II. The nature of the crisis

We share the view of many social scientists who regard the present world crisis as a structural one.² Basically, the world division of labour, which began early in the present century but accelerated after the crisis of the 1930s, reached its limit - namely, the impossibility of increasing profitability for private enterprises - by the end of the 1960s. History shows that the ways out of such crises have been: (1) technological breakthroughs, which provide both new levels of profitability and new opportunities for capital accumulation, and (2) furthering the proletarianization of the world by means of organizational innovations which facilitate the exploitation of low cost labour.

It is true that after the beginning of the 1950s a new thrust in the international economy was provided by the process of transnationalization of the world economy. This later resulted in (1) expansion of the social division of labour to a transnational scale and (2) further concentration of the means of production in a few gigantic enterprises.

However, the impact of this process was not enough to counteract the structural factors which provoked the world economic crises. It may be that the process of transnationalization is just beginning, if one is to judge by the fact that only seven or eight underdeveloped countries are fully incorporated into it; that is, most of the worlds underdeveloped countries are in yet earlier phases of world capitalist development.

It is necessary to point out some of the main features associated with the process of transnationalization: first of all come technological innovations in the organization of the labour process, particularly the breaking down of complex tasks into simple ones so that new masses of non-qualified cheap labour can be hired. Second, a new partnership is being formed between the state, local bourgeoisie, and transnational corporations in order to further the process of industrial redeployment.

Third, due to the energy crisis, huge -funds are increasingly being invested with the aim of producing technological breakthroughs in that field. A critical evaluation of the probabilities of achieving success within the next decade reveals that they are very low. Nevertheless, new sources of capital accumulation are being created.

The main consequences for the underdeveloped countries of the process of transnationalization are:

1. An increased role for the state in the economy, which is not only performing the traditional functions of the state but also assuming the function of producing material goods in leading sectors of the economy.

2. The reconcentration of income in the privileged strata of the population. This phenomenon is determined by (1) the need to expand the demand for the products of the leading transnationalized sectors of the economy, which usually produce goods which can only be purchased by the capitalistic sectors of the economy, and (2) the need to keep down the real salary of the workers in order to make things more profitable for the transnationals, which otherwise could invest somewhere else.

3. Relative deterioration of the capacity to produce both industrial and agricultural products oriented to the satisfaction of the needs of the impoverished masses of the population.

The last two consequences inevitably lead to the discontent of the masses, which sooner or later may explode in violent reactions, strikes, or even revolutionary movements. Presently, the fact that there is a world crisis obviously determines a deepening of class struggle in the developed countries. This, in turn, functions as a demonstration effect for the underdeveloped countries' labour class.

The Latin American experience reveals two basic sets of policies to control such social movements: (a) establishing or reinforcing a social and political pact among labour organizations, government, parties, the military, and the bourgeoisie. This is the case in Venezuela, Mexico, and Colombia, where more or less democratic governments exist and where social democratic or Christian democratic parties have great influence both in government and in labour organization; (b) establishing authoritarian regimes such as those in Chile, Argentina, Uruguay, and Brazil.