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DEPENDENCY THEORY

Hirschman, Albert O. (1961) (ed.) Latin American Issues: Essays and Comments, New

York: The Twentieth Century Fund.

Withers, William (1964) The Economic Crisis in Latin America, London: The Free Press of Glencoe, a division of Collier-Macmillan Limited. Frank, A. (1969) Latin America: Underdevelopment or Revolution--Essays on the Development of Underdevelopment and the Immediate Enemy, New York: Monthly

Review Press.

Prebisch, R. (1970) Change and Development: Latin America's Great Task, Washington,

DC: The Inter-American Development Bank.

Alschuler, Lawrence R. (1978) Predicting Development, Dependency, and Conflict in Latin America: A Social Field Theory, Ottawa, Canada: University of Ottawa Press. Bernstein, H. (ed.) (1978) Underdevelopment and Development: The Third World Today,

New York: Penguin.

Wallerstein, I. (1979) The Capitalist World Economy, New York: Cambridge University

Press.

Chilcote, Ronald H. (ed.) (1982) Dependency and Marxism: Toward a Resolution of the

Debate, Boulder, Colorado: Westview Press, Inc.

Cross-American Sociological Review, Vol. 48, pp. 468-479. Wallerstein, I. (1983) Historical Capitalism and Capitalist Civilization, London: Verso, pp. 13-137. Blomström, Magnus, and Hettne, Björn (1984) Development Theory in Transition, The Dependency Debate and Beyond: Third World Responses, London: Zed Books Ltd. Chilcote, R. (1984) Theories of Development and Underdevelopment, Boulder, CO:

Westview Press.

Walton, J. (1984) Reluctant Rebels: Comparative Studies of Revolution and Underdevelopment, New York: Columbia University Press, pp. 141-171. 2 Reitsma, H.A., and Kleinpenning, J. (1985) The Third World Perspective, The

Netherlands: Rowman and Allanheld.

Apter, D. (1987) Rethinking Development: Modernization, Dependency, and Postmodern

Politics, Newbury Park, CA: Sage Publication.

Simpson, E.S. (1987) The Developing World: An Introduction, Essex, England: Longman

Scientific and Technical.

Evans, P. and Stephens, J. (1988) "Studying Development Since the Sixties: The Emergence of a New Comparative Political Economy," Theory and Society, No. 17, pp.

713-745.

-42. Chase-Dunn, C. (1989) Global Formation: Structures of the World Economy, Cambridge,

MA: Basil Blackwell, pp. 201-333.

Kay, Cristóbal (1989) Latin American Theories of Development and Underdevelopment,

London and New York: Routledge.

Larrain, Jorge (1989) Theories of Development: Capitalism, Colonialism and

Dependency, Cambridge, UK: Polity Press.

Martin, Michael T. and Terry R. Kandal (1989) (Eds.) Studies of Development and Change in the Modern World, New York: Oxford University Press. Amin, S., Arrighi, G., Frank, A., and Wallerstein, E. (1990) Transforming the Revolution: Social Movements and the World System, New York: Monthly Review Press. Jaffee, D. (1990) Levels of Socio-economic Development Theory, New York: Praeger. So, A. (1990) Social Change and Development: Modernization, Dependency, and World- Systems Theory, Newbury Park, CA: Sage Publications. Alcalde, Javier Gonzalo (Series Editor: Kenneth W. Thompson) (1991) Development, Decay, and Social Conflict: An International and Peruvian Perspective (Volume II in the Miller Center Series on A World in Change), Lanham, Maryland and London, UK: University Press of America. [Co-published by arrangement with The Miller Center of

Public Affairs, University of Virginia.]

Peet, R. (1991) Global Capitalism: Theories of Societal Development, New York:

Routledge.

3 Packenham,, R. (1992) The Dependency Movement: Scholarship and Politics in Development Studies, Cambridge, MA: Harvard University Press. Hout, Wil (1993) Capitalism and the Third World: Development, Dependency, and the

World System, Vermont: Edward Elgar.

Benefit the Masses?

American Sociological Review,

1994, vol. 59, pp. 631-653.

-Third World Quarterly, vol.16, no.4, 1995, pp.595-606. Chew, S., and Denemark, R. (1996) The Underdevelopment of Development: Essays in Honor of Andre Gunder Frank, Thousand Oaks, CA: Sage. Kempe, R. (1996) Development in the Third World: From Policy Failure to Policy

Reform, New York: M.E. Sharpe Armonk.

Alschuler, Lawrence R. (1978) Predicting Development, Dependency, and Conflict in Latin America: A Social Field Theory, Ottawa, Canada: University of Ottawa Press. Wood, Charles H. and Bryan R. Roberts (2005) (Eds.) Rethinking Development in Latin America, University Park, Pennsylvania: The Pennsylvania State University Press. Alcalde, Javier Gonzalo (Series Editor: Kenneth W. Thompson) (1991) Development, Decay, and Social Conflict: An International and Peruvian Perspective (Volume II in the Miller Center Series on A World in Change), Lanham, Maryland and London, UK: University Press of America. [Co-published by arrangement with The Miller Center of

Public Affairs, University of Virginia.]

-Dependent Development: Theoretical and Practical -176. -312. Sunkel, O. "National Development Policy and External Dependence in Latin America,"

The Journal of Development Studies.

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DEPENDENCY THEORY

Hirschman, Albert O. (1961) (ed.) Latin American Issues: Essays and Comments, New

York: The Twentieth Century Fund.

