Nicaragua: Lessons of a country that did not finish its revolution – Part Two

The Sandinistas carried out many progressive reforms after they came to power, but they never seriously tackled the question of ownership of the means of production. By leaving the bulk of the economy in private hands they gave the local oligarchy and imperialism the instruments by which these were able to undermine the revolution and eventually defeat it.

Reform or Revolution: The nature of the state

Thousands of working class men and women took advantage of the victory of the Nicaraguan revolution in 1979 to immediately demand better pay and conditions and also payment of wages lost during the revolutionary strike. The bourgeoisie were preparing to take advantage of the new political era inaugurated by the Sandinistas for their own ends, when it had in fact been the people who had kicked Somoza out of the country.

The problem was that, unlike in Russia during the 1905 and 1917 revolutions, in Nicaragua during these revolutionary months no independent organs of workers' power were set up in the cities. Therefore the power vacuum after the revolutionary victory was filled by the FSLN guerrillas and the representatives of the urban bourgeoisie.

Instead of basing the new power on assemblies and workers' and peasants' committees (genuine workers' democracy), the new state structure was based on the hierarchical model of the guerrilla army - like in the Cuban revolution. From a Marxist point of view the problem with this organisational model is that it does not allow the participation of the masses in the decision-making process, in the election and recall of the leaders and so on. In other words, it does not allow for genuine control of the state and the state apparatus. The strong point of workers' democracy compared to other kinds of regimes thrown up by different revolutions is the democratic mechanisms to counteract bureaucratisation.

Lenin explained that some conditions had to exist in a revolution in order to have power held by the people. Lenin never talked about "popular power" in general. In his writings such as State and Revolution, April Thesis and The impending catastrophe and how to fight it, the Bolshevik leader developed Karl Marx's theory under the light of revolutionary experience.

The working class cannot use the bourgeois state apparatus to rule. The bourgeois military, parliamentary, legal and ideological institutions are tailor-made for the dictatorship of the bourgeoisie - it is the main instrument used by the bourgeois class to rule over the working class and other oppressed layers of society. The bourgeois state is not fit for "popular power" because it is designed precisely to stop any genuine popular participation.

What is needed to overcome the bourgeoisie and end their economic, political and military rule is to establish new and genuinely popular structures based on the natural forms of organisation of the working class in struggle:

1) All the power in the cities must be in the hands of revolutionary committees elected by all the revolutionary population mobilised in the wards, and districts...

  • All the power in the factories, companies, media and so on must be under the control of committees elected by revolutionary workers' assemblies in each sector.
  • All the power of the state must rest under the general command of the revolution which should be elected, accountable and recallable by committees of workers and peasants in order to exclude the bourgeoisie from political power. No to the bourgeois parliament, no to the bourgeois government, no to the bourgeois courts.
  • All delegates or representatives must be elected and recallable at any moment by the rank and file that voted them. Not a single official in the new state must get wages superior to the average earnings of a worker. This is the way to fight bureaucracy.

2) There must be popular militias based on the working class and the poor peasantry to replace the traditional army that is kept isolated from the population by the walls of the barracks.

  • The officers must be elected and recallable by the ranks of the militias and controlled by peasants' and workers' revolutionary committees in the countryside and the wards in the cities.
  • Arms must be under the control of the revolutionary committees elected in the wards, villages and factories. Soldiers must coordinate their committees with them.

3) Nationalisation of the most important industries and the multinational companies under workers' control. There must be no compensation to the former owners. Only the small shareholders that genuinely need it, should be compensated.

  • Nationalisation of the banks, insurance companies and construction companies. Private and foreign banks must be merged into a single revolutionary central bank under the control of the workers' state.
  • Control of foreign trade and collectivisation of the big landowners' estates.

