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By Peter T. Knight

This paper was presented at the November 2-4, 1978 Workshop on "The Peruvian Experiment Reconsidered" organized by the Latin American Program of the Woodrow Wilson International Center for Scholars.

Summary

Those who formulated the Social Property Sector (SPS) in Peru saw its implementation, with strong assistance from the Peruvian state, as both the primary means of carrying out a transition to socialism and the mode of economic organization which would create socialist relations of production. The social property legislation and its supporting literature embody the
most original and creative thinking of the "Peruvian Revolution," and its greatest hopes in the economic sphere. Once described by Velasco as destined for hegemony within a pluralistic economy, the SPS today is marginalized and
for the most part barely surviving.

This paper begins by posing the basic objectives of a socialist society and the problems of the transition, emphasizing--with the help of some simple didactic diagrams--the problem of satisfying the basic needs of the population while permitting capital accumulation. The second section reviews briefly how the mechanisms set forth in the social property legislation were intended to achieve these objectives. The third section analyzes the SPS implementation process from May 1974 to the end of 1978, showing how a lack of any strong. organized political support for the SPS outside parts of the military and the technocracy, coupled with a deepening economic crisis, forced major changes in SPS development strategy, resulting in a virtual halt to its expansion, but not its elimination.

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