-42

Ah, says one

on the Indian; on the foreigner; on democracy; on dictatorship; on bookishness; on ignoranc (1949:105) Extremos de América, Mexico City: Tezontle. 3 ones, of economists and political philosophers to recognize the importance of these ideas for the shaping of reality. 4 151
Speeches and articles by Latin American economists and government officials favorable to the free trade area have constantly emphasized the relationship of broader markets and planned integration to economic development. The regional integration movement is not an expression of a conversion to the doctrine of free trade and competition. Moreover, except for the hope that regional commodities can displace imports from the rest of the world, thinking about the Treaty and its operation tends to look toward the future as it affects the pattern of investment. This, of course, is consistent with the generally accepted principle that existing industries should not be hurt by competition from other members as a consequence of the granting of tariff concessions. 149 Withers, William (1964) The Economic Crisis in Latin America, London: The Free Press of Glencoe, a division of Collier-Macmillan Limited. If we grant that industrialization is desirable for Latin America, and that it is seriously limited (1) by low incomes which make it difficult to save and create capital domestically, (2) by the declining terms of trade which make it impossible to import enough capital for rapid development and (3) by the inelasticity in the demand for Latin American exports, what are the ways out of this stagnant situation? Dr. Prebisch considers three possibilities: (1) forced saving or some method of inducing a greater amount of domestic capital accumulation, (2) greater efforts to increase the volume of exports and efficiency in primary goods production, and (3) foreign loans and aid. Of the three alternatives, he chooses 5 the last. Austerity or forced saving is not only a very strenuous and difficult policy to follow, but one which he thinks is not politically feasible. An increase in the volume of exports may only reduce prices without increasing the grow income and hence the import capacity derived from foreign trade. It may increase the backwash effects on domestic industry. In the past, increased productivity in primary production has been absorbed by the rise in prices of manufactured goods purchased abroad, leaving the primary producers without any gain from their increased productivity. 76 To broaden the diagnosis, the following causes of underdevelopment must be added: (1) The lack of disease control in tropical countries for plants, animals, and humans. (2) The population explosion. (3) The political influence of the hacendados and the army. (4) Antiforeignism, which results in the refusal to accept foreign capital and technicians needed for the development of resources. (5) Lack of education. (6) The persistence of antiwork and antibusiness attitudes. (7) The failure to encourage the development of the entrepreneurial classes. (8) The failure to plan for diversified and balanced agricultural and industrial growth. (9) Failure to undertake austerity programming when it is politically feasible i.e., forced saving and balanced budgets. (10) Failure to curb the foreign investment of capital by nationals. (11) Failure to curb inflation. (12) In general, failure to follow fully or consistently the economic policy revolution. 77 Huge foreign loans and aid discourage self-reliance and the growth of the domestic saving and investment upon which growth of the domestic saving and investment upon which economic take-off must ultimately depend. Contrariwise, reliance unduly on capital independence retards growth to the point where a take- off may never be reached or is postponed for many years. 78 From a social and political standpoint, the elements needed for rapid Latin American development have already been discussed. It remains only to summarize them briefly here. The needs are (1) political stability, (2) removal of the threat of expropriation, (3) removal of the threat of communism, (4) more general and technical education, (5) education in the values and goals favorable to economic enterprise and to productive work in an industrial system, (6) the reduction of too rapid population growth, (7) the rapid development of social overhead capital, and (8) the replacement of the hacendados and military by the new middle-class liberal businessmen and politicians in the seats of political power. 81 Thus far (1964), both the United States and the Latin American nations have failed (1) to understand the meaning and significance of the economic policy revolution, (2) to accept a development theory which is based on it, (3) to assess realistically the seriousness of the obstacles standing in the way of a sound development plan, and (4) to accept the extreme importance of promoting Latin American middle class leadership. The programs have been piecemeal and diminutive. 84 To change from a handicraft and primitive agrarian economy into an advanced industrial nation requires a number of steps, although they may not be taken in the exact order in which we shall list them: 1) Agricultural technology must be improved and machinery and other capital applied to farming so that farmers can 6 produce enough to feed not only themselves but also two to five additional families in the cities. (2) Excess population on the land, resulting from greater agricultural productivity, must be transferred to the cities and given employment there. (3) City employment requires the growth of manufacturing, services , and trade but it requires mainly the growth of manufacturing. (4) The needed industrialism depends in its turn on the growth of capital. Capital can be obtained either from domestic saving or foreign investment. (5) Since people in poor underdeveloped countries cannot save very much, foreign aid and investment are needed. Without them, growth will be retarded. Somehow foreign investment and aid must be accepted despite strong nationalism. If foreign investment and nationalism prove incompatible, the consequences are unfortunate. 111 When then is the nature of Latin American economy? It may described by dividing it into basic sectors. (1) Primitive Indian culture consisting of subsistence agriculture. (2) Large estates producing basic crops such as coffee, sugar, bananas, cacao, wheat, wool, and meat. (3) Small land holdings or cooperatives producing basic or diversified crops. (4) Small handicraft manufacturing of products such as Panama hats in Ecuador, or leather goods in Argentina and Mexico. (5) Small-scale manufacturing using machinery. (6) Large industrial plants under government or private auspices. (Much direct foreign investment is of this nature.) (7) Retail and wholesale establishments, mostly on a small scale, (8) Service enterprises, for the most part also on a small scale. (9) The professions (doctors, lawyers, teachers, engineers). (10) Government employees. (11) Railways and other transportation services. (12) Telephones, telegraph, radio and television. (13) Building construction. (14) Public utilities providing gas and electricity. (15) Mining. (16) Banking, finance, and insurance. Perhaps a third of the whole economy consists of the first sector, more than another third of the second and third sectors. The remainder is made up of sectors four to sixteen. 112 There is a rapidly increasing demand for chemical products such as sodium bicarbonate, fertilizers, and pharmaceuticals. Latin America has a growing market for these and other products, but two factors have thus far retarded growth in this field: (1) import restrictions on chemical raw materials imposed to save foreign exchange for products regarded as of greater economic importance, and (2) inability to develop a wide enough market demand to justify large plants in the field of heavy chemicals where low costs of production depend upon large- scale operations. 119 The Committee for Economic Development has pointed out that American subsidiaries in Latin America should (1) employ a very large percentage of Latin American labor and attempt to advance native employees to top managerial and technical positions, (2) attempt to develop local sources of supply of manufactured goods not formerly produced in these countries and meet the needs of local communities, (3) offer capital stock to local buyers, and (4) attempt to increase joint ownership or enter into joint enterprises with local businessmen. As a result, the local attitude toward foreign investment will become more favorable and governmental cooperation greater. 7 From the standpoint of many Latin Americans, direct investment by foreigners, especially Americans, is an imperialistic menace. At times, the opposition to foreign capital has been so great that leading politicians, although strongly favoring these investments themselves, have not dared to solicit foreign capital openly. The reasons for opposition are (1) general anti-Yankeeism, (2) belief that foreign companies steal and exploit the resources of the nation, (3) belief that excessive profits are made, and that these profits, which really should belong to domestic citizens, are taken out of the country to enrich foreigners, (4) belief that foreign companies exploit domestic labor and deny natives the really good positions in the companies, and (5) belief that foreign companies exercise sinister influences over the government of the country. 133-134 In our opinion, it is essential to focus attention on general coordinated economic growth rather than on separate problems, largely social in character, such as housing, health, and education. Underdeveloped countries which become too without adequate clothing, food and electric power. Social development requires economic development. If a choice must be made, the latter should be emphasized. 274 Frank, A. (1969) Latin America: Underdevelopment or Revolution--Essays on the Development of Underdevelopment and the Immediate Enemy, New York: Monthly