What was the situation in Nicaragua after the revolution? Both the Sandinista and non-Sandinista civil servants began to earn 6 and 7 times more than ordinary workers in a situation where 50% of the labour force was unemployed. The managers of private industry carried on earning an average of 20 to 25 times more than the workers. Banks with no currency reserves and that were bankrupt were nationalised. The government assumed the debt of private companies. The private banks suffered losses of 1800 million dollars caused by the debts of such companies. Only companies that belonged to the Somoza family were nationalised (these represented 25% of the Nicaraguan economy). These companies had been completely abandoned and ruined by the Somoza family. Payments of interest on the foreign debt were not suspended, nor was the Somozista foreign debt repudiated. The workers were excluded from any possibility of controlling the major economic decisions.

The Somozista state machinery and its armed body (the National Guard) were swept away by the revolution. The leadership of the FSLN stepped into this vacuum. These same leaders months before taking power had brokered the creation of a National Reconstruction Junta (JNR) with the national and international bourgeoisie from Costa Rica and Venezuela. Months before there were frenetic activities that involved agreements, meetings and negotiations abroad between the FSLN leaders, representatives of the Nicaraguan bourgeoisie and the bourgeois governments of Costa Rica, Panama, Venezuela and Mexico.

 General Omar Torrijos
 General Omar Torrijos

The main goal pursued by everybody (including the FSLN) was to negotiate the nature of the new state after the overthrow of Somoza and avoid a situation where the Nicaraguan masses could cast off the chains of capitalism. General Omar Torrijos from Panama sent his National Guard to coordinate the FSLN actions. The aim was to ensure a bourgeois and bureaucratic structure of the new army and give logistical support and troops to the final offensive of the Sandinistas. The popular militias formed during the struggle were disbanded by the Sandinista central command. The Sandinistas bent under the pressure of the national and international bourgeoisie.

The setting up of revolutionary popular militias always terrifies the ruling class because these can be sued to destroy the repressive apparatus of the bourgeois state. This happened then and will happen in all revolutions. The disarming of the people appeared to be a priority to establish "bourgeois democratic credibility" of the National Reconstruction government led by the Sandinistas.

On July 27, a week after the taking of Managua the Sandinista army chief Humberto Ortega announced the integration of the popular militias into the new regular army following the advice of the Panama National Guard. Years earlier this body had been trained by US officers and the CIA. He also created the Sandinista Police (PNS) in order to remove public order tasks from the Sandinista Defence Committees (CDS).

The distribution of land is key to the success of all revolutions. The revolution had initially encouraged the poor peasants and rural workers to take over the land. The JNR stopped them and they even used the newly created Sandinista Police to persuade the peasants not to occupy the land.

To make things crystal clear: the Minister for Agrarian Reform intervened and ordered that nobody could take over landed estates even if they were misused, because the Ministry of Agrarian Reform would provide land at the appropriate time.

On July 31, Sandinista Wheelock stated, "We do not want to allow radicalism, we are realists". In 1981 the Minister for Planning, Xavier Gorostiaga, recognised that "very few people are aware of the fact that 80% of agricultural production is in the hands of the private sector, as is as 75% of the industrial sector". The private sector controlled 72% of cotton production, 53% of coffee, 58% of cattle production, 51% of sugar, while the 200,000 peasants owned only 14% of the land. It would be true to say that by this stage many peasants and agricultural labourers realised that the FSLN leadership was acting as a brake on the revolution.

The Sandinista leadership ruled the country together with the treacherous national bourgeoisie during the first months of the revolution. However, the economic crisis continued to get worse. But the bourgeoisie, by now reassured that the FSLN leadership had halted the revolution, left the economic problems for the Sandinistas to sort out. The first move of the FSLN in the National Reconstruction government (made up of just 5 people) was to install a State Council. This was a bourgeois-democratic body made up of 33 members in which all the social, political and trade union forces that accepted the Sandinista leadership were represented. In 1984, this parliament was transformed into the Nicaraguan National Assembly, by now a bourgeois parliament with a leftwing majority.

In this manner, the FSLN leadership preserved the traditional parliament and government structures of the capitalist state. Executive power was concentrated in the hands of the National Directorate which was chaired by the President of the Republic. In 1984 in a few days more than 80% of the population over the age of 16 registered on the electoral register. The election results revealed the huge support of the masses for the FSLN.

