Year 501 (31 page)

The problem of combating “subversion” had come to the fore in 1943, when Bolivian mine owners called on government troops to suppress striking tin miners, killing hundreds of them in the “Catavi massacre.” There was no US reaction until the nationalist, anti-oligarchic, pro-labor National Revolutionary Movement (MNR) deposed the dictatorship a year later. The US denounced the new regime as “pro-fascist” (on flimsy pretexts) and as opposed to “Anglo-Yankee imperialism” (accurately, in this case), demanded that all MNR members be excluded from positions of power, and quickly secured its overthrow in favor of a military government. A State Department memo identified one decisive theme: the mine owners, it observed, are afraid of the MNR's “announced intention to interest itself in the betterment of the workers, fearing this can only be done at the expense of the mining interests.” The broader fear was radical nationalism (chapter 2.1).

The Kennedy Administration moved the process forward, shifting the mission of the Latin American military from “hemispheric defense” to “internal security,” meaning war against the population. Academic experts explained soberly that the military are a “modernizing” force, when guided by their US tutors.

The basic reasoning was explained in a secret 1965 study by Robert McNamara's Defense Department, which found that “U.S. policies toward the Latin American military have, on the whole, been effective in attaining the goals set for them”: “improving internal security capabilities” and “establishing predominant U.S. military influence.” The military now understands their tasks and are equipped to pursue them, thanks to the substantial increase in training and supply carried out by the Kennedy Administration in 1961-1962. These tasks include the overthrow of civilian governments “whenever, in the judgment of the military, the conduct of these leaders is injurious to the welfare of the nation”; this is a necessity in “the Latin American cultural environment,” the Kennedy liberals explained, sure to be carried out properly now that the judgment of the military is based upon “the understanding of, and orientation toward, U.S. objectives.” Proceeding along these lines, we can assure the proper outcome to the “revolutionary struggle for power among major groups which constitute the present class structure” in Latin America, and can guarantee “private U.S. investment” and trade, the “economic root” that is the strongest of the roots of “U.S. political interest in Latin America.”
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The vulgar Marxist rhetoric affected by the Kennedy-Johnson planners is common in internal documents, as in the business press.

Returning to Brazil, plans for a military coup were initiated shortly after João Goulart became President in August 1961. The military were wary of his populist rhetoric and appeal, and angered by his efforts to raise minimum wages of civilian laborers. Concerns of the US business community were enhanced when the Chamber of Deputies passed a bill placing conditions on foreign investment and limiting remittance of profits on the grounds that they were “bleeding the Brazilian economy.” Though Goulart, a faithful member of the Brazilian elite, was anti-Communist, US labor leaders and Embassy officials were alarmed at his involvement with labor and peasant organizations and appointment of Brazilian Communists to staff positions; “an openly Communist course,” the CIA warned. The appropriate Cold War context had been spelled out by JFK, shortly before assuming office (see p. 102).

By early 1962, Brazilian military commanders had notified Kennedy's Ambassador, Lincoln Gordon, that they were organizing a coup. At JFK's personal initiative, the US began to lend clandestine and overt support to right-wing political candidates. The President's feeling, in agreement with Gordon and the US business community, was that “the military probably represented the key to the future,” Ruth Leacock concludes. Robert Kennedy was dispatched to Brazil in December 1962 to influence Goulart to “confront the communist problem,” as the US Embassy put it. RFK informed Goulart that the President was seriously concerned about the infiltration of “Communists and anti-American nationalist leftists” into the government, the military, the unions, and student groups, and about the “ill treatment [of] American and other foreign private investors.” If Goulart wanted US aid, Kennedy said, he must see to it that “personnel in key Brazilian positions” were pro-American, and impose economic measures that the US recommended.

Relations remained tense, particularly over the austerity plan that the Kennedy Administration demanded as a condition for aid, and its admonitions about left-wing influence. In March 1963, the CIA again reported plans for a military coup; US corporate executives were, by then, privately urging a total US aid cutoff to expedite the coup plans. In August, US Defense Attaché Vernon Walters warned the Pentagon that Goulart was promoting “ultranationalist officers” in preference to “pro-democratic pro-US officers” (the two terms presumably being synonymous). Relations harshened further under the Johnson Administration. Senator Albert Gore informed the Senate Foreign Relations Committee, then considering US aid, that he had heard that “all of the members of the Brazilian Congress who advocated the kind of reforms which we have made a prerequisite for Alliance for Progress aid are now in prison.” Ambassador Gordon cabled Washington that the US should increase military aid for Brazil because the military was essential in the “strategy for restraining left wing excesses of Goulart government.” Meanwhile the CIA was “financing the mass urban demonstrations against the Goulart government, proving the old themes of God, country, family, and liberty to be as effective as ever,” Philip Agee noted in his Diary.

Recall that aid to the military is standard operating procedure for overthrowing a civilian government. The device was also used effectively in Indonesia and Chile, and tried in Iran in the early 1980s, the first stage in what later became (suitably recrafted) the Iran-contra affair.
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On March 31, the generals took over, with US support and plans for further action if necessary “to assure success of takeover.” The Generals had carried out a “democratic rebellion,” Gordon cabled Washington. The revolution was “a great victory for the free world,” which prevented a “total loss to the West of all South American Republics” and should “create a greatly improved climate for private investments.” “The principal purpose for the Brazilian revolution,” he testified before Congress two years later, “was to preserve and not destroy Brazil's democracy.” This democratic revolution was “the single most decisive victory of freedom in the mid-twentieth century,” Gordon held, “one of the major turning points in world history” in this period. Adolf Berle agreed that Goulart was a Castro clone who had to be removed. Secretary of State Dean Rusk justified US recognition for the coup regime on the grounds that “the succession there occurred as foreseen by the Constitution,” a statement that was not “entirely accurate,” Thomas Skidmore judiciously observes.

