Dependency and Imperialism -- The Roots of Latin American Underdevelopment
Bodenheimer, Susanne
Nine years ago any critic of the Alliance for Progress was dismissed as a cynic, a malicious trouble- maker, or worse, a Communist. Today such criticism has become so respectable that disillusioned...
...Sergio Bagu, "La Economia de la Sociedad Colonia, Pensamiento Critico, Apr...
...it., p. 197 76 uan Cameron, "Threatening Weather in South America," Fortune Oct...
...The CEPAL strategy is the expression of a Latin bourgeoisie trying to be national, but confined by the contradictions of the national capitalist solution" to dependency, and forced, in the end, to call for additional foreign capital as a requisite for development...
...This concern, often expressed by American business, is illustrated in a recent article in Fortune on the investment climate in Latin America: "(U.S...
...In short, the CEPAL model provides at best a partial explanation of Latin American underdevelopment...
...monopolistic concentration of capital...
...nal corporation has an increasing stake in consolidlating its.influence over "public" of (U.S...
...Albert Hirschman, "The Political Economy of Import-Substituting Industrialization in Latin America," uarterly Journal of Economics, Feb., 1968, p. 4 A. Kafka "The Theoretical Interpretation of Latin American Economic Development," in H.S...
...In this sense American imperialism is not "irrational" or "accidental," but rather * It is a Marxist theory in the sense of remaining within the Marxist tradition--even though Marx himself left little in the way of an explicit theory of imperialism...
...The serious agrarian and tax reforms envisioned in 1961 have not been made: in no country other than Venezuela and Paraguay was more than 101 of the rural population resettled through agrarian reform...
...the late 19th and early 20th centuries).24 is a necessary extension of capitalism...
...policies...
...142-3...
...To take only a few examples of the ways in which state agencies perform important services to U.S...
...By conceptualizing imperialism too narrowly in trts of the actions of the state, or implicitly distinguishing a prior the interests of the state ("national security") from those of the dominant socio-economic classes, these theories do not consider that imperialism may be systemically related to capitalism...
...5 7 Some of the theorists included here as non-Marxist theorists of imperialism do not actually use the term "imperialism" to describe their concern (e.g., Bosch's "pentagonism" ), preserving the term "imperialism" in its Marxist meaning...
...Given the great diversity of non-Marxist theories of imperialism, these remarks must be limited to those tendencies which have direct bearing on Latin American dependency.^ First, there is a tendency to associate imperialism with expansionism (territorial expansion or protracted political domination) and/or the military aggression and ntervention generally accompanying such expansion...
...c) as a supplier of certain manufactured commodities...
...Although the particular function of Latin America in the international system has varied, the development of that region has been shaped since the Spanish conquest by a general structural characteristic of capitalist expansion: its unevenness...
...4 6 Although the CEPAL thesis (which has been grossly oversimplified here) was fruitful when first put forth, in that it linked Latin American underdevelopment to the international economic system, it is limited in several respects...
...Thus, as experience has demonstrated, the various efforts to build "bourgeois nationalist" or "national capitalist" or, more recently, "state capitalist" solutions must fail in the end because the social classes on whom such solutions are based (the boureoisie) are themselves limited by their role in the international system...
...relations with Latin America as one aspect of American capitalism...
...And, as has been widely recognized, the periods of relative growth and development in Latin America (such as industrialization in the 1930's) have occurred during the phases of relative contraction in the world market, for example, during periods of international war or depression, when the region's ties to that market and to the dominant nations have been weakest...
...z (Since 1957, for example, the growth rate of per capita income in Latin America has been less than 1.5% a year, as contrqSted with nearly 2.5t in the U.S...
...Grace Co...
...In the case of U.S...
...Particularly with the expanded role of the state in the national economy, the state bureaucracy (including the military in many countries) has been viewed by some as the key to national autonomy...
...For example the United States has authorized well over the $1 billion per year pledged in 1961...
...46-9...
...Instead of enlarging the consumer base within each country by improving the economic status of the majority of the population, it is possible to combine middle and upper class consumer bases of several nations (as is currently happening in Central America...
...Contemporary Theory in International Relations (Englewood Cliffs, N.J...
...In attempting to fill the gap left by the dependency model, we may choose from among several alternative theories which purport to explain American relations with atin America...
...exports through such mechanisms as "tied aid").* This analysis is not to iply that the state never acts independently of, or even in direct opposition to, private corporate interests in particular situations...
...And to some extent this may have been a motivation for the Alliance...
...While providing the basis for an analysis of the impact of capitalist expansion and the functioning of the international system in latin America, by itself it says little about the reasons for the expansion of capitalism or the roots of the international system in the dominant nations (for our purposes, the U.S...
...To be sure, American strategies and policies toward Latin America do change...
...62 Strachey, op...
...Indeed there have been notable instances...
...diagnosis took insufficient account of the built-in limitations of the importsubstitution solution, rising from Latin \erica's historical dependency...
...Press, 962, pp...
...The first is a "closed-system" analysis, which ignores the basic condition of Latin American society: its integration into an international environment in which the developed nations prevail...
...Department of Commerce figures, the outflow from Latin America was $7.5 billion greater than inflow from 1950 to 1965...
...The stated goal was to promote development through reform...
...The typical economic unit, in other words, has the attributes which were once thought to be possessed only by monopolies:b o The outstanding features of these economic units are, briefly: 1) Increasing concentration of capital and resources under the control of fewer units, through the traditional forms: horizontal integration (increasing concentration of control over the production of a commodity or class of commodities), and vertical integration (increasing concentration f control over all phases of the production process, from the supply of raw materials to the marketing and distribution of the commodity o consumers...
...Furthermore it does not make explicit the relation between the state and private capital in the American political economy.* Private capital remains the driving force in the international system...
...Foreign ownership and control of industry have increased, thus contradicting the expectation that decision-making would be transferred to Latin America...
...FOr our purposes the adoption of a Marxist framework implies an integral relation between the actions of the U.S...
...Mikesell (ed...
...The following account of generally shared interests of the multinational corporations should not be taken to imply the absence of conflicting interests between individual corporations (or even within one conglomerate...
...Thus the multiiati...
...Frank Church and corporate hard-liners such as Nelson Rockefeller openly acknowledge the bank- ruptcy of the Alliance policy...
...and summary of report, New York Times, April 20, 1969...
...Department of Economic and Social Affairs, Foreign Capital in Latin America (N.Y.: U.N., 1955), p. 15...
...This is especially the case vis-a-vis Latin America...
...6 6 To accept a theory of economic imperialism as a general hypothesis does not imply the necessary reduction of every specific political or military action by the state to pure economic motives...
...has avoided a thorough reappraisal of its analysis by discovering yet another panacea: regional economic integration...
...Second, because it is a dependent bourgeolie-one which is closely allied, yet a junior partner in What alliance, with foreign capital,--the once-national industrial bourgeoisie loses whatever potential it had for mobilizing a nationalist united front within Latin America...
...Thus they may resort to ideological-political-military explanations (such as the obsessive anti-Communism of American leaders, the doctrine of the "American responsibility" held by the "national security bureaucracy," independent of economic interests, the needs of the defense establishment,6 1 and so on...
...Clientele classes are those which have a vested interest in and"profit from the structure of" the international system...
...9 In both cases the fundamental problem of Latin underdevelopment is obscured...
...Also, to the extent that they have any factual basis, these "reasons" do not really explain anything...
...The incountry U.S...
...Richard Barnet, Intervention and Revolution (N.Y.: World Publishing, 168) 60 Barnet, op...
...The concrete limits within which a particular country has developed in a particular historical period have changed, according to two basic sets of variables: l)the specific characteristics of the international system and 2)the specific functions of the Latin American country within the system...
...the theory offers an account of American relations with Latin America, thus converging with the dependency model...