The hypocrisy of US imperialists had no limits even from a bourgeois-democratic point of view. They used the same old method of denouncing "repression in Nicaragua".

Nicaragua was the most democratic state in Central America

CDN (National Democratic Coordination) leader Arturo Cruz participated alongside other people in the first phases of the Sandinista government. A few months later he went over to the side of the Contra and denounced the 1984 elections as anti-democratic. (Have we not seen such examples also today in Venezuela?). The bourgeoisie never completely accepted the Sandinista government because it was not "theirs" and they could not rely on it to rule the country as they wished. The Sandinistas tried to reach an agreement with the bourgeoisie, to no avail. Believing in the myth of the "progressive bourgeoisie", the Sandinistas gave these elements a lot of room to manoeuvre, above all in the economic field.

After the victory of the 1979 revolution, the FSLN led the development of the new trade unions in the Sandinista CST (confederation of unions), which was the result of the merger of the two trade union federations controlled by the Stalinists. These "communist" trade union leaders enthusiastically accepted the task of holding back workers' struggles and the social pressure of the unemployed workers. The Agricultural Workers' Associations (ATC), the Youth Movement (MJS) and the CDS, which were established at ward level like the Cuban Committees in Defence of the Revolution (CDR), were also centralised. The problem was that none of these organisations held real power and all were transformed into mechanisms to implement the decisions from the top down.

"The mixed economy" ‑ a death trap (and a warning to Venezuela)

The FSLN immediately decided that the economy had to remain mixed. They gave no room for any debate among peasants and workers on major affairs of the revolution. The Sandinista leader and Government minister Jaime Wheelock stated on August 21 1979 to the French newspaper Le Monde that he boldly opposed "...all of those that want to accelerate the evolution of the regime in Nicaragua". Another Sandinista leader, and Home Affairs Minister, Tomas Borge, behaved in a similar manner.

Commander Humberto Ortega stated that, "national reconstruction must serve to reach a superior phase of political and social development. If we did not have this phase we could not have in Nicaragua a future liberal democratic society or any other kind of society [...] We state that [national reconstruction] is a phase of the popular-democratic revolution" (Granma, September 2 1979).

Imperialism could breath a sigh of relief as the immediate danger seemed to have been removed. And in order to make sure that the revolution did not divert from the bourgeois path a lot of well-respected social-democratic leaders landed in Managua Airport. Felipe Gonzalez from the Spanish PSOE, the French "socialists", Mario Soares from the Portuguese Socialist Party, the Swedish and Belgian social democracy, the German SPD, the reformist leaders of the Italian PCI all went to Nicaragua to offer their services.

The international social-democracy organised the raising of loans in Europe to help Nicaragua to service its foreign debt. This was a great example of "reformist internationalism" at the services of the big capitalists. Very soon the OAS (Organisation of American States) recognised the regime and after this came money from Venezuela, Costa Rica, Panama and Europe. Food and drugs were shipped from the US.

Weeks after Somoza had fled the country, imperialism had clearly understood what was behind the business-friendly messages issued by the FSLN recognising that this was a weakness they could exploit. Jimmy Carter said on September 11, 1979: "I am satisfied with the Nicaraguan government", while the Deputy Secretary of State Warren Christopher announced the very next day to the newspaper El Espectador de Bogota: "The Jimmy Carter government asked the Congress for a grant of 11 million for Nicaragua to reinforce the pluralist and moderate policies of its new revolutionary government. The outlook of the government, as has been revealed in its initial policies, has been moderate and pluralist and neither Marxist nor Cuban." And on October 29 1979 the ghost of the UN showed up with a resolution appealing for economic solidarity with Nicaragua.

As we explained at the beginning of this document, the revolution achieved great successes in the social fields. However, unlike the Cuban Revolution, a large part of the economy was left in the hands of the multinational companies (like the American colossus General Mills and Exxon, at that time the second biggest in the world) and the Nicaraguan bourgeoisie.