Review Press.

We cannot hope to formulate adequate development theory and policy for the majority of the world's population who suffer from underdevelopment without first learning how their past economic and social history gave rise to their present underdevelopment. 3 onstrates that contemporary underdevelopment is in large part the historical product of past and continuing economic and other relations between the satellite underdeveloped and the now developed metropolitan countries. 4 and cultural institutions and relations we now observe there are the product of the historical development of the capitalist system no less than are the seemingly more modern or capitalist features of the metropoles of these underdeveloped countries. 5 whole chain of constellations of metropoles and satellites relates all parts of the whole system from its metropolitan center in Europe or the United States to the farthest outpost in the Latin America countryside. 6 opment of the metropolis and the underdevelopment of the satellite. 7 process which also generated economic development: the development of capitalism itself. 9 Though science and truth know no national boundaries, it is probably new generations of scientists from the underdeveloped countries themselves who most need to, and best can, devote the necessary attention to these problems and clarify the process of underdevelopment and development. It is their people who in the 8 last analysis face the task of changing this no longer acceptable process and eliminating this miserable reality. 15 They [people from underdeveloped countries] will not be able to accomplish these goals by importing sterile stereotypes from the metroplis which do not correspond to their satellite economic reality and do not respond to their liberating political needs. 16 Prebisch, R. (1970) Change and Development: Latin America's Great Task, Washington,

DC: The Inter-American Development Bank.

There is a direct link between the increase of marginality and the incapacity of urban activities to absorb the population increment in productive employment. 2 considerable capital formation effort [is] required in order to give the economy the additional dynamism it needs. It is not conceivable - much less desirable - that this should be done mainly with foreign capital. A great internal effort will be an imperative and inescapable necessity. 14 In reality, socialism has been a method of development rather than a method of transforming an advanced economy. 15 Any system which fails to imbue the economy with the required degree of dynamism, and to promote more equitable income distribution, will have irrevocably forfeited the right to survive. 16 Alschuler, Lawrence R. (1978) Predicting Development, Dependency, and Conflict in Latin America: A Social Field Theory, Ottawa, Canada: University of Ottawa Press. Development-underdevelopment and domination-dependency have recently become the two major coordinate axes in the analysis of poverty, conflict, and socio-political change in the third world. Development and underdevelopment have been reinterpreted to describe the unequal consequences for nations within a global capitalist system where the development of some causes the underdevelopment of others. 1 Political violence in underdeveloped countries takes on a new meaning as well. Instead of reflecting a lack of modern institutions for managing political conflict to be remedied once again through the diffusion of modern political culture and structures from the developed to underdeveloped countries, violence is seen as the natural consequence of the increasing economic and social polarization both within Third World countries and between them and the developed countries. As modern capitalist institutions such as multinational corporations, the World Bank, foreign agro-business, restrictive trade practices, and bi-lateral aid programs continue to penetrate the Third World, the population of underdeveloped - respect to political rights and economic well-being. In order to stabilize and perpetuate these inequalities, Third World political regimes rely ever more on instruments of economic and police repression to suppress the legitimate demands of the marginalized masses. 1 Our central proposition is that the more a country is dependent, the more it becomes under-developed. 2 9 ent as a totality that is a structure under transformation, in which it is the dynamic interrelationship among the elements that is of principal importance. Understanding the nature of the whole is subordinate to elucidation of the processes by which the parts become the whole; without continuous transformation structures become static, and the totality of

Interdependent

Development, London: Methuen & Co. 12

dent (as contrasted with independent) development is that growth in the dependent nations occurs as a reflex of the expansion of the dominant nations, and is geared toward the needs of the nheimer,

Paradigm-

Vol. XV (1970), 95-137 (124). 19

Myrdal sees the promotion of international solidarity with a moral basis as a vital issue in the elimination of world poverty (Myrdal, 1970: 298). integration into that system is transmitted and perpetuated domestically, thereby - erkeley Journal of Sociology, Vol. XV (1970), 95-137 (126) 20 Gunar Myrdal mentions a number of such differences between the historical experience of the developed countries and the present conditions of the under- developed countries: 1) Underdeveloped countries are often less well endowed with natural resources than presently developed nations were. 2) Population growth and density are greater now among underdeveloped countries. 3) The trading position of underdeveloped countries is deteriorating in contrast to the fact countries (Myrdal, 1970: Chapter 2). 21 At a minimum in order to speak of an international system of stratification based on the value of development, three conditions must be met: (1) there must be an independent cluster of objective indicators which order nations according to their levels of development, (2) these objective indicators must coincide with subjective criteria used worldwide in ranking nations according to their development, (3) there must be a high level of worldwide agreement in the actual subjective ranking in accordance with the shared criteria. The first condition merely identifies those attributes of attribute space which reflect the development of nations. The second and third conditions establish a consensual evaluative basis for social stratification. 79 metropolis so as to expropriate the economic surplus of the to appropriate it for the capital accumulation of the metropolisinitiating thereby the present underdevelopment of the satellite and the economic development of

