We have seen that the first president of the neocolonial republic, Tomás Estrada Palma, adopted policies that deepened the core-peripheral relation between the United States and Cuba and facilitated control by US corporations and banks of Cuban agriculture, industry, commerce, and financial infrastructure (see “A neocolonial republic is born” 7/1/2014). In 1906, the United States again occupied Cuba, in reaction to violence associated with the reelection of Estrada Palma. Charles E. Magoon, who had previously governed the Panama Canal Zone, was named to govern the island by President William Howard Taft. Magoon named the principal leaders of Cuban political parties to government posts, leading to high levels of corruption. The second US occupation ended in 1909, and constitutional and electoral “democracy” was restored. The governments of elected presidents from 1909 to 1925 (José Miguel Gómez, 1909-13; Mario García Menocal, 1913-21; Alfredo Zayas, 1921-25) facilitated a deepening of US penetration and control, and they were notorious for their corruption. As we have seen (“Julio A. Mella and the student movement” 7/8/2014), the corruption of the neocolonial republic, in which public officials and their friends profited from the expenditure of government funds on projects and public works, was an important factor in stimulating a student movement in the early 1920s. Corruption is endemic in the neocolonial situation, because many popular leaders and young persons with leadership potential avoid a career in government, understanding that foreign control creates a situation in which there is not the possibility of participating in a project that seeks the independent development of the nation; for many that enter public service, the principal motivation is personal gain. In the neocolonial situation, a dignified national project is precluded, but personal gain is not (Instituto de Historia de Cuba 1998:46-211).
In the presidential elections of 1924, Gerardo Machado launched a vigorous campaign full of promises, such as more scrupulous management of public funds; respect for the Constitution and for public opinion; the limitation of the presidency to one term; recognition of the autonomy of the university from the government; the raising of workers’ salaries; and the protection of national industry through tariffs and other measures. His campaign slogan was “water, roads, and schools.” The campaign rhetoric of Machado was a departure from the traditional electoral language, and it represented the aspirations of the sector of the bourgeoisie most connected to national industry as well as the petit bourgeoisie. His candidacy thus enjoyed the support of ample social sectors (Instituto de Historia de Cuba 1998:240-42).
Machado had extensive ties with the North American financial oligarchy, including the previously mentioned National City Bank (see “Instability in the neocolonial republic” 7/2/20214) and the Bankers Club. He also had strong ties with Spanish large-scale merchants in Cuba and with the Cuban political class that had emerged to dominate the republic in the period 1902 to 1924. His governing strategy was to support the interests of all of these sectors as well as popular demands. Seeking to stabilize sugar prices, he imposed restrictions on sugar production, and he attempted to induce the sugar producing nations in Europe and Japan to also set limits on sugar production. Seeking to protect Cuban sugar producers from losing land to the large US sugar companies in Cuba, he established temporary restrictions on the development of new sugar plantations and processing plants. In order to stimulate employment, particularly during the “dead time” in sugar production, the Machado government initiated an extensive program of public works, using funds lent to the government by the Chase National Bank of New York. The public works plan included the construction of the Central Highway, the National Capital, schools, hospitals, aqueducts, and a sewer system (Instituto de Historia de Cuba 1998:242-49).
In 1927, the government of Machado also enacted a tariff reform, with the intention of diversifying industry and agriculture. The reform was modest, seeking to protect certain branches of Cuban production without challenging fundamental US interests in Cuba. The areas of Cuban production that benefitted included coffee, beer, cornmeal, butter, cheese, cement, matches, fans, starch, furniture, soap, paper, sausage, chocolates, sweets, footwear, lime, putty, bricks, clay tile, straw hats, cigarettes, rope, and bottles. The tariffs also protected industries that had not yet emerged in Cuba: textile manufacturing; certain lines of milk; petroleum refining; and the manufacture of paints, tires, and chemical and pharmaceutical products. Some US companies were able to take advantage of the new tariff regulations to establish factories in Cuba in branches of production that had not yet been developed or to establish control of Cuban production in a protected sector. Accordingly, US companies developed factories in Cuba for the manufacture of paints and pharmaceutical products; Colgate-Palmolive signed an agreement that enabled it to control the production of soap and a line of perfume products in Cuba; and Esso Standard Oil developed a petroleum refinery in Cuba (Instituto de Historia de Cuba 1998:249-51).
The Machado plan to balance the interests of the international bourgeoisie, the national bourgeoisie and the demands of the popular sector did not succeed. World sugar producers did not participate in the control of production, generating a new situation of overproduction and lower prices. The US reacted by reducing its purchase of Cuban sugar, in accordance with the interests of US sugar producers. Thus, Cuban income from sugar production declined significantly during 1927 and 1928. And the protection of national industry and agriculture provided by the Machado plan was not sufficient to generate significant expansion and diversity in production (Instituto de Historia de Cuba 1998:245-53).
The Machado plan was an attempt to reform the neocolonial system, not to break the neocolonial relation. Such a plan, which seeks to satisfy elite interests as well as respond to popular demands, can succeed only in favorable moments, such as, in the Cuban case, when the national income generated by sugar is high. But inasmuch as the neocolonial system involves the appropriation by the core of profits generated by peripheral and semi-peripheral production, the system depends upon the super-exploitation of peripheral and semi-peripheral regions, thus placing inherent limits on the satisfaction of popular demands. Therefore, popular demands cannot be met through the reform of the neocolonial system, except in the short-term and in favorable moments; the long-term and sustainable satisfaction of popular demands requires the abolition of neocolonialism and the development of a more just and democratic world-system. Thus, the Machado plan for reform failed; just as would fail other attempts to reform the neocolonial world-system, such as the Latin American import-substitution development project, Kennedy’s Alliance for Progress (see “The Alliance for Progress” 9/26/2013), and Jimmy Carter’s human rights foreign policy (“Jimmy Carter” 10/1/2013). And Franklin Delano Roosevelt’s reformist vision for a peaceful post-World War II neocolonial world-system could not get off the ground, cast aside by the ideology of the Cold War (see “Post-war militarization of economy & society” 9/23/2013).
Instituto de Historia de Cuba. 1998. La neocolonia. La Habana: Editora Política.
Key words: Third World, revolution, colonialism, neocolonialism, imperialism, democracy, national liberation, sovereignty, self-determination, socialism, Marxism, Leninism, Cuba, Latin America, world-system, world-economy, development, underdevelopment, colonial, neocolonial, blog Third World perspective, Cuban Revolution, neocolonial republic, Machado