With the rise of Hugo Chavez and the continuing resilience of the Colombian guerrillas, that day may be coming sooner rather than later.



  1. FYI I recieved a letter from a German Peace Organization run by the Mennonites. It claims that Turkey is waging war against the PKK and taking no precautions what so ever to shield the civilian population from colateral damage. I guess that I should also let Juan Cole know that as well,

    Comment by Curt Kastens — April 14, 2016 @ 3:24 pm

  2. Please don’t post comments that are not related directly to my articles.

    Comment by louisproyect — April 14, 2016 @ 4:25 pm

  3. AOK feel free to delete the comment. I was just to lazy to send it to your personal email.

    Comment by Curt Kastens — April 14, 2016 @ 9:54 pm

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