Capitalism and

10 Underdevelopment in Latin America: Historical Studies of Chile and Brazil,

London: Penguin Books. 108

This contradictionary metropolitan center-peripheral satellite relationship, like the process of suplus expropriation-appropriation, runs through the entire world capitalist system in a chain-like fashion from its uppermost metropolitan world Andre Gunder (1971: 34) Capitalism and Underdevelopment in Latin America: Historical Studies of Chile and Brazil, London: Penguin Books. 108 As an interaction structure which serves the interests of the center we can expect three conditions to prevail: (1) concentration of trading partners for nations on the periphery since each center country has satellites, (2) concentration of trade commodities for nations on the periphery because centers exploit only the resources of interest to the center, (3) outflow of wealth from the periphery to the center since it could hardly be in the interest of the center for wealth to flow in the other direction. 109 Dos Santos refers to the multinational corporations as the organizational form of dependence. The first, colonial dependence, meant complemented by a colonial monopoly of land, mines, and manpower (serf or form, financial-of the nineteenth century, characterized by the domination of big capital in hegemonic centers, and its expansion abroad through investment in the production of raw the post-war period a new type of dependence has been consolidated, based on multinational corporations which began to invest in industries geared to the American Economic Review, (May, 1970:232), 231-36. 115
metropolis and inhibited lateral communications, preventing the growth of independent decision making and creativity, multinational corporations (backed

Economics and World Order: From

London: Collier-Macmillan. Multinational investments create a need for foreign financing to cover the existing urplus generated domestically American Economic Review, (May, 1970:233), 231-36. 118 Third World countries will tolerate the continuation of massive outflows of private 11 within Third world countries, a class which is dependent on the continued existence of aid and foreign private investment and which therefore becomes an

Aid as Imperialism, London:

Penguin. 118

id is merely a form of subsidy for international companies paid for by the taxpayers of the imperialist countries. An obvious case is aid which is tied to exports from the country providing it, sometimes, as in the U. S. case, specifically to those which are uncompetitive in world markets; goods which are financed by tied aid are usually very much more expensive than those which could be bought elsewhere. Aid also partially finances the profits and interest which are remitted in increasing amounts from th

Aid as Imperialism, London: Penguin. 118

In summary, aid performs four functions for the benefit of multi-national investors in Latin America; aid socializes the indirect operating costs of the multinational corporations (transferring those costs from the corporations to the public sector, i.e., (North) American or Latin American taxpayers); aid creates advantages for American firms over actual or potential local competitors; and aid facilitates long-range planning and minimizes the risks of foreign investments for imperialism: The Roots of Latin American UnderdePolitics and

Society, vol. 1, No. 3 (May), pp. 327-357. 119

Bernstein, H. (ed.) (1978) Underdevelopment and Development: The Third World Today,

New York: Penguin.

"The Crisis of Development Theory and the Problem of Dependence in Latin America,"

T. Dos Santos, pp. 57-80

A change from development towards the 'outside' to development towards the 'interior' would relieve underdeveloped countries of their dependence of foreign trade and give to a locally controlled economy. These changes were described as a 'transfer of centers of decision-making towards the interior' of underdeveloped economies, and as replacing a development 'induced' by uncontrollable foreign trade situations by national development as conceived by those in power within the country. 64 D.S. Dependence is not the 'external factor' which it is often believed to be. "The international situation in which this movement occurs is taken as a general condition but not as a demiurge of the national process because it is the elements within a nation which determine the effect of international situations upon the national reality." 72 countries are conditioned by the development and expansion of others. A relationship of interdependence between two or more economies or between such economies and the world trading system becomes a dependent relationship when some countries can expand through self-impulsion while others, being in a dependent position, can only expand as a reflection of the expansion of the 12 dominant countries, which may have positive or negative effects on their immediate development. 76 The concept of dependence itself cannot be understood without reference to the articulation of dominant interests in the hegemonic centers and in the dependent societies. 78 For if dependence defines the internal situation and is structurally linked to it, a country cannot break out of it simply by isolating herself from external influences; such action would simply provoke chaos in a society which is of itself dependent. The only solution therefore would be to change its internal structure - a course which necessarily leads to confrontation with the existing international structure. 79 "Planning Economic Development," O. Lange, pp. 207-215 The strategic factor is investment, or more precisely productive investment. Consequently the problem of development planing is one of assuring that there be sufficient productive investment, and then of directing that productive investment into such channels as will provide for the most rapid growth of the productive power of national economy. Wallerstein, I. (1979) The Capitalist World Economy, New York: Cambridge University

Press.

f what we are seeking are the actual causes, sources, and conditions of overt changes of patterns and structures in society. Conventional wisdom to the contrary in modern social theory, we shall not find the explanation of change in those studies which are abstracted from history: whether these be studies of small groups in the social laboratory, group dynamics generally, staged experiments in social interaction, or mathematical analyses of so-called social systems. Nor will we find the sources of change in contemporary revivals of the comparative method with its ascending staircase of (1969) Social Change and History, NY: Oxford University Press, pp. 302-3.) 2 against the model, but rather against the use to which people have thought themselves entitled to put it. The genius of Marx, the secret of his enduring power, lies in his having been the first to construct true social models, starting out from the long term (la longue duree). These models have been fixed permanently in their simplicity; they have been given the force of law and they have been treated as read-made, automatic explanations, applicable to

In this way has the creative power of the most

powerful social analysis of last century been shackled. It will be able to regain its e

