The Military revolt which seized Lisbon and overthrew the Caetano government on 25 April 1974 toppled in a morning the most long lived fascist State in history and one of the most stable capitalist regimes anywhere this century. By the same stroke it set the stage for the end of the oldest colonial empire in the world. Thirteen years of guerrilla war in Africa had sapped the whole economy and society of metropolitan Portugal, and destroyed the allegiance of most of the younger officers in the Army and Navy to its political system. The coup itself encountered minimal resistance: yet for the same reason it initially left intact an important part of the State apparatus of Salazarism. But the tutelage exercised by the corporate State over the whole of civil society was immediately suspended, and the fascist secret police rounded up. For the first time in three decades a Communist Party entered the government of a West European country. Immediate and massive popular acclaim met the take-over from above of 25 April. A generalized social assault from below was unleashed upon the structures of the old order. A wave of workers’ struggles challenged the economic pattern of Portuguese capitalism while, under pressure from the African liberation movements, decisive steps have been taken towards independence for the colonies.

The question of who holds power in Portugal has yet to be definitively resolved. So far attempts by bourgeois reaction to install General Spinola as a national saviour have been heavily defeated. But, as we shall see, there are deeply antagonistic forces contained within the structure of the present government and armed forces. Today, Portugal is the most explosively unstable country—the nation nearest to a classic pre-revolutionary situation—in the imperialist world, itself now everywhere gripped by international recession.

Portuguese capitalism, with the weakest home base of any European colonial power, clung all the more tenaciously to its imperial lifeline. In Angola and Mozambique widespread forced labour furnished superprofits to the companies which owned the sugar and coffee plantations, the cotton fields and the diamond mines. Labour conscription within the colonies was supplemented by the export of several hundred thousand contract labourers to South Africa. Much of the earnings of these workers was handed over directly to the Portuguese government in gold, playing a vital part in sustaining the escudo as one of the world’s soundest currencies. Marcelo Caetano declared in the thirties: ‘Africa is more than a land to be exploited . . . Africa is for us a moral justification and a raison d’être as a power. Without it we would be a small nation; with it we are a great power.’footnote¹

Guerrilla resistance began in Angola with an urban insurrection in Luanda in February 1961; in Guinea the paigc began military operations in August 1963; and in Mozambique frelimo launched its first attacks on Portuguese outposts in September 1964. At considerable cost to the Portuguese government the initial revolt in Angola was contained. Although guerrilla warfare was resumed on a significant scale in the mid-sixties, the liberation movement in Angola was greatly weakened by a right-wing split (led by Holden Roberto) within it. In Guinea-Bissau the paigc quite rapidly established control over a third of the territory but was unable to break out of this zone. The liberation struggle in Mozambique represented the most dangerous threat to Portugal’s African empire. Stable base areas were established in the north, and a series of offensives launched in 1973 and early 1974 began to make serious inroads on the economic heartlands of the colony.footnote² However, even containing the liberation forces between 1964 and 1974 cost the Portuguese forces 60,000 casualties. Portugal, a country of nine million inhabitants, was supporting an army of 200,000, three quarters of it deployed in Africa. Nearly half the Government budget was taken up by military expenditure, at the cost of education and the public services. West Europe’s poorest country was applying the highest proportion of national income to its military (7·2 per cent, compared to Italy’s 3 per cent and Spain’s 2·2 per cent).footnote³

The champion of ‘civilization’ in Africa had an adult illiteracy rate of 40 per cent and the highest infant mortality rate in Europe. Nearly a fifth of Lisbon live in shanty town dwellings (barracas), while there are virtually no medical services in the countryside and many villages even lack electricity. Throughout the sixties Portugal had the lowest domestic capital formation as a proportion of its national income of any country in Europe—just behind Britain. Added to the direct economic and social cost of the colonial wars, there was also growing diplomatic isolation. By the end of 1973 it seemed likely that the newly declared Republic of Guinea-Bissau would be admitted to the United Nations, while Portugal’s economic problems were compounded by the decision of the Arab states to operate a total embargo on all oil exports to Portugal.

The onset of the colonial wars imposed a new pattern on the Portuguese economy. Salazar’s regime had emerged from a military putsch in 1926; however it did not assume final shape until the early thirties. Salazar pursued fiercely protectionist policies and made it difficult for foreign capital to enter the country. This helped to strengthen the position of the large consortia which dominate Portuguese capitalism. The largest of these groupings is the Companhia União Fabril (cuf) which by the late 1950s commanded a tenth of all industrial assets, accounting for the major share of the country’s soap, chemical and textile industries. The other main consortia are those centred on the Espirito Santo bank, the Champalimaud Group, the Portugues do Atlantico bank and the Borges e Irmão company.footnote⁴ These sprawling cartels were unable to mobilize the resources necessary to develop simultaneously the economy of metropolitan Portugal and that of the colonies. The Portuguese state was economically too weak to extend to the large corporations the type of public assistance now normal in the advanced countries; indeed the companies operating in the colonies were obliged to supply a wide range of free goods and services to the Portuguese armed forces.

The Salazar regime thus found itself forced in the early sixties to follow the Spanish example and abandon its protectionist policies and restrictions on foreign capital. This move was welcomed by most of the large consortia, which wished to draw on the resources and expertise of the major imperialist corporations and also to integrate the Portuguese economy into the expanding European market. Thus cuf joined with Dutch and Swedish ship-building interests to develop lisnave, now the world’s largest ship repair and conversion yard. Portuguese subsidiaries were established by such companies as itt, Timex, Ford, Grundig, Renault, British Leyland and Plessey. Their plants were designed both to assemble for the Portuguese market, including the colonies, and to take advantage of low wages and repressive labour conditions. Thus, to defend its colonial empire, Portuguese capitalism was forced to permit the colonization of many sectors of its domestic economy. Although Portugal’s oldest export trades, in wines and cork, were dominated by Britain, the foreign stake in Portuguese industry was only 1·5 per cent in 1960. By 1970 this had risen to 27 per cent.footnote⁵ As we shall see the events since 25 April have thrown a revealing light on the type of development promoted by such foreign capital in the sixties.