Just So 4 All
Just So 4 All is an international social justice advocacy movement.
Its mission is to defeat the Dark Society and establish a Bright Society where individuals live in peace and dignity.
1. Introduction: The Post-ICA Coffee Economy
The post-International Coffee Agreement (ICA) history of coffee is characterized by market deregulation, extreme price volatility, the dramatic rise of new producers like Vietnam, and the emergence of the specialty coffee movement.
The post-ICA history of coffee in Central America has generated controversies among Karl Marx and Adam Smith’s followers. Marx argued that under capitalism, the State serves the needs of the capitalists or owners of capital. In addition, the State allies itself with the capitalists to keep farmers away from landownership by creating ways to take away farmers’ lands. Also, the State will force farmers to work for the capitalists. Capitalism will lead to the emergence of two opposing classes: capital owners and workers.
Smith, on the other hand, argued that both capital owners and workers will mutually gain from specialization and the division of labor. Evidence has shown that Karl Marx’s model better describes the post-ICA coffee economy. This article supports Marx’s criticism of capitalism and will heavily draw on the history of coffee in Latin America to prove Marx’s assertion.
2. Labor Constraints and State Intervention
Coffee production requires a substantial amount of labor. In the early development of coffee in Central America, labor was very constraint. To overcome that constraint, governments worked on the advantage of capital owners to come up with solutions.
In Guatemala for instance, in the region of Alta Verapez, following complaints of labor shortages, the local government executed labor drafts on Indian communities. In addition,:
“the government of Justo Rufino Barrios carved up communal holdings in the Pacific piedmont and distributed them to potential coffee growers. (….) This way, the Barrios regime intensified ancient struggles between Indian groups, while claiming lands for the export sector. (….). Those villages most severely squeezed by the loss of lands became a potential labor reserve for plantations ….”
This clearly supports Marx’s argument that the state allies itself with the capitalists.
3. Institutional Mechanisms of Labor Control
On November 3rd, 1876, a national circular ordered heads of departments to assist capital owners to obtain labor.
In 1877, in its effort to assist capital owners, the Guatemalan government forced workers to carry a “libretto” card or pass card. To monitor the usage of the card, the government ordered plantation owners to update debits and credits to the worker’s accounts and provide local authorities with the updated information.
The government allowed landowners in need of additional labor to submit a request to local authorities, which in turn forces men and women to fulfill the capitalists’ needs for labor.
4. Evidence of Exploitation
The existence of exploitation is Marx’s another criticism of capitalism that the Guatemalan coffee history has confirmed.
“In 1877, a new labor code stipulated that if a peasant could not pay the yearly road tax, an employer could pay the tax and the peasant would become indebted by that amount to the employer, who would issue a libretto card to the peasant showing the number of days of labor owed.”
In doing so, the employers are given an opportunity to oppress workers.
5. Limits of Adam Smith’s Theory
The development of coffee in Central America has proven that Adam Smith’s theory did not hold.
According to Smith’s theory of the “invisible hand”, as individuals pursue their self-interest, they indirectly increase society’s wellbeing. That was not the case in Central America.
As governments and local officials assisted capital owners to overcome the labor constraint, workers did not benefit from it at all. Instead, their situation grew worse than before.
6. Conclusion: A Marxist Interpretation of the Coffee Economy
In all, Central America’s post-ICA coffee economy was best described by Karl Marx’s model.
In most Central American countries, governments and local authorities had clearly allied themselves with the capital owners, thereby serving their needs. In addition, government officials kept farmers away from landownership and forced them to work for the capitalists.
Land privatization generated an increase in labor availability and a landless class (farmers). The rise of capitalism led to a greater disparity between capitalists and workers.
References
Williams, Robert G. (1994) Labor and the Coffee Boom. States and Social Evolution: coffee and the rise of national governments in Central America. University of North Carolina Press, Chapel Hill, pp. 113–115.
Williams, Robert G. (1994) Labor and the Coffee Boom. States and Social Evolution: coffee and the rise of national governments in Central America. University of North Carolina Press, Chapel Hill, pp. 116.
By Issa Ndiaye | Principal and CVO at OVINDI International Group