Economy and ? in Early Modern Europe,

London: Routledge and Paul Kagan, pp. 38-9.) 3

Revolution is not an event but a process. 12 13 th century, became a world economic system only in the 19th century. It took the bourgeois revolutions 300 years to put an end to the power of the feudal elite. It took socialism 30 or 40 years to generate the Score and Prospects (Moscow: Progress Publications, p. 20). 13 The meaning of ethnic consciousness in a core area is considerably different from that of ethnic consciousness in a peripheral area precisely because of the different class position such ethnic groups have in the world economy. 25 quantity such that the needs could not be supplied within the former boundaries. At first, however, the search for new markets was not a primary consideration in the geographic expansion since the new markets were more readily available Russia entered in semi-peripheral status, the consequence of the strength of its state machinery (including army) and the degree of industrialization already achieved in the eighteenth century. The independences in the Latin American countries did nothing to change their peripheral status. 27 Asia and Africa were absorbed into the periphery in the nineteenth century, although Japan, because of the combination of the strength of its state machinery, the poverty of its resource base (which led to a certain disinterest on the part of the world capitalist forces), and it geographic remoteness from the core areas, was able to quickly graduate to semi-peripheral status. 27-8 The absorption of Africa as part of the periphery meant the end of slavery world- wide for two reasons: First of all, the manpower that was used as slaves was now needed for cash-crop production in Africa itself, whereas in the eighteenth century Europeans has sought to discourage just such cash-crop production. In the second place, once Africa was part of the periphery, and not the external arena, slavery was no longer economic. 28 Slaves receiving the lowest conceivable reward for their labor are the least productive form of labor and have the shortest life span, both because of undernourishment and maltreatment and because of lowered psychic resistance to death. Furthermore, if recruitment from areas surrounding their workplace the escape rate is too high. Hence, there must be a high transport cost for a product of low productivity. 28 Once...Africa was part of the periphery, then the real cost of a slave in terms of a production of surplus in the world-economy went up to such a point that it became far more economical to use wage labor, even on sugar or cotton plantations, which is precisely what transpired in the nineteenth-century

Caribbean and other slave labor regions. 29

The Russian Revolution was essentially that of a semiperipheral country whose internal balance of forces had been such that as of the late nineteenth century it began on a decline towards a peripheral status. This was the result of the marked penetration of foreign capital into the industrial sector which was on its way to eliminating all indigenous capitalist forces, the resistance to the mechanization of the agricultural sector, the decline of relative military power (as evidenced by the defeat by the Japanese in 1905). 30-1 14 f Britain which dates from 1873 was confirmed and its hegemonic role was assumed by the United States. 31 Chinese Revolution meant that this region, which had been destined for much exploitative activity, was also cut off. Three alternative areas were available and each was pursued with assiduity. First, western Europe had to be rapidly a primary role in the expansion of world productivity. Secondly, Latin America became the reserve of US investment from which now Britain and Germany were completely cut off. Thirdly, southern Asia, the Middle East and Africa had to be decolonized. 32 one occasioned by the strenuous late-nineteenth century conflict among industrial states but one no longer desirable from the point of view of the new hegemonic power. 32 including them in a minor share of the privilege, they may no doubt eliminate opponents in the short run; but they also up the ante for the next oppositional movement created in the next crisis of the world-economy. Thus the cost of he advantages of cooption seem ever less worthwhile. There are today no socialist systems in the world-economy and more than there are feudal systems because there is only one-world-system. It is a world-economy and it is by definition capitalist in form. Socialism involves the creation of a new kind of world-system, neither a redistributive world empire nor a capitalist world- ion is imminent. It will be the outcome of a world struggle in forms that may be familiar and perhaps in very few forms, that will take place in all the areas of the world To be very concrete, it is not pos basic mechanism of the operation of the world economy. 73 There is an alternative system that can be constructed, that of a socialist world government in which the principles governing the economy would not be the market but rather the optimum utilization and distribution of resources in the light of a collectively arrived at notion of substantive rationality. 73 Even if every nation in the world were to permit only state ownership of the means of production, the world system would still be a capitalist system. 74 I am not suggesting that it does not matter if a country adopts collective ownership as a political requirement of production. The moves in this direction are the result of a series of progressive historical developments of the capitalist world-economy and represent themselves a major motive force for further change. Nor am I in any way suggesting the immutability of the capitalist system. I am merely suggesting that ideological intent is not synonymous with structural change, that the only system in the modern world that can be said to have a mode of production is the world-system, and that this system currently (not eternally) is capitalist in mode. 74 15 monopolistic structure because the scales of output that must be adopted to introduce modern methods are large relative to the extent of the initial market; and on the other hand, these markets will be only practically expanded through some income generated by investment, since a large portion of capital goods must be imported. In addition, the monopolistic structure itself will restrict the volume Technological Dependence, Monopoly and Growth, Oxford: Pergamon Press. pp.

59-60.) 77-8

State ownership is not socialism. Self-reliance is not socialism. Those policies may represent intelligent political decisions for governments to take. They may be decisions that socialist movements should endorse. But a socialist government when it comes will not look anything like the USSR, or China, or Chile, or Tanzania of today. Production for use and not for profit, and rational decision on the cost benefits (in the widest sense of the term) of alternative uses is a different mode of production, one that can only be established within the single division of labor that is the world-economy and one that will require a single government. 91 Chilcote, Ronald H. (ed.) (1982) Dependency and Marxism: Toward a Resolution of the

Debate, Boulder, Colorado: Westview Press, Inc.

onald H. Chilcote, pp. 3-16 Students of dependency have struggled over the past decade to integrate their ideas with a theory of Marxism. Their work has opened up new questions and areas of investigation and stimulated interest in many issues that run through the thought of Marx, Engels, Lenin, and Trotsky. Criticism has evolved in the contemporary study of dependency with the acknowledgement of theoretical weaknesses: confusion over terminology, under emphasis on market in the domestic and international economy, and so on. 3