...The U.S...
...was the second largest producer of sugar in Peru...
...Third, and perhaps most important, the CEPAL analysis has been partially invalidated by facts: specifically, the increasing dependence upon the international system of those countries (for example, Chile, Argentina, Brazil) which have been import-substituting for ore than 30 years and the stagnation plaguing those nations in recent years, which is a symptom of the exhaustion of import-substitution possibilitiesTo mention only three examples: sincq...
...analysis and strategy comes from the very thorough annual and periodic studies made by CEPAL itself...
...4 In short, the (:EPAI...
...Maurice Halperin, "Growth and Crisis in the Latin American Economy," in Petras and Zeitlin (eds...
...Third, corporate capitalists acquire an interest in a limited measure of "development" in Latin America...
...inefficient use has been made of aid resources...
...Quite aside from their evaluations, there is far more eloquent testimony to the failure of the Alliance to achieve its stated objective of peaceful social and economic revolution in Latin America: -- Annual average growth rates during the 1960's were lower than those of the previous decade, and fell far short of the target (2.5t per capita) established in 196111 -- Social problems such as urban poverty, unemploy- ment, and inequality of income distribution have been aggravated rather than resolved: Thus, while average per capita income is $410, the lower half of the pop- ulation receives an average of Sl10, and the top 5% of the population receives 2600...
...cit., pp...
...Import-substitution was expected to lessen dependence on foreign trade, transfer the "centers of decision-making" to Latin America, and expand production for the internal market...
...John Strachey, The End of Empire, (N.Y.: Praeger, 1964), pp...
...see also J. Behrman, "Foreign sso-ciates and their Financing" in Raymond Mikesell (ed...
...1 0 In a number of Latin American countries and for the region as a whole, the input from foreign private investment has been far exceeded by the outflow of profit remittances abroad.11 (According to U.S...
...but the possibility must at least be consi-ered that these changes represent variations of a less flexible underlying relationship between the U.S...
...cit., pp...
...12-13...
...selections-b Frederic Bonham and others in Gerald Meier (ed...
...Beyond the very general notion of imperialism as exploitative, however, Marxist theories differ sharply from most non-Marxist theories in analyzing the nature and causes of imperialism...
...Between 1950 and 1968 Latin America's share of world trade shrank from 11% to S.1%)13 Foreign aid has become continually more "tied to conditions imposed by creditor nations to meet their own balance of payments difficulties or to accommodate private business interests...
...These aspects pf Latin American society become part of the infrastructure of dependency when they function or occur in a manner that responds to the interests or needs of the dominant powers in the international system, rather than to national interests or needs...
...investors--and in extreme cases of non-cooperation by Latin American governments, they have played decisive roles in overthrowing those governments...
...I and asm...
...It becomes part of the infrastructure of dependency when the industrial structure is integrated into and complementary to the needs of foreign economies...
...8 0 This implies not only a strong influence over government foreign policies but also "the active participation of the state in international economic relationships" which serve their interests...
...This analysis is appropriate to a specific feature of contemporary U.S...
...Some reform would be desirablebut only insofar as it was perceived as a necessary precondition for stability in Latin America and for preservation of the international capitalist system in the Western Hemisphere...
...cit...
...The degree of foreign control in the principal economic sectors...
...and increasing international integration of capital...
...or 2) arguing (or assuming) that the contact between Latin America and the advanced industrial nations has been such as to stimulate development in Latin America...
...The international division of labor has persisted...
...in return they enjoy a priviliged and increasingly dominant and hegemonic position within their own societies, based largely on economic, political, or military support from abroad...
...12 This drain through foreign investment is aggravated by the clear deterioration of the terms of trade for the Latin American nations and of their position in world trade...
...This sketch is based on a particular Marxist model which takes monopoly capital as the defining feature of the American political economy today:* Today the typical unit in the capitalist world is not the small firm producing a negligible fraction of a monogeneous output for an anonymous market, but a large-scale enterprise producing a significant share of the output of an industry or even several industries, and able to control its prices, the volume of its production, and the type and amounts of its investments...
...cit., pp...
...277 and passim...
...Rostow and Max Millikan, A P (N.Y.: Harper Bros., 1957), . 56...
...3 ff...
...cit., p. 2 6 36 Quijano op...
...as well, international relations theories tend to obscure the essentials of U.S.-Latin American relations...
...In case there is any doubt about this "hidden agenda" of the Alliance, let us recall that it was initiated simultaneously--and by no coincidence--with the Bay of Pigs invasion a;.d with the establishment of counterinsurgency campaigns wherever a threat to stability existed in Latin America...
...And, if coupled with an agrarian reform, import-substitution could lead to income redistribution and incorporation of the lower classes into the national economy...
...In the dependent countries, foreign capital, in its monopolistic forms, has come to dominate the entire development process, and imported factors of production (such as capital and technology) have become the central determinants of economic development and socio-political life...
...it is, in short, fragmented, dependent, and ultimately illusory development...
...1. The characteristics of the international system include: -- The prevailing form of capitalism (mercantile or industrial, corporate or financial...
...Prentice-Hall, 1960), e.g., Frederick Dunn, "The Scope of International Relations," p. 13 53 Sunkel, op...
...l 4 By the mid-1960's the total paid by Latin countries in debt service payments exceeded the amount of new loans, 1 5 and at the end of Eke decade the external debt had doubled since 1960...
...Dependency and imperialism are, thus, two names for one and the same system...
...Lenin, op...
...By itself, the world market encompasses all flows of goods and services among nations outside the Communist trade bloc--all capital transfers (including foreign aid or overseas investment) and all commodity exchanges...
...Thus dependency during the colonial period and during much of the 19th century was manifested primarily through the development or export-import "enclaves...
...The most recent call for a "more efficient" and "broadening" iision of labor among the nations of the Western Hemisphere came in the Rockefeller Reportthe argument being that "everyone"--bth Latin America and the U.S.--"gains in the process...
...The conditions which shape Latin American dependency today are quite distinct...
...7-8, 319...
...194-S 43 Quijano, op...
...Insofar as the international system lies at the heart of dependency, that system must be understood in its entirety--not only at its point of impact on Latin America, but also at its origins in the dominant nations...
...But, in the absence of a transformation of national economic structures this panacea (supported by U.S...
...Department of Commerce data (from Balance of Payments Statistical Supplements, Surveys of urrent Business), cited in agdotff, op...
...The identification of imperialism with solely physical or direct coercion projects an oversimplified image of overt domination, and almost automatically excludes from examination the subtler mechanisms through which dependency has been internalized and perpetuated in Latin America...
...See below, Section two...
...T e degree of concentration internationally (one hegemonic power or rival powers and, if one hegemonic power, which nation (Spain, England, or the U.S...
...see critique by Ralf Dahrendorf, "Out of Utopia," American Journal of Sociology, Sept., 1958 9 Fo the argument that foreign investment and aid stimulate development, see for example, W.W.Rostow, The Stages of Economic Growth (London: Cambridge Univ...
...A total rupturing of dependency as an internal condition of underdevelopment requires in addition--and indeed as a precondition for autonomy or independence from the international system--a profound transformation, an anti-capitalist, socialist transformation, of their own socio-economic order...
...It traces Latin American underdevelopment to that region's function in the world market and * Under the Nixon administration certain structural changes have been initiated in the U.S...
...b) as a market for manufactured goods...
...and international aid agencies as well as CEPAL) promises to be no more viable than import substitution: 1) because unless accompanied by strict regulations on foreign investments, economic integration will benefit foreign rather than local firms, the former having the capital and advanced technology to support regional enterprises which are beyond the capacity of local firms...
...It implicitly or explicitly postulates a clear dichotomy between internal and international structures, thus ignoring the reality of Latin American dependency...