US labor leaders demanded their proper share of the credit for the violent overthrow of the parliamentary regime, while the new government proceeded to crush the labor movement and to subordinate poor and working people to the overriding needs of business interests, primarily foreign, reducing real wages by 25 percent within 3 years and redistributing income “toward upper-income groups who were destined to be the great consumers of the Brazilian miracle” (Sylvia Ann Hewlett, who sees the brutal repression and attack on living standards as “an essential prerequisite for a new cycle of capitalist growth within the Brazilian domestic economy”). Washington and the investment community were naturally delighted. As the relics of constitutional rule faded away and the investment climate improved, the World Bank offered its first loans in 15 years and US aid rapidly increased along with torture, murder, starvation, disease, infant mortality—and profits.
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4. Securing the Victory

The United States was the “regime's most reliable ally,” Thomas Skidmore observes in the most comprehensive scholarly study of what came next. US aid “saved the day” for the ruling Generals; the process also “turned the US into a kind of unilateral IMF, overseeing
every
aspect of Brazilian economic policy.” “In almost every Brazilian office involved in administering unpopular tax, wage, or price decisions, there was the ubiquitous American adviser,” the new US Ambassador discovered in 1966. Once again, the US was well-positioned to use Brazil as a “testing area for modern scientific methods of industrial development”(Haines), and therefore has every right to take credit for what ensued. Under US guidance, Brazil pursued orthodox neoliberal policies, “doing everything right” by monetarist criteria, and “strengthening the market economy” (Skidmore). The “economic miracle” proceeded in parallel with the entrenchment of the fascist National Security State, not accidentally; a regime that could not wield the knout could hardly have carried out measures with such a deleterious impact on the population.

The neoliberal reforms did not exactly succeed in “building Brazilian capitalism,” Skidmore continues (though they did help build foreign corporations). They provoked a severe industrial recession, driving many businesses to ruin. To counter these effects and to prevent still further foreign takeover of the economy, the government turned to the public sector, strengthening the despised state corporations.

In 1967, economic policy was taken over by technocrats led by the highly respected conservative economist Antonio Delfim Neto, an enthusiastic supporter of “the Revolution of March 31,” which he saw as a “huge demonstration by society” and “the product of a collective consensus” (among those who qualify as “society”). Declaring its devotion to the principles of economic liberalism, the government instituted indefinite wage controls. “Worker protests, up to now infrequent and small, were handily suppressed,” Skidmore notes, as fascist rule hardened further over the whole society, with harsh censorship, elimination of judicial independence, removal of many faculty, and revised curricula to promote patriotism. The new compulsory course in “Moral and Civic Education” aimed to “defend the democratic principle by preserving the religious spirit, the dignity of the human being, and the love of liberty, with responsibility under God's inspiration”—as administered by the Generals with the technocrats at their side. The authors of the 1992 Republican Campaign platform would have been much impressed, along with 1980s-style “conservatives” rather generally.

The President announced in 1970 that repression would be “harsh and implacable,” with no rights for “pseudo-Brazilians.” Torture became “a grisly ritual, a calculated onslaught against body and soul,” Skidmore writes, with such specialties as torture of children and gang rape of wives before the family. The “orgy of torture” provided “a stark warning” to anyone with the wrong thoughts. It was a “powerful instrument,” that “made it even easier for Delfim and his technocrats to avoid public debate over fundamental economic and social priorities” while they “preached the virtues of the free market.” The resumption of high economic growth, by these means, made Brazil “again attractive to foreign private investors,” who took over substantial parts of the economy. By the late 1970s, “The industries dominated by local capital in Brazil [were] the same industries where small businesses flourish in the United States”; multinationals and their local associates dominated the more profitable growth areas, though with the changes in the global economy, about 60 percent of foreign capital was then non-US (Peter Evans).

Macroeconomic statistics continued to be satisfying, Skidmore continues, with rapid growth of GNP and foreign investment. A “dramatic” improvement in terms of trade in the early '70s also provided a shot in the arm to the Generals and technocrats. They held firm to the doctrine that “the real answer to poverty and unequal income distribution was rapid economic growth, thereby increasing the total economic pie,” eliciting nods of approval in the West. A closer look shows other characteristic features of neoliberal doctrine. Growth rates in 1965-1982 under the National Security State averaged no higher than under the parliamentary governments from 1947-1964, economist David Felix observes, despite the advantages of authoritarian control the fascist neoliberals enjoyed; and the domestic savings rate hardly rose during the “miracle years” under the “right-wing consumerism” instituted by the Generals and technocrats. The domestic market was dominated by luxury goods for the rich. None of this will be unfamiliar to others subjected to the same doctrines, including North Americans during the “Reagan revolution.”

Brazil became “the most rapidly growing of major overseas markets of American manufacturers,” Evans observes, with high rates of return for investment, second only to Germany during the late ‘60s and early 70s. Meanwhile, the country became even more of a foreign-owned subsidiary. As for the population, a World Bank study in 1975—at the peak of the miracle years—reported that 68 percent had less than the minimum caloric requirement for normal physical activity and that 58 percent of children suffered from malnutrition. Ministry of Health expenditures were lower than in 1965, with the expected concomitant effects.
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After a visit to Brazil in 1972, Harvard political scientist Samuel Huntington urged some relaxation of the fascist terror, but with moderation: “relaxation of controls” might “have an explosive effect in which the process gets out of control,” he warned. He suggested the model of Turkey or Mexican one-party rule, playing down the importance of liberal rights in comparison with the more significant values of “institutionalization” and stability.