Henfrey, pp. 17-54

For a quarter of a century Latin America has been the fulcrum of development theories. From the Economic Commission on Latin Ameri structuralism to the dependency perspective and analyses of modes of production, each radical reformulation of the Latin American dilemma has ushered in a new approach to underdevelopment in general. The reason for this is clearly contextual. By the mid-twentieth century the region effectively represented the political and social. This made it a natural source for theories based on an originally innovating but now generally accepted premise: underdevelopment is not a traditional state, nor a stage in a standard development process, but a distinct historical condition for which neither bourgeois nor Marxist theories of unilinear evolution afford explanations or solutions (Frank, 1971: 27-30). 17 16 The experience of the structuralist reforms of the 1950s and 1960s was the catalyst of this new thinking. Their contradictions were a mirror of the Latin American situation. On the one hand, they embodied a notion that Latin American history was shaped by the international division of labor and unfavorable terms of trade (Furtado, 1970). On the other hand they were a last attempt to realign this history with a standard model of capitalist development through Keynesian forms of intervention: state planning, import substitution industrialization and agrarian reform. The radical inference of their failures, in Brazil and Chile particularly, was that history could not just be rerouted through the existing state apparatus. If significant change were to be achieved, this history had to be broken out of by revolutionary means and in the revolutionary direction which Cuba was already pioneering. 17 lass struggle . . . (leading) . . . to the restructuring of societies, a restructuring which limits capitalism and promotes socialism in the seeking of a new and better the Proble Underdevelopment and Development: the Third World Today (originally published in 1969 in Spanish as La crisis de al teoria del desarrollo y las relaciones de dependencia en América Latina, Santiago: Siglo XXI, p. 76). 18 From criticizing dependency writers for their insufficiently Marxist analysis of modes of production, without the theoretical knowledge of which the very class structure becomes Two-Thirds, I (First Quarter), 13-19 (also published in 1976 in Spanish, pp. 20-36 in Cartra et al., Modos de producción en América Latina,

Lima: Devla Editores) p. 19). 18

pp. 55-81 In spite of the relationship of dependency theory to capitalism and imperialism and its theoretical irrelevance to socialist development, dependency theory is presented by many contemporary authors as a body of socialist revolutionary thought and, specifically, as a Marxist-Leninist critique of imperialism. 55 -satellite of capitalism runs throughout the entire world capitalist system, from its macro-metropolitan centre to its most micro-Capitalism and Underdevelopment in Latin America, London: Penguin, p. 97). 58 colonial period, to a dependent capitalism based on the export sector. The tracks left by an exporting colonial regime establishe Latin America. Not only because a large share of our surplus was being taken away from us, but fundamentally because our socioeconomic structures were dependent and the liberating revolutions did not engender change at the 17 foundations of these structures, dominated as they were by the criollo (Dos Santos, Theotônio (1970b) Dependencia y cambio social, Santiago: Centro de Estudios Socio-Económicos, p. 97, translation and emphasis mine). 58 ominant model of development in the social sciences of our times (and of the development project implicit in it) caused a crisis for that same science. It created a crisis for the very notion of development and underdevelopment and the explanatory role of said concepts. From that crisis is born the concept of dependency as a possible explanatory factor of this deldesarrollo y las relaciones de dependencia en América Latina pp. 147-187 in Helio Jaguaribe et al. (eds.), La dependencia politico-económica de América

Latina, Mexico City: Siglo XXI, p. 37). 59

Dependency is a situation in which the economy of a certain group of countries is conditioned by the development and expansion of another economy to which the former is submitted. The relation of interdependency between two or more economies, and between these and world commerce, assumes the form of dependency when some countries (the dominant ones) can only do so as a result of that expansion, which can act positively or negatively on its immediate development. Either way, the basic question of dependency leads to a global situation in the dependent countries whereby they are placed in a backward position in relation to, and und Santos, Theotônio (1970b) Dependencia y cambio social, Santiago: Centro de Estudios Socio-Económicos, p. 45, emphasis mine). 60 t from scratch in a new world but have to change and grow and develop within a context unfavorable to them, because in the past their position has been so largely determined by the interests of other nations. If we forget this historical context, we will not understand the problems that now exist; nor will development The Crisis of Development, New York: Praeger, p. 17). 60 It is quite interesting to observe the similarity of the explanations offered by a Marxist-Lennist social scientist and a former Prime Minister of an industrialized, Western capitalist country. Such similarity is itself a reflection of the direct ideological link of dependency theses to the needs of competitive capital in the face of imperialism. This occurs because dependency theorists focus on the changes in magnitude of the production of surplus value and its subsequent exchange and accumulation. Notice, for example, the importance accorded this level of analysis by Ruy increase the mass of value produced, the capitalist should necessarily rely upon a greater exploitation of labor, either through increasing its intensity, or through Marini, Ruy Mauro (1973) Dialéctia de la dependencia, Mexico City: Siglor XXI, p. 36). Although in another part of his work Marini alleges that this characteristic the fact remains that these different procedures of labor exploitation are proper to 18 sui generis capita of the part of Marini exemplifies the main error committed by dependentistas; i.e., they consider features characteristic of all capital/labor relations as unique to socioeconomic formations dominated by imperialism. (Marini, Ruy Mauro (1973) Dialéctica de la dependencia, Mexico City: Serie Popular ERA; (1978)

Revista

Latinamericana de Sociología (2), 174-236)

