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Mary Bell

The Economics of Filipino “Freedom”

(2 September 1946)

From Labor Action, Vol. 10 No. 35, 2 September 1946, pp. 3 & 5.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Readers of the big business dailies are stuffed to the gills with stories about the “iron curtain” in Europe which Russia erects to keep the eastern half of Europe secluded from foreign penetration, so that she can exploit it as her own private preserve. This is Russian imperialism at work.

We are also surfeited with stories of Britain’s “hands off” policy with respect to her colonies, which are bailing over with mass revolts in half a dozen places today. Thus, ample evidence is provided of British imperialism.

And what does the biggest world power, the United States, do in the midst of the sanguine suppression of the European people and the colonial slaves by its rivals? Why, in addition to its diplomacy in Europe, it shows its own “non-imperialist” generosity by giving “freedom” on the anniversary of its own independence, July 4, 1946, to its former colony, the Philippine Islands.

You will have to search hard to find a greater hoax perpetrated in the name of freedom and independence. This hoax isn’t being swallowed by the working population of Luzon in the Philippines, which is bearing the brunt of “independence” and for not unstrange reasons finds it necessary to organize in guerrilla bands to fight against the “freedom” so recently tendered them. But the hoax has been put across more or less successfully in the United States, because the government and press of this country have an “iron curtain” every bit as effective as that of the Russians, drawn through the center of the Pacific Ocean!

While the Philippines are now nominally free politically, i.e., they are formally independent, economically they remain chained to the United States A brief examination of the history of U.S. exploitation of the Philippines and the nature of the recently granted independence will show how farcical is this political freedom based upon economic enslavement.

The Early History

In 1898, as a result of the Spanish-American War, the U.S. acquired the Philippines from Spain. But the Filipinos had fought bravely throughout Spanish rule for their independence and had already declared a republic. It took three years of jungle warfare for the U.S. to crush the republic. After many promises, and retractions of promises, of independence, July 4, 1946, was finally set as the date for the actual grant.

In the almost fifty years of American exploitation of the islands, she succeeded in maintaining the old type of Spanish land grants with survivals of feudalist practices. There was practically no development of internal economy, since production was geared to mesh with the export needs of the United States. In 1941, our investments in the Philippines were estimated at over $258 million. In 1946, Paul V. McNutt, High Commissioner of the Philippines, stated: “Ninety-five per cent of ... export trade was with the United States.”

“The net result,” according to Bernard Seeman in the American Mercury, August 1946, “was a social system wherein the bulk of the population were virtual peons, largely illiterate, ill-fed, ill-housed and with few political rights. These people, mainly tenants or sharecroppers on the large semi-feudal estates, were constantly in debt to their landlords, a debt which kept mounting because of usurious interest rates. Their living quarters were generally one-room shacks with only the most primitive toilet facilities. The average peasant wage came to about fifteen cents a day.”

The Crowning Achievement

The income of a Filipino family of four averages $75 a year, about $20 of which goes for taxes. As for the accomplishment of our “civilizing” mission, the traditional “white man’s burden,” this is how we fulfilled it: By 1939, almost two-thirds of the people over twenty had received no schooling at all, while two-fifths of the remainder had completed only the fourth grade.

There does exist a tiny upper class of landowners, business men and export-import agents in the islands known as compradores. The opposition to independence came from, this class, mostly Spanish and American. They feared economic independence, for they might be forced to revolutionize their industry, produce for the home market instead of export and risk competition in the world market without the favorable tariff relations they enjoyed with the U.S. In addition, American business men with financial or sugar interests in the Philippines opposed independence. The basis of colonial profits in the islands lay in trade agreements, whereby the United States set duty-free quotas on the major imports – sugar, hemp, copra, etc. This system guaranteed the compradores a profitable market.

Fear of freedom and dependence upon the export trade led the native compradore class to collaborate with the Japanese, knowing that export would be the main basis of their relationship. The new President, Roxas, a representative of this class, was a thorough-going collaborator, although on his recent visit of welcome here this fact was little mentioned in the press. How would this news look next to the reports of the Nuremberg trials and the execution of European quislings? The “iron curtain” had to be drawn, you see.

Safeguarding U.S. Interests

The Philippines suffered more than a billion dollars in war losses, which Roosevelt had promised to compensate. Instead, little over half that amount was proffered. The major part of this sum went to business interests which collaborated with Japan and not to the little people who actually fought the invader in guerrilla bands. But before higher than $500 claims can be paid out of this fund, the United States demanded ratification of the Trade Act, which, in fact, nullifies the Independence Act. The Trade Act provides for an eight-year extension of duty-free trade, establishment of quotas on Philippine exports to the U.S. and the postponement of duties on American goods to the year 1974! It gives the Spanish and American “compradore” producers a virtual monopoly on trade. It also ties in Philippine tariffs with American tariffs, preventing the former from being lower than the latter.

An act which buttresses this Trade Act is the Property Bill, which gives “any agency or instrumentality of the United States government” the right to retain any Philippine property which it has or might acquire – for an indefinite period of time!

And so we find in the Philippines the application of an imperialist policy akin to the British against which the State Department has had occasion to protest. In the meantime, the U.S. maintains 115,000 American and native troops on the Islands. The dictatorial measures invoked by the newly elected collaborationist President have provoked a revolt for land reform by the guerrilla forces in Central Luzon. But against them stands a large armed force ready to resist any movement which seeks to upset the present economic stranglehold which American and native capitalists, merchants and landlords hold on the country. This is but a glimpse behind the “iron curtain” after the grant of independence to the Philippines.

What makes American policy SEEM less imperialistic than her rival powers? American wealth, resources and strength, make it possible for her to lay greater emphasis on the dollar rather than the sword. U.S. imperialism prefers economic penetration and control to military assault. But that does not make American foreign policy; any less imperialist if by imperialism we understand not only seizure of foreign lands by force, but also economic domination and exploitation of other peoples. Even so, history has provided ample proof that where U.S. capitalism is unable to, achieve its economic aims by the “peaceful” means of economic penetration, it is quite prepared to employ force, to use its armed services. It did it in the Philippines once before; if necessary, it will do it again.

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