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Class Views of the Grand Canal of Nicaragua

Those familiar with British economic history will know of the 1840’s “railway mania.” During a few years in this decade British railways expanded rapidly as investors poured their money into tracks and rolling stock. Industry and the factory systems were already established, surplus labour was available and those with cash to spare felt confident.

There was indeed a remarkable expansion of the railway system. But for many investors it also ended in tears amid a crisis of capitalism. The maniacs went puffer mad and suffocated amidst an oversized railway industry.

In the Americas, during these early years of the 21st century, there is the making of what may well turn out to be a variation on a similar theme. Instead of the English midlands and other manufacturing centres reaching out to city ports like London and Liverpool, or Glasgow in Scotland and Cardiff in Wales it’s something of a historical reverse.

The canal craze, if that is what it is, is headed by the Grand Canal of Nicaragua. The cost of the proposed canal linking the Atlantic and Pacific oceans is estimated at US$ 50bn. The company undertaking this is the Chinese based Hong Kong Development Group (HKND) headed by Wang Jing whose previous business background is in telecommunications. Nicaragua’s Sandinista government headed by President Daniel Ortega claim this is Nicaragua’s ladder out of poverty.

For Nicaragua’s part, in the translucent information flow which is part of everyday life here, HKND will be given a 50 year concession, possibly stretching to 100 years, to build and run the canal. This will require dredging a channel across Central America’s largest fresh water source, Lake Cocibolca.

In return Nicaragua will receive US$10m annually when the canal becomes operational. Beyond that is a mass of financial and legal detail which edges ever closer to the opaque.

But taken all together it appears that Nicaragua is being visited by the rentier class. Rentiers, as Marx called them, differ from financiers who thrive on compound interest, or merchant and manufacturers who profit from buying then selling or produce goods for sale. Rentiers secure land and other (often natural) resources. These take on the characteristics of commodities which are exchanged for rent.

Another water way, the Panama Canal, opened its lock gates to traffic 101 years ago. At first this canal was operated under the auspices of the USA. The Colossus of the North had successfully promoted – better to say provoked – the province of Panama to break away from the Republic of Colombia. This made it easier for JP Morgan bank transfers and the US military to supervise construction work. Under Jimmy Carter’s tenure in the White House control of the canal was given to Panama.

For a century the dimensions of the canal determined the dimensions of much of the world’s shipping. The shipping industry term Panamax refers to the maximum length of a middle range of ships which can pass though the locks at both ends of the canal. However Panama has set about enlarging the canal’s capacity, so allowing it to facilitate the passage of bigger ships. This is due to open in 2016.

Before Panama the only sea route between the two oceans was via the south of South America. It was either south of the Tierra del Fuego Island, at the tip of that continent or between the island and the Chilean mainland. The latter passage, the Straits of Magellan, was named after the Portuguese explorer who was the first European to make the crossing in 1520.

I made the voyage as an engineer on a tramp ship in the late 1960s. I can’t recall seeing many other ships although nowadays my old, chug-along tramp seems to have been surpassed by the luxury tourist cruse trade.

To the north of North America lies the North West Passage. In my day and for centuries before, this was a no-no for ships. Remember reading about John Cobalt who set sail from England in 1498? He hoped to find a channel through the ice packed seas at the north of Canada that would take him from the Atlantic to the Pacific. He was never seen again.

Some might want to deny climate change. But in September 2014 the Canadian owned ship, mv Munavik, with a 23000 ton cargo of nickel concentrate sailed from Canada to China via the North West Passage. The North West passage is a goer, even if it is not a threat to the other options. It certainly cuts a lot of time off the Central American routes for those wanting to carry goods between North West Europe and the gate way ports of eastern Siberia and China.

So we can see and to some extent define the capitalist’s interest in the canal. The merchant class has little to gain; the production and manufacturing interests are at present peripheral. Finance interests are considerable but for the next 50 to 100 years the rentier class will vie with the finance class for control.

Those on the left, and even some on the right, have little difficulty in accepting the contradiction between the interests of capital and interests of labour. But capitalism has other contradictions to cope with.

Let me explain this though an example a Belfast trade unionist shared with me.

Northern Ireland is a community divided by political traditions often associated with religious differences, even though both the politics of Irish nationalism and British unionism generally identify with Christianity. It’s a community not noted for progressive views; homosexuality is a criminal offence under law and creationism is a prevalent religious force challenging science education. A small, dogged, radical tradition does persist although conflicting mainstream traditions don’t mention it much.

My trade unionist friend explained that left wing activists have to cope with a contradiction between reality and illusion. Sometimes the illusion – perceptions held of one tradition with regard to those they oppose, becomes the reality. At other times reality, say, lack of jobs or a deficit of human rights, becomes an illusion. This illusion/reality contradiction can both stifle and breathe life into dialogue and action. The former seems to hold the upper hand most often.

Back in Nicaragua, those in favour of the canal continue to make their case, as is their right. Environmentalists present and campaign for more information and transparency on canal proposals, setting out their view of the associated ecological dangers (See theconversation.com February 19, article by Jorge Huete-Perez)

On Sunday 13 June BBC World News carried a news article on Nicaragua. This channel usually avoids any mention of Latin America like a swarm of malaria carrying mosquitos. Except of course is it’s on kicking a football about a patch of grass.

The news piece highlighted a protest staged in the city of Juigalpa, close to Lake Cocibolca. According to La Prensa, a conservative daily paper, this was protest number 46 organised against the canal. More are planned including what is described as a “national production stoppage.”

Viewed as a whole, within Nicaraguan society, the canal phenomenon shows contradictions which might yet nurture resistance to the interests of capital.

Some of these include; a conflicting unity of national sovereignty and the interests of a privately owned Chinese company, the quality of life with particular regard to clean water supply and effects of dredging operations in the construction and maintenance of a navigable channel across Lake Cocibolca, to say nothing of indigenous minority’s land loss and way of life rights and the anticipated improvement in the quality of life for the general population.

There are external contradictions with which the canal might have to contend. Consider a dip in world trade, a shift in technology away from larger ships and their copious carbon emissions, or jittery investors with other concerns on their minds. Tearful transport shareholders may not just be phenomena of the 19th century.

Sam Gordon worked in a Belfast factory, then an engineer in the merchant navy, a trainer, researcher and co-coordinator of community projects in Scotland. A graduate from various universities, on a good day he claims he’s a decorative artist and sometimes writer. Most days he’s a blacksmith, welder, and painter in Nicaragua.

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Sam Gordon worked in a Belfast factory, then an engineer in the merchant navy, a trainer, researcher and co-coordinator of community projects in Scotland. A graduate from various universities, on a good day he claims he’s a decorative artist and sometimes writer. Most days he’s a blacksmith, welder, and painter in Nicaragua.

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