Dependency Theory
While on a whirlwind tour of Ulster and Dutchess County this last
weekend, I dropped in at Bard College, my alma mater, where I was fortunate to
pick up a copy of "Development Theory in Transition: The Dependency Debate
& Beyond, Third World Responses" by Magnus Blomström and Björn Hettne
(Zed Press, 1984). It is indispensable for those trying to make sense of the
assault on "dependency theory" which began in the early 1970s.
Although Robert Brenner was perhaps the best known "orthodox"
Marxist who tried to overturn the analyses of A.G. Frank et al, there were
others. In Latin America, where "dependency theory" first arose, some
of the key names in the counter-offensive are probably known to you: Ernesto
Laclau, an Argentinian who after defending "orthodox Marxism" against
the MR theorists soon dumped Marxism altogether in favor of radical democracy;
Fernando Cardoso, who began as a dependency theorist but who eventually
discovered that its claim that local bourgeoisies are not a revolutionary force
was false. Perhaps this theoretical adjustment explains his decision as
President to rule Brazil today according to conventional neoliberal
prescriptions.
While Brenner--typically--did not mention Laclau and company, his
criticisms are identical. In essence, the reaction to the MR theorists was
linked to a turn away from the colonial revolution and the Cuban model in
particular. It represents a renewal, albeit in academic cap and gown, of
Kautskyism. It puts forward the notion that countries such as Brazil and
Guatemala were suffering not from capitalism, but from a lack thereof. Implicit
is the idea that capitalist development is required before socialism. The notion
of going from a plantation economy, such as Cuba's, to socialism based on
campesino armies and parties was foolish. Such 'autarky', to use Brenner's term,
would only lead to disaster. This is exactly the argument Kautsky used against
Lenin in identical circumstances.
Where did the idea of "stages" come from? Most of us assume
that Marx and Engels invented the concept and that works such as the
"Communist Manifesto" and "Origins of the Family, Private
Property and the State" introduced it to a Europe that had never heard of
such a thing. In reality, Marx and Engels, as they themselves admitted, had
merely adapted the notion of stages from bourgeois social scientists.
The "4 stage" theory of history was widely accepted in 17th
and 18th century Europe. For the whole story, I recommend Ronald L. Meek's
"Social Science and the Ignoble Savage" (Cambidge, 1976). Meek might
be known to many of you for his book on the labor theory of value published by
Monthly Review press. "Social Science and the Ignoble Savage" is
essential reading for those who are trying to come to grips with the Eurocentric
character of much of Marx and Engels' writings.
Meek makes a very important point. Central to the writings of 17th and
18th century social science was a belief that American Indians were the prime
example of the 'first' or 'earliest' stage of human social development. Unlike
those like Rousseau who made the case for a 'noble savage,' these historians and
philosophers thought that American Indians represented the worst humanity had to
offer. Since American Indian society was on the lowest stage of human
development, its disappearance would represent progress. John Locke was one such
thinker and his justifications for British colonialism are well-known.
Adam Smith gave lectures at the University of Glasgow that described a
stages version of history, including 1) the Age of Hunters, 2) the Age of
Shepherds, 3) the Age of Agriculture, 4) the Age of Commerce. He described stage
one:
"If we should suppose 10 or 12 persons of different sexes settled
in an uninhabited island, the first method they would fall upon for their
sustenance would be to support themselves by the wild fruits and wild animals
which the country afforded. Their sole business would be hunting the wild beasts
or catching the fishes. The pulling of a wild fruit can hardly be called an
employment. The only thing among them which deserved the appellation of a
business would be the chase. This is the age of hunters."
All that Marx and Engels did was attach some new stages to this kind of
schema, namely socialism and communism. Within bourgeois social science, stagism
without the socialist phase continued to enjoy a long and illustrious career.
Perhaps the best known stagist of recent times was Walt Rostow, architect of the
destruction of Vietnam, who posited 5 stages:
1. The traditional society; 2. the pre take-off stage; 3. take-off; 4.
the road to maturity; 5. the society of mass consumption.
It would be a mistake to try to generalize too much about the role of
capitalism in the third world from Marx and Engels's writings. They offer a
contradictory picture. On one hand you have their writings on Ireland which
depict a country victimized by capitalism. On the other hand you have frequent
endorsements of capitalist penetration, especially in the earlier writings. For
example, with respect to the 1847 war between the USA and Mexico, Engels wrote,
"for such a country [Mexico] to be dragged into historical activity by
force is indeed a step forward. It is in the interest of its own development
that henceforth Mexico should be placed under the tutelage of the United
States." When you add to this the rather misinformed notion of the Asiatic
Mode of Production, you do not have a very emancipatory vision. Marx did move
away from these positions during the last years of his life when he was
corresponding with the Russian populists. In letters to Zasulich, he endorsed
the idea that peasant communes could provide the basis for a new revolutionary
society without passing through capitalism. Unfortunately he died before he
could give these ideas a full elaboration.