...And growth rates for the entire region and for some of the most industrialized22 nations ere lower during the 1960's than during the 19,15-60 period...
...and they facilitate long-range planning and minimize the risks of foreign investment for the corporations, principally by stabilizing the local investment climate...
...Vitale, . cit...
...Greenwich, Conn: Fawcett, 1968...
...71 O'Connor, op...
...Since industrialization required far more capital than was currently available from domestic sources, foreign investment and foreign aid on terms favorable to Latin America were seen as necessary and desirable...
...The alliances and conflicts of clientele classes with other domestic classes are shaped to a considerable extent by their previous and present alliances with foreign interests...
...The second, which maintains or assumes that there has been a net inflow of capital and technology from the developed nations into Latin America (through foreign investments and aid) and that the region:.has benefited from that inflow, flies directly in the face of the facts.* Recognition of this distortion in existing theories leads directly to the starting-point for a critical analysis of Latin underdevelopment: that Latin America is today, and has been since the--rth century part o an international system dominated by the now-developed nations, and that Latin underdevelopment is the outcome of a particular series of relationships to that international system...
...figures, cited by Andre Gunder Frank, "The Underdevelopment Policy of the United Nations in Latin America," NACLA NewsLetter, Dec., 1969, p. 7 4 Simon Hanson, "The Alliance for Progress: The Sixth Year," Inter-American Economic Affairs, Winter, 1968, p.54 (taken from House Appropriations Subcommittee Hearings for 1969) 5 CEPAL, Los Deficit Virtuales de Comercio y de Ahorro Interno la Desocupacion Estructural de America Latina (Santiago: EPAL), p. 45 6 Hanson, o. cit., p. 42 7 "The Ideology of Developmentalism:American Political Science's Paradigm-Surrogate for Latin American Studies," forthcoming in Berkeley Journal of Sociology, 1970 8 See: for example, the work of structural functionalists such as Gabriel Almond...
...This historical condition finds its contemporary expression in the unfavorable position of the 'peripheral" nations in world trade, steaming from the low income elasticity of demand for Latin American exports and the high income elasticity of demand for the industrial imports into those countries...
...cit., p. 17 61 Bosch, op...
...Nor does it contribute toward an explanation of dependency in Latin America: for dependency is not created by occassional military interventions or even gunboat diplomacy * A notable non-Marxist exception to the following discussion is Hobson...
...Economic Commission for Lation America' CEPAL), and particularly its failure to explain the economic stagnationfavors some countries to the detriment of others, and limits the development possibilities of the (subordinate) economies...
...which historically involved prolonged occupation and/ or overt political control by the U.S...
...cit., p. 340 63 Schumpeter, op...
...And on the basis Of the ties between the state and private interests in the dominant nations (in this case, the U.S...
...Luis Vitale, "Latin America: Feudal or Capitalist?," James Petras and Maurice Zeitlin (eds...
...142-6 45 see Cardoso and Faletto, p.cit., p. 20 46 For a good example see Raul Prebisch, Toward a Dynamic Development Policy for Latin America new ork: U.N., 1963) 47 See Frank, "Latin America: A Decrepit Capitalist Castle with a Feudal-Seeming Facade," nthly Review, Dec., 1963, and other works by Frank...
...Rather, dependency has been a chronic condition of Latit American development, maintained by the day-te-day and for the most part peaceful relations between Latin America and the dominant nations...
...see also speech by Sal Marzullo of the Council for Latin America, "The Role of the Private Sector in Latin American Development," Jan., 1970, p. 10 77 Johnson, o p.cit., p. 26 78 O'Connor, "Public Loans and Investments and I.atin American Underdevelopment" (manuscript) p. 6 79 "A Latin American Common Market Makes Common Sense for U.S...
...19 and aggravation of social problems in Latin America during the 1960's...
...04 Moreover, any of the classical Marxist writings on imperialism are specific to a particular historical era (e.g...
...Latin America: Reform or Revolution...
...144-S 11il CEPAL, Estudio Economico de America Latina (annual) (Santiago: PAL...
...And in the international environment there is need of an apparatus to guarantee not only "the rationalization of international capital flows and monetary transactions," 7 7 but also maximum political stability...
...But so long s they follow the capitalist road of development, they will continue to depend upon foreign investment, and thus will eventually have to make their compromises with and cater to foreign interests...
...corporate interests abroad: The CIA, the State Department and the Pentagon exercise numerous forms of political pressure, provide training for local military "civic action" and counterinsurgency programs, military assistance, and ultimate direct protection of U.S...
...Dos Santos, "El Nuevo Caracter...
...33 CEPAL, E Desarrollo Industrial de America Latina (Santiago: CEPAL), p. 47...
...The subordinate nation becomes, to one degree or another, the object of the needs and interests of certain groups in the dominant nation...
...Perhaps this is understandable in the light of its socio-economic roots...
...2 1 Dependency means, then, that the alternatives open to the dependent nation are defined and limited by its integration into and functions within the world market...
...U.S...
...The inadequacy of the CEPAL model represents, the failure of a particular social class, with particular interests, to offer a long-range alternative to L.atin ericaca* Til I IMITS O TE DEPENDENCY MODEL AND ITS INTEGRATION WITI A THEORY OF IMPERIALISM let us return now to the dependency-imperialism model...
...20, 1969 1T-AL, E Segundo Decenio, p. 9 15 Miguel Wionczek, "E Endeudamiento Publico Externo y la Inversion Privada Extranjera en America Latina," (unpub...
...4 These classes carry out certain functions on behalf of foreign interests...
...First, because it is dependent--because it 4s controlled by monopolistic foreign26 corporations and adapted to imported capital-intensive technology,--industrialization has generated not employment but unemployment...
...Thus, for example, the Alliance for Progress and, 30 years earlier, the Good Neighbor PolicyS were seen as real "departures" from previous U.S...
...it does so indirectly, by generating and reinforcing within Latin America an infrastructure of dependency...
...Although they seldom analyze it in detail, many of the dependency theorists do proceed from a definite (Marxist) conception of the roots of the international system in the U.S.51 Thus in a sense my aim in this section is less to add anything new to the dependency model than to make explicit an implicit dimension of the model.23 al capitalist system, the range of alternatives open to these governments is limited t changing certain minor aspects of their relation to the dominant nations (such as gaining trade concessions, more economic or military aid...
...Imperialism,"J Monthly_ Review, Nov., 1966 12 U.S...
...3 5 5) Introduction of advanced, capital-intensive foreign technology, without regard to size or composition of the local labor market, and consequent aggravation of unemployment 6 (Which in turn results in restriction of the domestic market): in several countries (e.g., Chile, Colombia, Peru) employment in manufacturing industry actually declined as a percentile of total employment between 1925 and 1 900);6) Also as a result of foreign control over techno.logy, its restriction to those sectors in which foreign capital has a direct interest...
...Rosa Luxemburg, The Accumulation of Capital (.Y.: Monthly Review Press...
...In this sense modern imperialism has an element of what one writer calls "welfare imperialism...
...Santiago~ Instituto Latinoamericano de Planificacion Economica y Social, ILPES, 1967), p. 2323 Anibal Quijano, "Dependencia, Cambio Social y Urbanizacion en Latinoamerica," (Santiago: CEPAL, 1967) (mimeo...
...Horowitz, Op...
...Keith Griffin, Underdeve-pment in S ih America (London: Allen Unwin, 1969), PP...
...1969 48 See for example, Fernando Cardoso, "The Industrial Elite," in S. Lipset and Aldo Solari (eds...
...Griffin, p. cit., p. 57 37 Cardoso and J.L...
...Similar disparities have marked the uneven development of various regions within Latin America...