The economic plan of the Sandinistas known as "Fight Plan" stated: "We opposed the policy of regulation of the participation in the development of our country by foreign capital, other states and private companies, in the context of a mixed economy which offers room for the work of both sectors of popular and private property that will be interested in the national development". In other words, the "Fight Plan" accepted imperialist control of very important sectors of the economy.

The Sandinistas did not hand back full political power to the bourgeoisie, but they did leave in their hands a crucial weapon to undermine the conquests of the Nicaraguan Revolution. While the government was subsidising the private sector through tax cuts to get its support and collaboration, the capitalists boycotted the economy and supported the Contras!

The public sector represented 14% of GNP in 1977 but it had grown to 41% by 1980 after some expropriations had been carried out, mainly property of the Somoza family. Nonetheless, six years after the revolution (in 1985) the country was only using 60% of its productive capacity. In 1981 the interest on the foreign debt was consuming 40% of the country's revenues from exports. The narrowness of the productive base of a country as small as Nicaragua, which had fewer inhabitants than Caracas or Havana, meant that to stimulate genuine development what was required was a truly revolutionary initiative such as the expulsion of the bourgeoisie, and the establishment of a Socialist Federation with Cuba. Unfortunately, Moscow played a negative role in all this. It considered the Nicaraguan revolution an internal affair of the Sandinistas and approved with no reservations the economic policies of the FSLN. Havana, still heavily dependent on Moscow, went along with this policy.

The role of Moscow and Havana

Central to the defeat of the Nicaraguan revolution was the lack of understanding of the nature of the bourgeoisie on the part of the Sandinista National Liberation Front (FSLN). The Moscow bureaucracy, that was responsible for the tragic decline, and eventual fall, of the USSR was happy to leave things as they were. They made no real effort to stop the process of defeat in Nicaragua. Even trade between Moscow and Managua was very limited. Moscow did not want problems with US imperialists in Central and Latin America and was following a policy of diplomatic "peaceful coexistence" with the US, something which Che Guevara had criticised bitterly in the past. They did nothing to help the revolutionary movements in Latin America.

Why? Because the Soviet bureaucracy feared revolution in any part of the world. Successful revolutions would have upset the international balance of forces. It would have upset their idea of peaceful coexistence between their sphere of influence and that of imperialism. The Moscow bureaucracy claimed to be communist, socialist, etc. but in reality it did not want to see genuine socialism at home or abroad. The Moscow government in reality detested Che Guevara and even in the case of Cuba had not supported the radicalisation of the revolution. In 1960, two years after Castro's coming to power, the Soviet bureaucracy was forced to accept the eradication of capitalism in Cuba as a fait accompli. However, what they did do was to do their best to stop the revolution from expanding to the rest of the continent.

In 1979 and 1980, to their credit, the Cuban government called for a campaign of solidarity with Nicaragua. They addressed all capitalist countries of Latin America and the world, even the US, but strangely enough not China or the USSR. Cuba even discouraged Nicaragua from associating economically with the Soviet bloc. This was in reality a form of pressure on the Sandinistas to maintain their alliance with the democratic bourgeois governments in Central America and the Caribbean instead of with the USSR. On January 11, 1985 Fidel Castro declared in Barricada, the central organ of the FSLN:

"Yesterday we had the chance to listen to the speech of comrade Daniel Ortega and I have to congratulate him. He has been serious and responsible. He has explained the aims of the Sandinista Front in every sector: a mixed economy, political pluralism and legislated foreign investment [...] I know that in your conception there is room for a mixed economy. You can have a capitalist economy. What you are not, without any doubt, going to have is a government serving the interests of the capitalists."

What Comandante Fidel Castro then did not say was that a government cannot serve the interests of the working class and at the same time grant imperialism a free hand in the national economy. Meanwhile, as all those speeches were taking place, the youth and militant workers of Nicaragua were marching through the streets of Managua to strengthen the anti-imperialist resistance shouting: They shall not pass!

