From pearls to oil: Venezuela’s long history of boom-and-bust

Venezuelans deeply divided over the way their country is managed. EPA/JORGE CASTELLANOS

Protests continue unabated in Venezuela over inequality and abuses of power, with even the anniversary of Hugo Chavez’s death unable to restore calm to the country. Despite sitting on the world’s largest oil reserves, many of Venezuela’s citizens struggle to afford basic goods. Indeed, Venezuela has a long history with commodity boom-and-bust cycles and the inequalities and unrest they produce.

And by long history, I don’t mean since the 1920s, when Venezuela’s oil boom began. I mean since the 1520s when the promise of pearls wrested from coastal oyster beds transformed the region’s economy. It is hard not to marvel at how the exploitation of natural resources has shaped this country’s history, and to ponder the economic and social costs of these periodic bonanzas.

Commodity promise

In the early sixteenth century, as today, Venezuela’s future hinged on the promise of a particular commodity and the problems associated with its exploitation. It was pearls, not oil or precious metals that first drew Spanish attention to this section of the South American coastline. Treasure hunters initially traded for pearls with indigenous residents of the coast and adjacent islands of Margarita and Cubagua.

When relations with the locals soured, Spaniards cast their net wider, enslaving people from the Bahamas to Brazil. In pursuit of profits, the colonial elite forced thousands of divers into a brutal labour regime in search of the jewel. The patterns of natural and human resource exploitation established in the Venezuelan pearl fisheries long outlasted the profits they produced.

As the desire for pearls prompted a forced diaspora of labourers from the Caribbean to the West African coast, it also brought shifts in political and economic capital within Europe. Then as today, the promise of this natural resource brought important foreign investment to Venezuela. The Spanish crown granted the German banking family, the Welsers, administration of the colony in return for financial and political support.

High costs

But even at the height of the pearl boom there were naysayers, people who observed the high costs of this extractive regime. Some residents of the Pearl Coast (as the region came to be called) lamented the effects of such intensive harvesting on the region’s ecology and sought protective measures for the oyster banks. Other observers focused on the human costs of the pearl industry. Dominican friar Bartolomé de Las Casas, the famed defender of America’s indigenous peoples, condemned prevailing practices, claiming that the horrors of pearl diving exceeded those of labouring in the silver mines on the American mainland.

The dangers of pearl diving were considerable: exploding eardrums, shark attacks, a punishing whip for divers who moved too slowly or failed to deliver the right numbers of oysters to the boat. The greed of Spanish investors led to over-fishing, with enslaved divers harvesting young and mature oysters willy-nilly, tearing up the seabed that nourished them in the process. In the frenzied atmosphere, the corpses of slaves who drowned or died while in the water were often left there, the lifeless bodies drawing sharks to the vicinity and further endangering the surviving divers.

Today’s oil refineries do not rely on similar labour regimes. Profits are greater and less easily shared than those created in the pearl fisheries. Pearls, unlike petroleum, do not need to be refined in order to render profit. Pearls’ immediate perfection and accessibility gave those who strived to retrieve them a small but important degree of power. The divers at the heart of this industry would secret away the best specimens for themselves and relinquish the pearls to their putative masters only in return for highly-desired goods, such as playing cards, wine and clothes. Slippery, small pearls constantly evaded monopoly control.

It is worth recalling how this long-ago maritime boom ended: in the exhaustion of a natural resource; in the creation of a labour regime and social order that undermined monopoly control; in the formation of a regional economy where pearls abounded and all else was scarce.

Reflection on the enduring costs of extractive economies is not new in Venezuela, where the influence of the country’s early pearl boom on a national culture of exploitation has long been a matter of public and literary reflection. But in Venezuela as elsewhere throughout the Americas, colonial legacies of violence and inequality continue to defy resolution. It is sobering to remember how long and tortured a history the country has with the natural wealth that sustains and warps its present as it did its past.

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