...These characteristics of contemporary capitalism give rise to certain generally shared interests of the multinational corporations with respect to their overseas operations.* First, there arises a need to control all aspects of the production process, including the sources of supply and processing of raw materials, a well as the markets or outlets for commodities.74 Second, as the scale, monopolistic concentration, conglomeration, and internationalization of private capital increase, the dependence upon immediate profit returns from overseas investments is reduced...
...In the absence of these clientele classes within the dependent nation, dependency could not be perpetuated: "The basic correspondence between the dominant interests (of the dominant society and those of the 4pendent society) is a sine qua non of dependency...
...3) because regional integration removes the pressure for drastic social reform which would normally be created by industries of scale requiring large markets...
...Santiago: 1966), p. 13 38 Sunkel, op...
...cit., pp...
...p. cit., p. 24...
...In most Latin American nations, the industrial sectors lie at the heart of and regulate the growth of the entire national economy...
...thus the logical conclusions of many non-Marxist theories of imperialism almost converge withthoseof international relations theory...
...l What does this mean...
...La Crisis del Desarrollismo y la Nueva Dependencia (Lima: Moncloa, 1969), p. 145 24 V.I...
...resurgent labor movements, as in Argentina...
...Thus the international system is reinforcing a bourgeoisie which will in the long run be incapable of maintaining Latin America within the orbit ot the international capitalist system...
...In fact, so long as they remain within the internation*The irony is that much of the empirical evidence which contradicts (and is used to refute) the classical CEI'AI...
...3 2 specific characteristics of dependent industrialization are: 1) Increasing foreign control over the most dynamic and strategic industrial sectors (through direct ownership and control over production, control of marketing and distribution, or control of patents and licenses...
...cit., p. 174;-'5T7'-nor, "The Meaning..," 8l O'Connor, "The Meaning..," p. 9 82 Ibid., p. 20...
...For Latin America this has entailed increasing poverty, as the gap in income and growth rates between the industrial nations and Latin America is constantly widening...
...As a means of overcoming Latin America's inherent disadvantage in the world market and excessive dependence upon one or a few primary exports, and as a means of stimulating internally--rather than externally--oriented development, the CEPAL solution has been importsubstituting industrialization...
...Fourth, on the grounds that capital shortage as been one of the main obstacles to industrialization, CEPAL recommends increased foreign investment and aid...
...normal" periods of capitalist expansion...
...it analyzes U.S...
...4) Despite production for the internal market, adaptation of the entire economic structure "to the needs of supplying specialized exports at prices acceptable to the buyers" .in the dominant nations...
...Hobson, Imperialism (Ann Arbor: Univ...
...18-19...
...6 9 3) Increasing "internationalization" or "multinationalization" of the operation (not the ownership or control) 7 0 ' * of capital...
...Trade within the international system is increasingly protectionist (tariffs and quotas, imposed by the dominant nations) and is increasingly incorporated within the structure of the multinational corporations...
...32 See for example Marcos Kaplan, "Estado, Dependencia Externa, y Desarrollo en America Latina," in Matos Mar (ed...
...Griffin, op...
...5-6 73 Magdoff, "The Age of Imperialism," Monthly Review, June, 1968, p. 24...
...They generally treat those relations in terms of policies and policy-choices, which presumable could have been or could be changed by more "enlightened" policymakers...
...It is in terms of the relation between the state and private capital in the dominant nations that we may understand why the international system perpetuates underdevelopment in Latin America- and ultimately why policies such as the Alliance for Progress can not resolve the underdevelopment problem...
...p. 5; see also Tomas Vasconi, "Cultura, Ideologia, Dependencia, y Alienacion," in Jose Matos Mar (ed...
...Thus the multinational corporations are creating the conditions whereby their own expansion in Latin America will be limited...
...It is not a fleeting policy, but a stage in the development of capitalism as a world system.o Moreover, while recognizing the importance, necessity and inevitability of military or coercive actions abroad, a Marxist analysis understands these not as the essense of imperialism, but rather as the ultimate recourse, when the subtler mechanisms of imperialism are insufficient to contain a threat to the existing international system...
...In contrast to the above, Marxist theory of imperialism* addresses itself directly to the economic basis (as well as the political-military aspects) of American policies and to the causes of dependency and underdevelopment in Latin America...
...Third, as underdevelopment is intensified and new sectors of the population are radicalized, dependent or comprador governments, subservient to foreign interests, are forced to employ overt repression, not only against revolutionary movements but also against popular'movements (e.g., peasant land invasions, as in Chile...
...275-8 22 Fernando Cardoso and Enzo Faletto, "Dependencia y Desarrollo en Americs Latina" (mimeo...
...By associating imperialism with a phenomenon that has characterized international political relations since the beginning of time, this conception is so broad as to deprive the term "imperialism" of any specific meaning...
...These pressures were eventually resisted by the Nixon Administration--not least, perhaps, because the W.R...
...Given the declining value of Latin American ex- ports and the rising prices of goods imported by the region, Latin America faces an increasingly serious balance of payments crisis and a "virtual commercial defic t" in the coming decade...
...They shed little light, for example on w the Latin American governments have not carried out the necessary structual reforms...
...THE DEPENDENCY MODEL The basic premises of the dependency model, as first claboraled by a group of Latin American social scientists,17 * differ sharply from those of American social science development theories...
...S Thus CPAL advocates the intensification rather than the rupturing of ties to the dominant world powers--and (unintentionally) the intensification of dependency...
...cit., p. 66 39 Griffin, o. cit., pp...
...Although my account of the dependency model is taken largely from the work of these Latin Americans, they should not be held responsible for those elements (e.g., the infrastructure o dependency) which I have added here...
...Thus, for example, no less important than the alliances or conflicts of Sao Paulo industrialist with the Brazilian proletariat or coffee growing interests are his economic and ideological alignments with Wall Street bankers or foreign industrial interests...
...private investment directed toward the industrial sector in Latin America has risen from 35% in 1951 to 60% in 1962.30 *The' s examples are two of the most salient, but by no means the only ones...
...And regardless of their intentions to implement far reaching domestic reforms, they will be limited in practice by the legacy of dependency as institutionalized within their own class interests and alliances, within the existing industrial base, and so on...
...7, 64-5 64 For varying interpretations of the nature and driving force of capitalism and imperialism, see Hobson, ocit...
...1968, p. 6 16 Summary of CEPAL, E Segundo Decenio, in New York Times, Apr...
...To break out of dependency 21 * Thus dependency is not the confrontation of all interests in the dependent society against those of the dominant society, nor does it imply the "alienation" of Latin elites from their "real" interests...
...of Michigan Press, 1965) 58 Juan Bosch, Pentagonism: A Substitute for Imperialism (N.Y.: Grove Press, 1968) 59 e.g., Joseph Schumpeter, "Imperialism," in Imperialism Social Classes (N.Y.: Meridian, 1955), pp...
...and other industrial nations in underdeveloped areas has 'resulted in a net outflow of capital from the underdeveloped to the developed nations, a decapitalization of the former...
...The international system today is characterized by: advanced industrial capitalism (corporate integrated with financial capital...
...131 ff...
...This does not necessarily mply blanket acceptance of the writings of Lenin, Rosa Luxemburg, or any other individual Marxist...
...From this analysis follow certain political implications...
...2 i From the foregoing, it becomes clear that underdevelopment in Latin America is structurally linked to development in the dominant nations...
...Treasury Department exerts pressures for tariffs and quotas on imports from Latin America which are competitive with U.S...
...How can this failure be explained...
...Characteristics of world trade (mercantilism, "free trade," or protectionism...
...25 the state...
...2 7 Politically as well, Latin American development has been limited by the fact that the international system is a "stratified system of power relations:"' policy decisions about resource allocation and all aspects of national development are conditioned, and options imited, by the interests of the developed societies...
...THE CEPAL MODEL The starting-point of the CEPAL analysis is Latin America's "peripheral" status vis-a-vis the advanced industrial "centers," as manifested primarily in the region's historical evolution as an exporter of primary commodities...
