Dependency Theory

Dependency Theory

Towards a Critique of Developmentalist: Dependency Theory • 1960s-- United Nations Economic Commission for Latin America. • Main Authors: Fernando H. Cardoso, Faletto, Theotonio Dos Santos. • Main Thesis:Underdevelopment is not the product of the persistence of “traditional” society; instead, it is generated by the particular fashion the expansion of capitalism assumes in the “periphery.”

Developmentalist approaches are wrong. The expansion of the market does not necessarily produce either modernization or development.On the contrary, capitalism makes societies look like “feudal” in the periphery.

Development and underdevelopment constitute the two sides of the same coin: capitalism.The periphery is underdeveloped because of the development of the center.

Flows of Wealth (Developed)Center (Underdeveloped) Periphery

The play between Center and Periphery reproduces in all scales (fractal structure)CenterPeripheryCenter-Periphery Center-Periphery Center-Periphery-Center-PeripheryCenter-PeripheryCenter-Periphery Unequal and Combined Development:

Sovereign States Center (Ex: England, the U.S.) Elites DEPENDENT DEVELOPMENT The State and the Nation split apart (capitalist) (popular) Non-sovereign States

WORLD MARKET PERIPHERY CENTER SOCIAL EXCLUSION (POVERTY)

Against Rostow, Huntington, Moore, and... Marx, Cardoso and Faletto argue that... Modernization, Industrialization, Urbanization, to Development do not lead in the periphery. Instead, they foster Underdevelopment, a “caricature” of the central societies.

For theorists of dependency, such as Cardoso and Faletto...

In the periphery, the development of capitalism leads to... • Dependent and unequal development (distorted, uneven, and pathological form of modernization). • Increasing dependency.

(economic and social integration fosters) Democracies, extended citizenship, and the rule of law, which PREVAIL in the Center Free market + Democracy (economic and social exclusion fosters) Dictatorships (or Formal Democracies), State violence, limited citizenship, and the (un)rule of law, which PREVAIL in the Periphery. Alliance: the State + Corporations Free market + Repression Politically...

Cardoso & Faletto: • “The same fundamental alliance which constitutes a dependent industrial capitalist state may organize itself institutionally within a context of authoritarianism, restricted democracy, or totalitarianism.”

SOLUTION: BREAK UP THE BONDS OF DEPENDENCY x x x x x x x x

SinceDependency = Capitalism,Breaking with dependency= Socialism

Cardoso & Faletto identify three main strategies to break the dependency bonds (target: the State) • Guerrilla movements organized against military dictatorships (ex: Argentina 1969-1975) • The Democratic Path: Salvador Allende’s government (1970-1973) • Military Reformism (ex: Perú) Importance of politics.

C & F: “the political struggle revolving around the state shows what is essential in this form of dependency: the style of development of the possibility of alternatives depends upon the resolution of this question of the state.”

South East Asia... • The explosive economic growth in South East Asia at the beginning of the 1980s was considered by most scholars the demise of the dependency theory. • Argument: the dependency theory cannot explain such a process of growth.

Wallerstein – The World-System • Our concepts and the units of analysis we choose do not allow us to understand the real organization of the world. • Problem: the developmentalist perspective consecrates the nation state as the main unit of analysis.

Instead, from a holistic perspective... • The notion of “mode of production” appears as central. • (def.) “the way in which decisions are made about dividing up productive tasks, about quantities of goods to be produced and labour-time to be invested, about quantitites of goods to be consumed or accumulated, about the distribution of the goods produced.” (345)

Modes of Production • “Reciprocal-lineage.” • “World-systems” • “World-Empire” • -“World-Economy”

“Reciprocal-lineage.” • Limited and elementary specialization of tasks and forms of exchange. Based on human labor. Limited growth. Mini-systems, short-lived (6 generations).

“World-systems”1:“World-Empire.” • Based upon agriculture. Surplus allows to maintain artisans and an “administrative” class. Extra-economic foundation (tribute, force, the power of the sword). Technological advance is not desirable per se. Everthing is “fixed” in the system. Political unity of the economy • Interest of the powerful on the survival of the subjected sectors.

“World-systems”2: “World-Economy.” Single division of labor within a system which “has no overarching political structure.” World-market, multiplicity of nation-states. Capitalism. No limits to profit. Starvation may be necessary for profit. Appearance of “the poor.”

Markets became dominant in the “World-Economy” • System economically unified and politically fragmented (World-market + Nation-States). • Different nation-states cushion and reinforce the effects of the market. • Importance of the role of the State...

Critical and “dependencista” approaches lead towards... • An increasing focus on the role of the State. • Lane: “Bringing the State Back In.”

Dependency Theory