The new international scenario and the defeat of the revolution

Despite their treacherous role, it was not the fascist Contra paramilitaries that defeated the revolution. Popular resistance had demoralised the Contra and they had been cornered by the mid-1980s. The real reason the revolution was defeated was to be found in a combination of factors. There was the fall in the price of oil and raw materials under the absolute control of the dictatorship of the multinationals, combined with internal and external sabotage by the Nicaraguan bourgeoisie who had sold their country out.

Living conditions started to fall shortly after the coming to power of the Sandinistas. Inflation reached 400% in 1987 resulting in a black market that fed 130,000 people - about 5% of the population. This explains why workers started to come out on strike and why a desperate population looted shops in Managua. The government replied by banning the right to strike and declaring a state of emergency as a response to the constant menace of the US government headed by Ronald Reagan. The state was forced to spend 40% of Nicaragua's GNP on weapons to defend the country while the private sector carried on its boycott campaign.

In addition, the election of Reagan coincided with a new international situation. Big capital in the United States had changed its view about the Latin American situation. They saw that although the dictatorships they had previously supported had been overthrown, the capitalist domination of these countries had been preserved. This was due of course to the lack of revolutionary leadership. Towards the end of the 1980s, the puppet regimes in El Salvador and Colombia understood that their bloody regimes had to put on a democratic mask, behind which the massacre of the working class and peasants could continue. Added to this was the fact that the Stalinist regimes were in deep crisis, as was their international influence.

In Europe there was a temporary lull in the struggles of the working class and youth and also in the US there was a relative calm on the home front. In Asia, the dictatorship in the Philippines had been defeated by the mass mobilisations but the Maoist and Stalinist two-stage theory meant a clear revolutionary opportunity had been lost. The new democratic bourgeois government of Cory Aquino was on very good terms with Reagan. Reactionary guerrillas in Afghanistan, financed and backed by the US through Pakistan, were harassing the Russian Army. The world economy had recovered from recession and the Reagan administration felt strong enough to take on the Sandinistas with the paramilitary Contras and their propaganda campaign.

Morale among the Nicaraguan people started to fall rapidly and scepticism towards the Sandinista government began to creep in. It was only the imperialist threat that prevented the development of an open left-wing opposition within the ranks of the Sandinista movement. In 1989 inflation peaked at an incredible 36,000% and the average person's income was half of what it had been in 1977. The situation was becoming desperate and the government was hanging from a thread. Social spending had been cut and it hit rock bottom in 1990, a crucial election year.

The collapse of the USSR and the Eastern Bloc at the end of the 1980s contributed to a further demoralisation of the Sandinista leadership and it started to look for solutions by shifting to the right, economically and politically. As a result, the timid land reforms were suspended and they buckled under the pressure of private business. Corruption among civil servants started to become widespread.

 Daniel Ortega
 Daniel Ortega

Daniel Ortega, president of the Sandinista Front, had lost complete touch with reality when he declared to L'Unità, the daily newspaper of the Italian Communist Party (PCI) that, "We have kept our promises, we have kept a mixed economy as well as economic pluralism. The Swedish model is the model that we Nicaraguans look to with interest." (interview with Daniel Ortega 5.5.1989). The problem was that Sweden had a much more powerful state sector than Nicaragua and the Swedish bourgeoisie had come onto the scene of history 300 years earlier. Once again we see that there is no room for more rich people. The Sandinistas lost power in the 1990 elections. It was a vote against hunger and misery, a protest vote against a government of the FSLN that lost the elections that day.

The political shortsightedness of the Sandinista leaders today stands fully exposed, as we can see in a speech in 2004 by Daniel Ortega, the General Secretary of the FSLN. In referring to the 1990 elections in which the USA poured a mountain of dollars into funding anti-Sandinista propaganda, Ortega stated:

"We were entering the most corrupt game with total honesty [...] Apart from the good intentions [!] that the people in power [right wing politicians] may have had in 1990, or in 1996, or the ones we have right now, apart from their intentions of trying to do the best for Nicaragua [!!], the truth is that they lacked a firm stand in the face of the Nicaraguan people, with the Sandinista Front and with which to fight a dignified struggle to save our interests as a nation, to save our sovereignty, our political and social sovereignty.