...and students...
...Most American social scientists have evaded this task either by: 1) treating Latin countries as self-contained units whose economic, social or political systems can be analyzed in themselves...
...Nevertheless, when the primary function of the state is to stimulate private enterprise, when the private sector is largely controlled by foreign interests, and when the state bureaucracy itself relies on material and ideological support from abroad, as in Brazil today, the 'autonomy" of the state bureaucracy must be illusory...
...and every other dominant capitalist nation were to suddenly disappear, Latin American dependency would not be immediately ruptured...
...and 4% in Europe...
...in many sectors foreign corporations have been buying out formerly national industries...
...Latin America's function within the system is shifting from a supplier of raw materials and agricultural commodities to an arena where certain phases of industrial production are carried out--but still under the auspices of foreign corporations.* The degree of foreign control in the principal'economic sectors is increasing...
...Multinational corporations are: plants that purchase inputs from one branch of a corporation located in the same or a different country and sell outputs to another branch of the ,tne corporation located elsewhere...(They) are 3ble to mobilize, transform, and dispose of capital on a regional or even world-wide sc:,le-in effect constituting themselves as extrateritorial bodies.72 In short, the (non-Communist) world has replaced the nation as the arena for their operations in both production and marketing...
...A has been seen above, it is no natural accident that the Latin American countries have remained, until recently, exporters of primary products and importers of manufactured goods...
...Gonzalez-Casanova, oP...
...relations with Latin America: namely, the attempt to avoid, and to obviate the need for, overt military intervention or direct political control wherever possible...
...op...
...To the extent that all classes and structures in Latin American society have to a greater or lesser degree internalized and institutionalized the legacy of dependency, that legacy is much more difficult to overcome than the more overt and direct ties (such as administrative control, military occupation) to the dominant nations...
...cit., p. 236 75 Magdoff, "Economic Aspects..," pp...
...p. 22 29 Cardoso and Faletto, op...
...But this recommendation flies in the face of considerable evidence that foreign investment and aid have serve- as channels for the outflow of 5 capital from Latin America rather than the inflow...
...Given the dichotomy between domestic politics and "relations that take place across national boundaries,"55 the only "domestic factors" which receive any consideration are rather obvious ones, such as Con ressional pressures...
...8 2 The full import of this partnership between the state and private capital goes far beyond the scope of this discussion...
...The specific impetus for the dependency theorists was their increasing dissatisfaction with n earlier Latin American model (that of the U.N...
...Dos Santos, "Dependencia Economica y Alternativas de Cambio en America Latina" (mimeo...
...Dos Santos, Dependenc'a Ecoomica" pp...
...With its internationalization, the Latin American industrial bourgeoisie loses its ideological hegemony and control over other popular nationalist forces...
...This theory insists, however, that isolated military or political actions be understood in their over-all context, which'is the preservation of capitalism as an economic order...
...First, its explanation of why Latin America has been at such a disadvantage in the world market relies too heavily on the nature of traditional Latin exports, nd pays insufficient attention to the conscious policies and the specific needs of the developed nations...
...cit., p. 57 54 e.g., Bryce Wood, The Makin of the Good Neighbor Policy (N.Y.: Norton, 1967);fSamuel Bemis, The Latin American Policy of te United States (N-Y.: Norton, 1967) 27 55 Dunn, op.cit., p. 13 56 John D. ontgomery, The Poli-ics of Foreign Aid (N.Y.: Praeger, 1962) 57 J.A...
...In addition, it limits the expansion of the domestic market, which is a necessary condition for the expansion of foreign investment in Latin America (as well as for Latin American development...
...A moderate redistribution of income in Latin America provides a larger market for American exports, as well as a safeguard against potential political instability...
...Thus, dependent industrialization has meant that as more and more opportunities for development are opened up by industrialization, Latin American countries are increasingly unable to take advantage of these opportunities...
...By obscuring the essential relationship between public policy and private interests, international relations theories must devise ad hoc explanations--or excuses-for the failure of porTcles such as the Alliance for Progress...
...Businessmen Too," Fortune June, 1967 80 Furtado, op...
...Simil#T analyses have been made of dependent urbanization" and of the dependent or comprador state...
...From the standpoint of the U.S...
...In short, the possibility is never considered that the basic assumptions and theories underlying the Alliance are themselves invalid---that in a very real sense, the failure of the Alliance to resolve the underdevelopment problems of Latin America reflects the bankruptcy of American theories for analyzing those problems...
...Osvaldo Sunkel, "Politica Nacional deesarrollo y Dependencia Externa," Estudios Internacionales, Apr., 1967, p. 57 30 CEPAL, External Financing in Latin America (N.Y.: U.N., 1965), p. 215 31 see Quijano, o cit...
...107-12, 142 ff...
...From this perspective we must also reconsider the original objectives of the Alliance...
...Harry Magdoff, "Economic Aspects of U.S...
...Heather Dean, "Scarce Resources," (Ann Aror: adical Education Project...
...29 20 ITt, p. 26 21 Pb-o Gonzalez-Casanova Sociologia de la Explotacion (Mexico: Siglo XXI, 1969), pp...
...Elites in Latin America (N.Y..: Oxford Univ...
...b) Intersecting the process of dependent industrialization is another, equally fundamental dimension of dependency: the creation and/or reinforcement of clientele social classes...
...To introduce the model of imperialism, we begin with a skeletal description of the main units of contemporary capitalism and imperialism...
...Government and Private Investment Abroad (Eugene, Ore.: Univ...
...7) Lack of a domestic capital goods industry in most countries, and consequently an increased rather than reduced dependence on imports, and rigidities in the composition of imports...
...they create advantages for U.S...
...or e) any combination of the preceding...
...7 ff...
...4) The progressive shift from rivalry among the capitalist powers (such as prevailed, for example, during the heyday of colonialism, from 1870 to 1914) toward closer integration of the capitalist world, and inability of the secondary capitalist powers thus far to offer an effective challenge to American hegemony...
...Or they may argue that imperialism is "unprofitable" 6 2 or "irrational" in a capitalist society, basically vestigee" or "atavism" survising from a pre-capitalist era...
...policy also precludes attention to the institutions and social groups in the American socioeconomic system which shape those policies...
...But this stability is precisely what was not, and could never have been, achieved by strengthening Latin America's ties to the international system and thereby intensifying Latin American dependency...
...foreign aid apparatus (principally greater reliance on the private sector to administer aid directly, and on multilateral institutions such as the orld Bank...
...the monopolies arising therefrom...
...But given the essentially monopolistic (rather than competitive) nature of contemporary capitalism, partic-.ar interests are often superceded by the overriding common interests of corporate capital...
...But the forms -rTdependency have varied...
...In addition to these services for specific corporations, foreign aid fulfills more general functions for the preservation of American capitalism (such as keeping Latin .America in the capitalist orbit and gaining cooperation of Latin American governments by offering loans as rewards or threatening to withhold aid...
...op...
...p. 31 44 Quijano, op...
...20, 1969 17- the principal ones are Fernando Cardoso, Enzo Faletto, Theotonio Dos Santos, Anibal Quijano, Jose Luis Reyna, Osvaldo Sunkel, Tomas Vasconi and others cited below 18 Theotonio Dos Santos, "Crisis de la Teoria del Desarrollo y las Relaciones de Dependencia en America Latina," reprint from Boletin del CESO, Oct.-Nov., 1968, p. 28 19 Ibid., pp...
...These factors do not imply the invalidity of the idea of integration, but the illusory nature of integ-ration under present conditions as a substitute for basic structural change...
...And if imperialism is dissociated from the global expansion of capitalism on the international level, the concept loses its potential as an explanation of dependency in Latin America...