Within socioeconomic formations in which socialist relations exist and within the international socialist system, all specific forms of private class appropriation are not immediately eliminated at the political inception of socialism with the stroke of the constitutional pen. Moreover, new forms of private class appropriation arise that were not present under capital/labor relations. Such forms would refer to bureaucratic corruption, for example, within a socialist society. Although no longer based on appropriation of surplus products and the accumulation of surplus values resulting from the private ownership of the means of production, such forms would lead to cases of private accumulation by individuals due to their relationship to the socialized means of appropriation. The concept of dependency can in no way explain such events because of the superficial level at which dependency theorists work. In order to achieve the elimination of private class appropriation and the establishment of socialized appropriation, socialist societies first pass through specific modes of production and appropriation and accumulation organized by the state. It is in this sense that socialism represents a transitional stage to a communist, classless organization of society. However, many critical idealists, impatient with current forms of example, as essentially the same as those of any capitalist or imperialist nation. Such ideological theses, once again, are based on a lack of historical perspective regarding the level of production and appropriation and on a misplaced concern for exchange relations of commodities (circulation, distribution, and consumption of commodities). A classless society can be established only after social production has been developed in relation to the material needs of the existing social forces. 75 Classless societies (for which there exists no name, as such, other than communism) are then a historical possibility only when the contradiction of social production and private appropriation is eliminated on a world scale. For only then will it become materially feasible to eliminate the specific forms of class accumulation (military armies, for example) and the division of labor, in order to establish a correspondence between manual and mental labor in relation to the process of socialized production and appropriation itself. A dialectical-historical- materialist analysis of class and classless relations in society must deal then with the level of social production and private appropriation first, that is, the social modes of production, labor forces and the manner in which the social product of these relations is appropriated by the producers along with the subsequent forms of accumulation. In constructing a theoretical explanation of class history and the scientific basis for classless relations, Marx restricted his analysis to this relational 19 level. And, it is this same relational level that allows us to understand class ideologies such as dependency theory. 76 Socialism on the other hand, represents a specific stage in the historical process of social modes of production and forms of appropriation which denotes a totally different historical period from that of capital/labor relations. However, one cannot expect critical-idealists armed with ideological concepts of time processes and material relations to recognize such differences immediately. The theorists of dependency who consciously propose to substantiate apologies of capitalism and imperialism are of little concern to us. The work of those Marxists who claim substantiate bourgeois ideology by attempting abstractly to construct dependency theory at the level of exchange relations alone will continue to be questioned as long as such analysts avoid the basic class contradiction in capitalist history. 77 Socialism requires an explanation of the historical task involving the elimination of capitalist forms of production and appropriation and the resolution of the contradiction of social production and private appropriation. This will explain many of the aspects of ideological interpretation encouraged by bourgeois thought and, specifically, by dependency theorists. In order to discuss socialism, a certain amount of order must be introduced among the ideological debates now prevalent in sociological and economic theory in capitalist countries. The dependency theses represent only one particular form of bourgeois ideology as interpreted by some well-meaning (and some not so well-meaning) social scientists under capitalism. 78 , pp. 82-102 the international system of capital did not address systematically the mechanics of international exploitation nor did he suggest that the development of such a system would of necessity involve consequences detrimental to the periphery in the long term. 85-86 -107 A dependency theory which purports to explain underdevelopment in Latin America exclusively as a consequence of the transfer of surplus from backward comprehend the central role of the labor process in the formation of classes as well as class struggle as the motor of history. Divorced from the material reality of the working classes, it ignores the role of the masses in making history. It is static. Despite occasional calls for socialist revolution, it is based in idealism and is therefore incapable of guiding revolutionary action. Moreover, such a dependency theory present the poverty, hunger, and oppression of peasants and capital. It imagines that an anti-imperialist coalition led by local capital could 20 defends the interest of local capital against Marxism-Leninism and against the struggle of the working classes for socialist revolution. 103 The labor theory of value is central in the Marxist understanding of history. The process by which surplus value is appropriated by the owning classes is critical in determining the objective antagonistic interests of the owning and the producing classes. The nature and the rate of exploitation imbedded in the labor process shape consciousness and, ultimately, the forms and level of class struggle. In the dialectical transition from feudalism to capitalism, a manufacturing bourgeoisie becomes ascendant through its efforts to increase the rate of surplus value which goes beyond lengthening the workday and intensifying the labor process. In their competitive struggle for survival and a higher rate of surplus, the capitalists transform the labor process. The triumph of the bourgeoisie is a new mode of production in which feudal classes have been reduced to the status of remnants; servile labor has been replaced by wage labor, a new concept of poverty and a new legal structure have been implanted which provide for investment mechanisms required by industrial capitalism; and the nature of the labor process has been changed and with it the creation of new classes, class interests, and class consciousness. Though the change is dialectical and remnants of the past remain, nonetheless there is a consistency within the new mode of production. With the new labor process of capitalist production, the producing classes are formed by a social existence which shapes a proletarian consciousness as well as proletarian class interest and proletarian forms of class struggle. The competition among capitalists forces investment, which creates a higher organic composition of capital with its tendency toward a falling rate of profit. As Marx analyzed the tendencies of capitalism, this mode of production with is unplanned anarchy of production and its fundamental contradiction between the social nature of production and the private nature of appropriation generates crises. Capitalism also creates class forces which are shaped and mobilized by its increasing crises. In it development it creates not only the agents of its own destruction but the productive forces upon which a transition to socialism can go forward. 105-106 on, pp.108-117 The wide acceptance of dependency theory throughout the Third World constitutes a conceptual revolution in a scientific understanding of large-scale questions of capitalist development. The perspective has succeeded in discrediting the system, legitimating tenets of modernization theory, and in Dependency theory is particularly attacked for being excessively based on analyses of exchange and special relations rather than production relations; it is criticized as not having an adequate approach to stages of development of the mode of production, as economistic, and as lacking in class analysis. Each of these criticism has some merit. Yet, in my view, the problem with almost all of the critiques is that, while they specify the problems with dependency theory, they do not offer any serious theoretical development beyond it, much less an alternative to it. I do not think this is at all accidental. The critics have been unable to develop an alternative because neither the classical theory of 21
imperialism nor contemporary strains of orthodox Marxism provide ready answers to the problems of underdevelopment that dependency theory has addressed. Dependency theory developed not just in reaction to conventional modernization theory and the 1950s nationalist and reformist formulations of the Economic Commission for Latin America (ECLA) and of the ideologies of --nal Marxism was inadequate to the task, in both its theoretical manifestations and its development; the reformist line of the communist parties of the region; the inability of the left generally to develop a coherent alternative to developmentalist reformism). 108 Within the dependency perspective the most serious deficiency, it seems to me, has not been given serious or systematic attention. It has been its rather heavy concentration on economics and lack of emphasis on sociology. It has tended to exaggerate the determining impact of international political economy and to down play the importance, complexity, and international impact of local struggles. The main thrust is too often a nondialectical theory of the mechanisms of imperialist sometimes tends toward just another version of the political economy of imperialism. 112 -137 The Main Propositions of Dependency Theory Dependency theory is actually a very broad, eclectic school of thought whose only common ground is the assumption that underdevelopment has causes external to the underdeveloped nations. The fact that dependency theorists span the entire range form the right to far left in the political spectrum helps explain their reluctance to Nevertheless, there are perhaps four main theoretical perspectives shared to some extent by most dependentistas: (1) the critique of dualism, (2) the core/periphery theory, (3) unequal exchange, and (4) the dependent bourgeoisie. The critique of dualism. The entire thrust of the dependency school is to refute the idea propounded by bourgeois social science that the main obstacle to development is to be found in the inherent sociocultural qualities of the history is therefore explained as a gradual transition from one ideal type (the traditional underdeveloped society) to another (the modern developed society). This critique is the most progressive feature of dependency theory; it has helped underdevelopment. 126 . . . the terms of trade and wages need to be revised so that labor (and capital) in the periphery are compensated in accordance with the value produced. 127 22
with its own bourgeoisie ra not part of the anti-imperialist front. 127 Without competition between capitalists and commodity exchange, there could be no reproduction of capital; capitalism is the production of commodities specifically for exchange. -value is the absolute law of this mode of production. Labour-power is only saleable so far as it preserves the means of production in their capacity of capital, reproduces its own value as capital, and yields in unpaid labor a source of additional capital. The conditions of its sale, whether more or less favourable to the labourer, include therefore the necessity of its constant re- selling, and the constantly extended reproduction of all wealth in the shape of cCapital, 3 Vols., New York: International Publishers, pp. I: 618-619).

