Response to Carlos M. Vilas

Against the Current, No. 9, May/June 1987

Ralph Schoenman

CARLOS M. VlLAS ASCRIBES to me with liberal abandon a putative disregard for facts in my article “Their Socialism And Ours” (ATC #7). He scatters pejorative, ad hominem comment twenty-nine times in a scant 1,500 words, fathering upon me a methodology that is his very own.

Readers immune to the Swaggart-style will find instructive Vilas’ claim to heal misapprehension by faith alone, a gift, he intones, deriving from “better access to first-hand information,” but one unnourished by a single footnote or source. ATC readers will respond to evidence they may verify, an approach that revolutionists, as opposed to authoritarians, have been known to prefer.

Vilas represents that my article deals with very broad issues not directly related to Sandinista experience but, rather, to contending tendencies within theories of revolution.

My essay addresses the relationship of socialism to democracy, the nature of the post-capitalist State and the material conditions necessary for a transition to socialism in an impoverished country. It examines these fundamental Marxist concerns in specific relation to the unfolding of the Sandinista revolution. It seeks to show how a pauperized former neo-colony under siege is particularly in need of clear, unmistakable institutions of workers’ democracy, involving real control. It notes the fundamental distinction between a political party and a State apparatus. It cites the uncompromised independence of the working class as the precondition for institutionalizing a revolution. It refers these classic Marxist categories to the State of Emergency, the right to strike and the economic reality in Nicaragua.

Eighty-five percent of the article cites concrete conditions within Nicaragua and their relation to the question of workers’ democracy. Vilas is careful to avoid any political discussion concerning the revolution in Nicaragua.

As I am restricted to 1,500 words, I cannot here refute all of Vilas’ unwarranted charges. I shall do so in another, more open arena. Let us see where Vilas’ half-truths lie.

1) Vilas alleges that Nicaragua is not paying its foreign debt and that comparison of the debt with export earnings is merely a mechanical relation of items in foreign accounts disconnected from real behavior. This is sleight of hand. Foreign accounts consist of income and expenditure; the relation of export earnings to outlay is decisive. In Vilas’ own article (ATC #7) he presents a table which he entitles “Crisis of the External Sector” and makes this very comparison between exports and foreign debt. His data reveal that over a period of five years, exports fell 30% while the foreign debt increased nearly 300%.

This is how, as cited in my article, President Daniel Ortega described the devastating impact of the foreign debt in his speech to the United Nations in October 1985,

“With the blood and the sweat of the people of Nicaragua, we have paid $621 million in debt service in five years. In other words, in five years we have invested the total export of two years to fulfill part of our financial obligations the situation is so grave that, according to studies of the World Bank, when the value of our exports should be billions of dollars annually, we are only exporting $300 million.” (Envio, November 1985)

Yet Vilas insists, “Nicaragua’s disbursements have been merely symbolic Nicaragua is not paying.”

The Washington Post Weekly describes an agreement with private bank creditors for a “one year deferral of $295 million in overdue loan and interest payments;” this, however, refers to the payments on a small portion having little bearing on the overall debt crisis:

“Nicaraguan Ambassador Carlos Tunnerman says, ‘Our political will is to honor all the debts, and we are doing it within our economic capability.’ The rest of Nicaragua’s overall debt of $4.6 billion, which includes government to government loans, is not involved in the rescheduling.” (July 1, 1985)

2) Vilas calls “ridiculous” my assertion that the Nicaraguan State lacks control over the commanding heights of the economy and that, structurally, the economy has not been basically altered.

Here is Vilas’ own comment in his book Nicaragua: A Revolution Under Siege:

“If large, medium and small producers are combined, the private sector today accounts for approximately 60% of the GDP. And in agriculture and manufacturing-the two main productive sectors of the economy-private producers generate 79% and 69% respectively of the GDP. Thus, the importance of private producers in Nicaragua is much greater than is generally considered to be the case outside the country. Actually, the structure of property in Nicaragua is not very different from that in various countries in Latin America (for example, the Dominican Republic.) In fact, revolutionary Nicaragua has a much smaller State sec­ tor than Peru did [sic] under the reformist military regime of General Velasco, Argentina under the populist regime of Peron or Chile under Allende.” (Humanities Press, 1986, 43)

Moreover, in his ATC #7 article, Vilas asserts:

“From 1982 onward, there were deepening difficulties. Export earnings experienced a steep fall and the external debt rose[!]… A black market developed and speculative activities grew. What were the causes of the economic problems? First, a radical drop-off in private capitalist investment ….In an economy in which the government controls only 30% of industrial production and 20% of agricultural production, private capitalist investment is crucial. Private capitalists decreased their investment from 50% in 1979 to 20% of total investment in 1986.” (13)

Vilas draws the very conclusions for which he attacks me:

“The strategy of mixed economy and national unity in which most of investment was in private hands, meant that the capacity of the State to direct development was at all points limited….The result was a production decline, accompanied by a sharp decline in the standard of living of wage workers and farmers. Nor did the government show itself at all capable of controlling the flight of capital, the growth of speculation or the rise of a black market. To make matters worse, the strategy of alliance (with the bourgeoisie) did not even prevent international technical, economic and financial cooperation from falling to minimal levels.” (14)

3) Vilas’ attack upon my description of land distribution to the peasants affords an insight into his technique. He cites my sentence describing the first years of the revolution and then discusses the land reform measures of 1986, deceiving ATC readers by leading them to think that my citation of government data from 1981 to 1984 applies to 1986. In fact, I wrote:

“In response to [peasant] demands, the government announced several new land distributions in 1986 totaling over 200,000 acres. In Region V, 40,000 acres were turned over to poor peasants. A further 135,000 are scheduled to be distributed before the end of the year.” (49)

Without missing a beat, Vilas declares “It is false that 50 % of the land allocated to peasants came from former State farms.”

Vilas wrote the following in his ATC article:

“The peasants got 160,000 mz of land, or about 3/ 4 of the total distributed throughout the whole course of the reform. Almost 213 of the land distributed came from APP-i.e., State sector. (17)

This statement is unqualified. It refers to the entire country. [Editors’ note: In fact, this figure cited by Vilas refers not to the whole country, but to certain regions. The confusion arose from our mistake in the process of translating and editing the article.]

At the end of 1986 (November 4), Rafael Guerrero, national director of the social organization of production of the Ministry of Agrarian Reform (MIDINRA) informed Jeff Mackler in a taped interview:

“Land that was negotiated and bought from the private producers and in turn given to the peasants amounted to 4%. This was the primary procedure used in 1984 and 1985 to respond to the demand for the land. We distributed a small percentage of the land assigned to the cooperatives (3%) ….In 1986, 46% was from private producers who … kept the land idle or unproductive. 41% of the distributed land came from the State sector.” (Official Report)

The 1986 land reform actually took only 4% of productive land of the large landholders and, contrary to Vilas, did not affect the large bourgeoisie.

4) Vilas is inaccurate in his claim that the amount of land held in large capitalist estates was reduced to less than 9% by the end of 1986. The official report from MIDINRA allocates 22% to large private producers (over 345 acres) and 30% to “medium” private producers (85-345 acres). Small private producers (under 85 acres) have 9%. The total amount of land in private capitalist hands is 61%.

Vilas’ contentions are at variance with his writings. His books make clear that in land ownership, despite the various land reforms, private capital predominates, with 54% of production ascribed by Vilas to “large and medium land owners,” (Nicaragua, 43 and The Sandinista Revolution, 1986, 159). A cattle rancher with 860 acres is dubbed a “medium producer” yet Vilas attacks me for supposedly confounding “peasant and proper capitalist production units”!

For as Vilas himself states,

“The economic transformations begun after July 19, 1979 were more ant oligarchic than anti-capitalist… [the] aim national recovery rather than State planning.” (Ibid, 265)

He describes:

“… the economic withdrawal of the large bourgeoisie whose level of productive investment has dropped dramatically. Furthermore, the incentives conceded to the medium-sized and large bourgeoisie. . contrast with the reluctance to agree to salary demands by the workers and the fall of their real in­ comes.” (Ibid, 266)

The Sandinistas must choose between the needs of the working poor and their alliance with the bourgeoisie. Workers’ democracy becomes ever more critical as the bourgeoisie withholds investment and cripples the economy. In Vilas’ own work, the evidence he adduces sustains every political conclusion of my own critique.

Vilas would do better to keep his own counsel. He displays a less than even feel for the rusty cannon thrust into his hands, which is why, as initiates will readily detect, it has misfired so badly.

May-June 1987, ATC 9

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