...For our purposes these theories may b classified in 3 groups: International relations theories, non-Marxist theories of imperialism, and Marxist theories of imperialism...
...Even among Marxists there is considerable controversy as to the specific nature of modern imperialism...
...only its form has changed.* Thus complementarity is not incidental but essential to the Latin economies...
...I include them, nevertheless, because they do deal with exploitative relations among nations...
...of Oregon Press, 1962), p. 103 72 O'Connor, "The Internationl Corporations and Economic Underdevelopment" (manuscript, to be published), pp...
...presented to Consejo Latinoamericano de Ciencias Sociales, Lima, Oct...
...Celso Furtado, "La Concentracion del Poder Economico en los Estados Unidos y sus Proyecciones en America Latina," PenSamiento Critico-#20, 1968 70 "Notes...," op...
...cit., p. 25...
...In the end these sorts of explanations are unsatisfactory for one basic reason: They are based on the very ame premises which gave rise to the Alliance in the first place...
...Not only does this create the usual threat from an increasing reserve army of the unemployed...
...But in the first place, these explanationsn" may be refuted partly on empirical grounds...
...cit., p. 7; O'Connor,7'Tublic Loans..," p. 6 83 Dos Santos, "El Nuevo Caracter de la Dependencia" revised and reprinted in Matos Mar (ed...
...It is this thesis which will be developed in the dependencyimperialism model presented here...
...cit., p. 4; Vasconi, op...
...nevertheless, the state or public sector of the dominant nations plays an important role in relations with Latin America and even in the operations of private capital...
...and providing markets for and in effect subsidizing U.S...
...cit., p. 32...
...72-3 David Horowitz, Empire and Revolution (N.Y.: Random House, 1969), p. 42 25 Griffin, op...
...Leading Issues in Development Economics (N.Y.: Oxford Univ...
...indeed the former are often shaped 'by the latter...
...Thus, "hemispheric security" comes to mean protection not against interference by non-hemispheric power or even "International Communism," but rather against the threat of truly independent regimes of any type in Latin America...
...In a sense the entire dispute about financial vs...
...Today such criticism has become so respectable that disillusioned liberals like Sen...
...and so on, ad infinitum...
...We shall accept the definition of dependency as: a situation in which the economy of a certain group of countries is conditioned by the development and expansion of another economy, to which their own (economy) is subjected;...an historical condition which shapes a certain structure of the world economy such that it * It has been shown in a number of studies that foreign investment by the U.S...
...A relatively healthy Latin'American economy improves the climate for investment and trade...
...269-70...
...4 y -From the preceding discussion, it may be seen that dependency does not simply mean external domination, unilaterally superimposed from abroad d unilaterally "producing internal consequences " The internal dynamics of dependency are as much a function of penetration as of domination...
...goes back to Lenin's critique of Kautsky, in Lenin, op...
...their own assumptions preclude a real understanding of its roots, and thus of its consequences...
...For our purposes its significance is that the state performs certain services which are essential to the overseas operations of the multinational corporations...
...Fourth (and partIv as a response to the failure to achieve real income redistribution or expansion of the domestic market in Latin countries), there is an interest in regional integration of markets...
...American policy makers and social scientists have devised endless ad hoc explanations: The United States did not send enough aTd...
...cit., pp...
...They may advocate a foreign policy "independent" of the United States, as in Brazil durinR the early 1960's, or they may successfull expropriate foreign holdings in some sectors, as has een done in Peru and as may be increasingly the case in other countries...
...Thomas Balogh, "The Mechanism of New .. perialism: The Economic Impact of Monetary and Commercial Institutions in Africa," Institute of Statistics Bulletin, Aug., 1962, p. 332 speaks of the IMF and other international aencies as substitutes for direct colonial administration over underdeveloped nations in Africa and Latin America 67 Lenin, op.cit., p. 52 (my emphasis) 68 Paul Baran aInd aul Sweezy, Monopoly Capital (N.Y.: Monthly Review Press, 1966), p. 6 69 "Notes on the Multinational Corporation," Monthly Review, Oct., 1969, pp...
...286-7...
...But the characterization of Latin American society as having been "pre-capitalist" or "feudal" or dominated by feudal oligarchies is misleading, since Latin American society and odes of production since the 16th century have been mercantile, that is, geared toward exporting to an international capitalist market.*' In addition the CEPAL theorists assumed that an indigenous industrial bourgeoisie would be developmentalist, progressive, nd nationalistic--a premise which clearly requires reexaminati 2 R, in view of the actual behavior of that bourgeoisie...
...The principal needs of the dominant nation(s) in the international system (agricultural commodities, minerals, cheap labor, commodity markets, capital markets, etc...
...Moreover, such basic problems as balance of payments deficits, unemployment, income disparities and an insufficient domestic market have been aggravated rather than resolved...
...When these movements grow and, in response, the measures of repression are generalized to the entire nation, opposition to the government must increase (even, as in Brazil, among sectors of the middle class which initially brought it to power), and the repression-resistance cycle must become chronic...
...It represents, rather, a correspondence or convergence of interests which are materially based in the socioeconomic positions of the dominant classes in the dependent society as well as of the dominant classes in the dominant society.4 means, then, to break out of the capitalist order whose expression in Latin America is dependency This same point may be understood through a brief discussion of one previous "international system" analysis of Latin American underdevelopment: the classical odel of the United Nations Economic Commission for Latin America (CEPAL...
...The nature of thpe political ties to the dominant power(s) (colonial or nominal independence...
...Such a case occurred, or example, when the Peruvian government expropriated the holdings of the Standard Oil subsidiary, the IPC, in 1968, and there were pressures to cut off the Peruvian sugar quota...
...By focusing on the international system, the dependency model takes as its point of departure a concrete datum which has conditioned Latin American history: that since the Spanish conquest--that is, since its existence as Latin American, as opposed to indigenous Indian, society,--Latin America has played a certain role in the political economy of one or another dominant capitalist nation (Spain and Portugal it the colonial and early post-independence period, England during most of the 19th century, and the United States since the beginning of the 20th century...
...Service (interest and amortization) payments on the foreign debt, as well as the flow of :ofits abroad, continue to mount in Latin nations, and consume an ever-increasing share of export earnings (now more than 351 for the region as a whole...
...extraneous factors (such as the fall in Latin American export commodity prices) counteracted the benefits of the Alliance...
...5 These examples indicate the magnitude of Latin America's development problems, and the failure of the Alliance to cope with them in terms of its own rhetoric and stated goals...
...Like their behavior, the ideologies of these classes reflect their dual position as junior partners of metropolitan interests, et dominant elites within their own societies...
...Thus the'Alliance was merely one ore means of integrating Latin America into the international system which creates dependency and'hinoers development in that region...
...Baran, op...
...cit., pp...
...Until the 1930's, when some Latin nations began to industrialize, their economies (and the economy of the region as a whole) typified "desarrollo hacia afuera" (externally-oriented development), geared to the needs of the then-industrializing nations which dominated the world market, rather than to the needs of their national markets...
...and more generally Latin America's integration into the orbit of the dominant capitalist nations is becoming more complete, despite nominal political independence...
...Let us take two examples of what it means to speak of the infrastructure of dependency: a) dependent industrialization, and b) clientele classes.** a) Industrialization in the broadest sense implies far more than the construction of new factories and the production or processing of commodities...
...international system, which is governed by the interests of the dominant nations...
...corporate capital is distorted: Lenin himself define"financial calital" as: "the concentration of production...
...The emphasis shifts toward long-range planning, maximum security and avoidance of risk,i5 and preservation of a favorable climate (ideological, political, and social as well as economic) for the perpetuation of*corporate operations and for longrangeprofits...