Chinchilla and James Lowell Dietz, pp. 138-147

. . . most of these critiques suffer from the same weakness as dependency theory itself the lack of an alternative theory. In fact, the failure of most critiques to outline an alternative has reinforced the view that the differences in the debate are insignificant semantic differences and that dependency critiques are dogmatic or ill-founded. The greatest weakness of most critiques of dependency theory has been this failure to go beyond mere criticism to an alternative theoretical perspective with demonstrated theoretical, empirical (i.e., historical), and political differences of consequence. 139 pp. 148-155 World system theory (so designated by one of its major practitioners, Immanuel Wallerstein, 1975) is derived from the intellectual heritage found in the critique of the developmentalist perspective of liberal political economy. 148 The real innovation of the world systems approach lies in the choice of the primary unit of analysis the capitalist world economy. All phenomena are to be explained in terms of their consequence for both the whole of the system and its parts. It is asserted that the internal class contradictions and political struggles of a particular state, like Rhodesia for example or preserve a position within the world economy which is to the advantage or World Inequality: Origins and Perspectives on the World System, Montreal:

Black Rose Books, p. 16). 148

Cross-American Sociological Review, Vol. 48, pp. 468-479. 23
The greater the political inequality, the lower is the political democracy of a nation. 468 Increases in education lead to greater participation in the mass media. Widespread access to newspapers, magazines and radios heightens awareness of national political processes. This increased awareness may then lead to greater demands for political power by groups formerly outside the central power circles. 469
[Chirot, D. (1977) Social Change in the Twentieth Century, New York: Harcourt, powerful societies that are relatively independent of outside controls. Peripheral societies: economically overspecialized, relatively poor and weak societies that are subject to manipulation or direct control by the core powers. Semi-peripheral societies: societies midway between the core and periphery that are trying to industrialize and diversify their economies." 249 Generally, economic dependency is greatest in the periphery and semiperiphery and least in the core. Of course in certain sectors where non-core societies have organized the export of primary goods (e.g., OPEC) the core may be very dependent. 470 The world capitalist system, driven by the core, expands to the semiperipheral and peripheral countries in search of cheaper raw materials, cheaper labor, and less regulated investment environment. The penetration of the core into the noncore countries cannot be accomplished without the cooperation of at least some segments of the noncore. A common interest emerges between landowners, merchants, and other traditional elites and the core elites. 470 The present analysis reveals that both peripheral and semiperipheral countries are less democratic than core nations. 477 Another significant finding is the persistence of the positive relationship between economic development and political democracy. 477 Wallerstein, I. (1983) Historical Capitalism and Capitalist Civilization, London: Verso, pp. 13-137. -bounded integrated locus of productive activities within which the endless accumulation of capital has been the economic obj fundamental economic activity. It is that social system in which those who have operated by such rules have had such great impact on the whole as to create conditions wherin the others have been forced to conform to the patterns or to suffer the consequences. It is that social system in which the scope of these rules (the rule of value) has grown ever wider, the enforcers of these rules ever more intransigent, the penetration of these rules into the social fabric ever greater, even while social opposition to these rules has grown ever louder and more organized.

18-9

system, all breadwinners were considered members of the economically active 24
labor-force, but no housewives were. Thus was sexism institutionalized. The legal and paralegal apparatus of gender distinction and discrimination followed quite logically in the wake of this differential valuation of labor. 25 tion to fostering the gender/age division of labor, they [employers of wage labor] they also encouraged, in their employment patterns and through their influence in the political arenas, recognition of defined ethnic groups, seeking to link them to specific allocated roles in the labor-force, with different levels of real remuneration for their work. Ethnicity created a cultural crust which consolidated the patterns of semi-proletarian household structures. That the emergence of such ethnicity also played a politically divisive role for the working classes has been a political bonus for the employers but not, I think, the prime mover in this process. 28
under what terms, was to change the actual frontiersthrough total incorporation by one state of another (unification, Anschluss, colonization) through seizure of some territory, through secession or colonization. 50-1 The states controlled the relations of production. They first legalized, later outlawed, the particular forms of coerced labor (slavery, public labor obligations, indentures, etc.). They created rules governing wage-labor contracts, including guarantees of the contract, and minimum and maximum reciprocal obligations. They decreed the limits of the geographical mobility of the labor force, not only across their frontiers but within them. All these state decisions were taken with direct reference to the economic implications for the accumulation of capital. 52 Taxation was by no means an invention of historical capitalism; previous political structures also used taxation as a source of revenue for the state-machineries. But historical capitalism transformed taxation in two ways. Taxation became the main (indeed overwhelming) regular source of state revenue, as opposed to state revenue deriving from irregular requisition by force from persons inside or outside the formal jurisdiction of the state (including requisition from other states). Secondly, taxation has been a steadily expanding phenomenon over the historical development of the capitalist world-economy as a percentage of total value created or accumulated. This has meant that the states have been important in terms of the resources they controlled, because the resources not only permitted them to further the accumulation of capital but were also themselves distributed and thereby entered directly into the further accumulation of capital. 53 state directly assisted the process of the accumulation of capital in favor of some groups rather than others. 53 distribution than to make real incomes converge. 54 y [official subsidies] have also taken the less direct form of the state bearing the costs of product development which could presumably be amortized by later profitable