"But to do this we need a government that operates with flexibility, with an open mind and above all, with a sense of dignity and a sense of sovereignty; because so far the last thing the governments that we have had, has been a sense of dignity and sovereignty. It is painful to say this. It is a shame for us to have to say this, but it is the truth. We would like the current government to gain prestige by immediately tackling the problems of production, food, health, the education of our country; then they can say that they are doing this for the good of Nicaragua." (meeting in Managua, July 19, 2004).

After such a bitter experience and lacking the compass of Marxist theory, the top leaders of the Sandinista movement still dream of a "national progressive bourgeoisie" in a country where half of the population is unemployed and more than half of the national budget is spent on paying the foreign debt. However, the one thing that the right wing politicians did not manage to erase was the important tradition of struggle of the Nicaraguan working class. The struggle of Augusto César Sandino and of all the revolutionary martyrs of Nicaragua are a tradition that cannot be buried. The seeds of revolution will grow again. This time the revolution will separate the reformists from the revolutionary leaders win the Sandinista movement.

The revolution returns, on a global scale

The Venezuelan revolution that we are currently experiencing is the fruit of a changed international situation. The whole world situation is rebelling against imperialism. Today on a world scale we have present at the same time revolutionary factors that occurred separately in different historical periods over the last century:

1) The transition from an epoch of protracted development of the productive forces on a world scale to a new epoch of global crisis of imperialism that has already started (similar to the impasse at the beginnings of the 20th Century). This is provoking a very unstable situation in world relations with the perspective of wars, revolutions and counter-revolutions.

2) The aggressive nature of US imperialism combined with a weakening of its power base. The US is both socially and economically fragile and is having to open too many international fronts (similar to the period of defeat during the Vietnam War and the oil crisis of 1973-75).

3) Extreme polarisation of society and the resurgence of revolutionary struggles throughout Latin America as well as the end of peace and stability in the most developed capitalist countries. There is also a heightened international anti-imperialist awareness.

In this equation there are also new elements that contribute to a heightened level of class struggle:

1) The numerical strength of the working class on a global scale and the huge increase of the abyss between a privileged minority and the exploited majority of society.

2) The confidence of the exploited peoples in their own ruling classes in Asia, Africa and Latin America is diminishing rapidly. These "national bourgeoisies" have had between 50 and 100 years of so-called independence to develop "their" countries and they have failed.

We have entered a decisive epoch of world revolution. Venezuela is in the vanguard of this process. As in Nicaragua in the past many reformist "advisers" are seeking to hold the revolution back. They say we must have a mixed economy, i.e. a capitalist economy. They say we must slow down the pace of the revolution; we must involve the "progressive" bourgeoisie. All this is very similar to the reformist policies that led to the defeat of the Nicaraguan revolution. With the help of revolutionary Marxism, the working class will learn from the lessons of the past. They will learn to avoid the mistakes that were made in Nicaragua and in other failed revolutions. On this basis they can achieve victories. They will repeat the victory of the Russian revolution and base themselves on the best traditions of genuine revolutionary Marxism. Our task is to bury capitalism starting with a Socialist Federation of Venezuela and Cuba and then spreading this to the whole of Latin America and beyond.

Note 1: The following resources were most useful in preparing this text: Nicaragua: Reforma o Revolución by Carlos Vig (Bogotá 1980), the document Nicaragua: due secoli di rivoluzione published in 1987 by the Italian Marxists of FalceMartello; the pamphlet Cuba: pasado, presente y futuro published in 2004 by the Spanish Marxists of El Militante and the official Website of the FSLN

Note 2: This article is a slightly edited version of a text written in 2004 before the Sandinistas came back into office.

See also:

Join us

If you want more information about joining the RCI, fill in this form. We will get back to you as soon as possible.