...This restricted range of options is, in fact a principal feature of Latin American dependency.a5 Moreover, as the dependency model makes clear, the autonomy of Latin American decision-makers is not to be taken for granted: while they may go through the motions of deciding policy, the substance of their decisions often reflects foreign interests more nearly than national interests...
...Press, 1964), pp...
...Although the world market served as an instrument of expansion in European and American development, it restricts autonomous development in the dependent nations...
...And it is through the infrastructure of dependency that the legacy of Latin America's integration into the international system is transmitted and perpetuated within Latin America, thereby limiting the possibilities for development...
...For the theory of imperialism specifies whose particular needs or interests in the dominant nat-ions--i.e., those of the corporate and financial capitalists--are served by the international system...
...Day-to-day operations are becoming more and more difficult, and planning f the future uncertain and sometimes futile...
...Those very social classes which were to have been incorporated within the national economy have been progressively marginalized...
...Faced with the by now obvious bankruptcy of import-substitution during the 1960's, CEPAI...
...The notion of an imperialistic relation between two or more nations implies (regardless of the particular theory of imperialism) a decisive inequality between those nations, an exploitative relationship (i.e., one which serves the interests of the dominant nation at the expense of the subordinate nation), and the crippling of the latter's autonomy...
...Press, 1967...
...Michael Barrat-Brown, After Imperialism (London: Heinemann, 1963), among others 65 This Marxist critique of non-Marxist theories of imperialism (which see iperialism as a policy, which divorce the politics of imperialism from the economics, etc...
...In this sense the overriding task of the modern capitalist state is the stabilization and rationalization of world capitalism and imperialism as a socio-economic order...
...It confronts the symptoms rather than the basic causes...
...Nevertheless, it would be an oversimplification to maintain that the international system causes underdevelopment directly...
...industrialized, Latin America remained for centuries an exporter of primary raw materials and agricultural products...
...6 As part of the state (public apparatus foreign policy is assumed to reflect the public interest, and thus is seldom examined in terms of dominant private interests within the U.S...
...It had to fail, because dependency is not a stable or stabilizing condition for Latin American development...
...The exclusive focus on U.S...
...goods, etc...
...It appears to assume that atin American nations are bounded units, led by autonomous decision-makers...
...These characteristics of the international system and of Latin America's function within it impose definite limitations on the possibilities for Latin development...
...a 2 CEPAL, E1 Segundo Decenio..., p. 12 3 U.N...
...It is at this point that we reach the limits of the dependency model...
...Even where, as in Latin America, "local capital is the most important source of financing for wholly owned subsidiaries of U.S...
...28 ale Johnson, "Dependency, te Denationalization of Development, and the International System" (mimeo...
...Some The proportion of U.S...
...62, 265 26 Nelson Rockefeller, The Rockefeller Report on the Americas (Chicago: Quadrangle Books 1969), p.102 27 Griffin, cit., pp...
...Vitale, op...
...corporations," 7 1 control over the disposition of that capital remains in the hands of the U.S.-based parent corporation...
...2. The degree and nature of the Latin country's ties to and function within the international system involves: -- Function: a) primarily as a supplier of raw materials or agricultural products...
...We may now draw together the parts of the model...
...the dominant nations' need for raw materials and, more important, for commodity and capital markets...
...The Alliance was billed as a massive infusion of capital to promote a peaceful social and economic revolution in Latin America...
...3 4 3) As a result of foreign ownership, outflow of capital (profits) abroad...
...agencies esti- mate present equivalent unemployment to be about 2St of the labor force...
...Frank, Capitalism a Underdevelopment in Latin America (N.Y.: Monthly Review Press, 1967...
...The rise of a national industrial bourgeoisie would weaken the traditional oligarchies (mainly landed and import-export interests...
...Thus the Latin American economies hawe always been shaped by the global expansion and consolidation of the capitalist system, and by their own incorporation into that system.* In this sense, Latin American societies "brought into existence with their birth" their relation to the international system, and hence their relations of dependency...
...The basic assumption of most international relations theories, that there exists at least a minimal autonomy and freedom of action for all nations as actors in the international arena, is challenged by all theories of imperialism...
...1969, p.' 99...
...Even the faltering steps toward industrialization more recently have not altered the fundamentally complementary character of the Latin American economies: the industrial sectors remain dependent on imports (of capital goods) and, as a result of the increasing foreign control over these sectors, growth is still governed largely by the needs of foreign economies...
...and Latin America, rather than alterations in the basic relationship...
...the Latin American governments failed to carry our their end of the bargain...
...d) as an arena for direct foreign investment...
...In this sense the clientele classes come to play in Latin America today the role historically performed by the comprador bourgeoisie (export-import mercantile elites, whose strength, interests, and very existence were derived from their function in the world market...
...relations with Latin America this model is inappropriate...
...government abroad and the structure of the American socio-economic system...
...Economic Developmentfor Latin America, . 8; Frank, Capitalism and Underdevelopment, Chap...
...Halperin, o. cji...
...op...
...From the perspective of the dependency-imperialism model, it becomes evident that the Alliance could not have succeeded: first, because, contrary to the assumption that foreign aid and investment make a positive capital contribution to Latin American development, the thrust of the empirical evidence is that these have served as mechanisms for the extraction of capital...
...As one Latin American put it, The process of internationalization has two faces: one dependent face (the present) and one liberating face (that of the future...
...investors in Latin America) find the rules that govern foreign investment constantly changing, almost always in what, from the Ametican investor's point of view, is an undesirable direction...
...To insure against sudden changes in the "rules of the game," controls over the political situation in Latin America--generally informal and indirect--must be tightened...
...and second, because the cumulative effect of Latin America's contact with the dominant capitalist nations has been and remains the generation of dependency as an internal condition...
...Before proceeding further, we must clarify the concrete meaning of the "world market" and the "international system...
...Insofar as Latin American development has been limited since the 16th century by fulfilling one or another function in the international system, the fact of dependency has been a constant...
...cit...
...But the world market is the core of a broader "international system:" This international system includes not only a network of economic (market) relations, but also the entire complex of political, military, social, and cultural international relations organized by and around that market (such as the Monroe Doctrine, the Organization of American States, "Free World" defense treaties and organizations, and media and communications networks...
...4 The clearest example of clientele classes today are those elements of the Latin American industrial bourgeoisie which expand and thrive within the orbit of foreign capital..(whether as) wholesalers..or as suppliers of local materials to foreign enterprises or as caterers to various other needs offoreign firms and their staffs...
...Reyna, "Industrializacion, Estructura Ocupacional y Estratificacion Social en America Latina" (mimeo...
...Foreign aid agencies perform a variety of services for the corporations: they socialize the indirect operating costs of the multinational corporation (transferring those costs from the corporation to the American--ultimately the Latin American--taxpayers...
...Ellis (ed...
...10 Frank, "Sociology of Development and Underdevelopment of Sociology," Catalyst, Summer, 1967, pp...
...Second, non-Marxist theories tend to dissociate imperialism from the economic system (in this case capitalism) in the dominant country...
...But if imperialism is dissociated from capitalism than it must be regarded as little more than a policy...
...Economic Commission for Latin America (CEPAL), E Segundo Decenio de las Naciones Unidas para el Desarrollo: Aspectos Basicos de la Es-rategia del Desarrollo de America Latina (Lima CEPAL, April 4-23, 1969), pp...
...The international system is the static expression and outcome of a dynamic historical process: the transnational or global expansion of capitalism...
...the merging or coalescence of the banks with industry...
...The international system affects development in Latin America by means of certain institutions, social classes, and processes (e.g., industrial structure, socioeconomic elites, urbanization, and so on...
...For Rockefeller, of course, Latin dependency and lack of autonomy (and consequently underdevelopment) is clearly an un-problem.20 -- The degree of relative autonomy (periods of 20 international war or depression vs...
...That Latin America has fulfilled certain definite functions in the "world economy" or world market, and the domestic development of Latin America has been limited or conditioned by the needs of the dominant economies within that world market...
...Claude McRian nd Richard Gonzales, International Enterprise in a Developing Economy (Lansing, Mich: 1964...
...American hegemony (vis-a-vis Latin America...
...Through it the principal force which has conditioned Latin American develoment--the global expansion of capitalism, which is te engine of the international system--is personified...
...INSTABILITIES AND CONTRADICTIONS IN THE SYSTEM On the basis of this analysis of dependency and imperialism in Latin America, let us return briefly to the starting-point: the failure of the Alliance for Progress...
...indeed such conflicts exist and remain important...
...cit., p. 146 42 Paul Baran, 7The P1olitical Economy of Growth, (N.Y.: Monthly Review, 1957), pp...
...cit., p. 37 41 Vasconi, op...
...Rather than listing and criticizing, point-bypoint, the various theories devised by American social scientists to explain Latin underdevelopment (as I have done elsewhere), I shall focus here upon the principal distortion underlying all of these theories: The failure--perhaps the refusal--to examine Latin America in terms of its relationship to the advanced industrial nations, particularly the United States...
...Or, as in the case of the Dominican Republic, the imperialist power is finally forced to intervene directly, thereby transforming a reformist movement into a potentially revolutionary force...
...firms over existing or potential local competitors...
...for a good case study of Brazil, see Dos Santos, "El Nuevo Caracter de la Dependencia" (Santiago: Centro de Estudios Socio-Economicos, CESO, 1968) 34 Gonzales-Casanova, o i, pp...
...It is through the infrastructure of dependency that the international system becomes operative within Latin America...
...The specific forms of dependency in Latin America in any given historical period follow from the characteristics of the international system and of Latin America's function within it...
...Second, CEPAL's class analysis places the entire responsibility for retarded industrialization upon "traditional" or "feudal" oligarchies within Latin America...
...2) A growing tendency toward conglomeration or diversification: that is, the control by a smaller number of corporations over production in various different and often unrelated sectors, thus augmenting the corporation's strength, and simultaneously minimizing the risks of production or marketing, in any one sector...
...Lenin, Imperialism, The Highest Stage of Capitalism (Peking: Foreign Languages Press, 1965), pp...
...66 James O'Connor, 'v"h Meaning of Economic Imperialism," (Ann Arbor: Radical Education Project), p. 18...
...The degree of concentration of capital in the dominant nation(s) (competitive or monopolistic capitalism...
...What is the infrastructure (internal structures) of dependency...
...cit., pp...
...As Fortune points out the advantages of integration, it not only eliminates tariff barriers, but also provides "the chance to move to the broader, more competitive, and potentially more profitable task of supplying a'.market big enough to be economic on its own terms...
...79 Finally, the nature of private corporate operations overseas is such that they require protection by the (imperialist) state...
...Latin America was first integrated into the international system in its mercantile phase, under Spanish dominance, and served primarily as a provider of raw materials and agricultural commodities...
...8 1 As the interests of the state come to overlap with those of the multinational corporations, "the state enlists more and more private capital in its crusade to maintain world capitalism intact," and there arises a "partnership" between public and private capital...
...And thus, by implication Latin nations cannot break the chains of dependency merely by severing (or attempting to sever) their ties to the international system...
...5 In addition, international relations theories tend to deal with "policy choices," the implication being that Latin American governments, acting autonomously, could make alternative decisions...
...7 8 Under these conditions, however, Latin American development responds primarily to the needs of the foreign corporations, rather than national needs...
...While the specific mechanisms of aid are changing, the essential objectives remain the same...
...cit., p. 14...
...Far more important,.however, was the unstated objective: to stabilize Latin America, and to make -the region perpetually safe for private American investment...
...European and American development and Latin underdevelopment are not two isolated phenomena, but rather two outcomes of the same historical process: the global expansion of capitalism...
...Moreover, the state is sometimes faced with conflicting interests among the multinational corporations.* a In short, the state (and even the corporations themselves) are sometimes forced to sacrifice specific interests in order to serve the 'higher interest"--the preservation of the capitalist system as a whole...
...3 3 2) Increasing competitive advantages for (often monopolistic) foreign enterprises over local firms, particularly in large-scale industries...
...3-4 40 Johnson, op...
...The theory of imperialism provides a view "from above"--a model of the specific nature of the international system and its roots in the dominant nations...
...277 ff...
...2) because the increased scale and advanced technology of regiona' enterprises aggravates national development problems, such as unemployment, unless these negative effects are counteracted through deliberate policies...
...49 CEPAL, E Segundo Decenio p. 8 50 See references in notes 1-16 above 51 e.g., Dos Santos, "Crisis..," p. 23 52 This distinction may be found (implicitly at least) in several selections in Stanley Hoffman (ed...
...Dependency" is conceived as a "conditioning situation," that is, one which determines the limils and possibilities for human action and conduct" -- in this case, for development in Latin America...
...cit., p. 4; Dos Santos, "Crisis...
...embassies provide crucial information to the corporations, represent their interests to the local governments, and influence local government policies...
...n-,I In most conventional international relations theories the international context is depicted as an arena in which independent (though not necessarily equal) players bargain about competing or conflicting national interests, and in which war occasionally erupts when the bargaining process breaks down...
...The dependent face and the liberating face present themselves in one and the same process...83 FOOTNOTES 1 U.N...
...there are occasions (such as the Cuban missile crisis) when "security" considerations are determinative...
...The distinguishing feature of dependent (as contrasted with interdependent) development is that growth in the dependent nations occurs as a Reflex of the expansion of the dominant nations, Z and is geared toward the needs of the dominant economies--that is, foreign rather than national needs...
...2 4 "Unevenness" means that some areas have developed more rapidly than--ofteh at the expense of--others...
...Industrialization is not by nature dependent...
...After suggesting the insufficiencies of the first two bodies of theory for the specific problem at hand, I shall indicate why the third provides an appropriate ccrplement to the dependency model...
...government decisions, that is, over the apparatus of * The emphasis given here to the monopolistic.corporations is not meant to detract from the importance of the institutions of financial capital (particularly banks) nor to underestimate the extent to which corporate and financial capital have been integrated...
...cit., p. 27 13 Summary of CEPAL, E Segundo Deceno X in New York Times, Apr...
...42 Similarly, although in very different ways, the state bureaucracy and other sectors of the middle class, such as the technical, managerial, professional or intellectual elits, become clientele when their interests, actions and privileged positions are derived from their ties to foreign interests...
...Victor Perlo, T Empire of High Finance (N.Y.: International Publishers, 1956...
...35 Magdoff, op...
...Even if the U.S...
...or other hegemonic powers...
...Keith Gr-i-n and Ricardo French-Davis, "El Capital Extranjero y el Desarrollo," Revista Economica, 1964, pp.1622...
...ct., pp 74 Magdoff, "The Age..," p. 23...
...Horowitz, op...
...hus underuevelopmelLt in Latin America may be distinguished from the situation of "undeveloped" societies, the latter referring to "the situation of those economies and 'peoples--ever more scarce--which have no market relations with the industrialized nations...
...For the international system and Latin American dependency are fraught with serious contradictions, of which we can mention only a few here...
...By itself the dependency model provides a view "from below...
...beginning to industrialize, Latin Aerica has become ore dependent than ever upon certain critical imports (heavy capital goods for industrial facilities...
...In addition, the quality of industrialization is integrally related to political decision-making, social structure, urbanization, and so on...
...This unevenness has been manifested through an "international division of labor:" while Western Europe and the U.S...
...The real and ultimate failure of the Alliance for Progress, then--and of any other policy designed to intensify Latin America's integration into the international system,--was the failure to stabilize Latin America...
Vol. 4 • June 1970 • No. 3