The first systematic attack on stagist theory was mounted by Leon
Trotsky. He analyzed Russian class formation and came to the conclusion that the
bourgeoisie was too beholden to foreign imperialist powers and to the landed
gentry to make a full-scale assault on backward social institutions. This task
would devolve upon the industrial proletariat whose strength was a byproduct of
foreign investment in huge industrial plants. This development--the creation of
a special kind of gravedigger--was the only thing capitalism had to offer
Russia, certainly not progress in the terms defined by Marx's Herald Tribune
articles on India.
Trotsky's ideas remained in a distinct minority for obvious reasons.
"Official" Marxism in the USSR retreated to Kautskyism. Communist
Parties everywhere in the world, especially during the Popular Front period,
looked everywhere for local bourgeois elements who could lead the fight against
"feudalism". For example, they supported Batista in Cuba. Most of the
great socialist or revolutionary movements of Latin and Central America in the
20th century drew upon non-Communist sources for inspiration. Sandino was
sympathetic to anarchism. The Nicaraguan and Cuban revolutions looked to
Mariategui, whose Marxism drew upon indigenous themes almost identical to those
found in Marx's letters to Zasulich. Mariategui was ostracized by the Comintern
who viewed him--falsely--as some kind of Trotskyist.
Ironically one of the first challenges to stagism in Latin America that
gained any kind of mass acceptance originated within the UN through the auspices
of staff economists organized in the Economic Commission on Latin America (ECLA).
In the late 1940s they decided that the free trade export model that prevailed
in Latin America put their countries at a disadvantage. Raul Prebisch, an
Argentinian, was a key ECLA figure. He argued that import substitution and rapid
industrialization was necessary. (Eventually the CP's of Latin America fell in
line with the ECLA model.)
After some initial successes, the ECLA model failed to deliver the
goods. Although they were probably not capable of developing a full analysis
without Marxism, we would certainly understand that industrialization in itself
was insufficient. As long as imperialism was supplying the capital goods
necessary for factories and mines, national inequality would persist.
Some of the ECLA economists began shifting to the left during this
period, especially Celso Furtado, a Brazilian. Furtado theorized that the
problem was social structure. Imperialism had a vested interest in keeping large
sectors of the population marginalized. Although not a Marxist, he had stumbled
upon the phenomenon of the "reserve army of the unemployed" which
above all else guarantees super-profits in the periphery.
On a parallel track, another ECLA economist named Andé Gunder Frank
decided that Latin America was subject to the structural problems identified by
Monthly Review author Paul Baran in "Political Economy of Growth".
According to Baran, early colonization by Europe had left Asia (except for
Japan), Africa and Latin America in a disadvantageous position. Stagnation
rather than the kind of explosive growth depicted in Marx's early writings was
typical. Since the third world bourgeoisie was parasitic in nature, it was left
to workers and peasants to break with imperialism and move the nation toward
social equality and progress. It was no accident that the MR became strongly
identified with the Cuban and Chinese revolutions, which put these theories to
the test and seemed to confirm them.
Around the time that Robert Brenner began constructing his rebuttal to
Baran and company, Ernesto Laclau was also busily trying to refute Frank's
theories, which while certainly in need of correcting were at least hostile to
the notion of capitalist "development".
Laclau criticized Frank for blurring over distinctions between
capitalist and precapitalist modes of production. For Laclau, it made no sense
to talk about capitalism if unfree labor was involved. Since Latin America was
typified by unfree labor--ranging from slavery to the feudal-like 'mita'--Laclau
seemed to be making a valid point. He wrote in 1971, "If Cortez, Pizarro,
Clive and Cecil Rhodes are all and the same there is no way of tracing the
nature and origins of economic dependence in relation of production."
Laclau makes two fundamental errors. First of all, in identifying 16th
century Peru and Bolivia as "feudal", he is superimposing a
socio-economic category that had scarce connection to what Marx and even
bourgeois social scientists understood by the term. Precapitalist Europe,
particularly during the high middle ages, was typified by static, tributary
social relations in which peasants exchanged surpluses for protection by the
lord of the manor. In fact, Incan Peru was a similar kind of society. When the
conquistadors overran the country, they might have retained superficial features
of feudalism (the encomienda and the mita), but the primary feature was
exploitation of labor in order to supply commodities for the world market.
Silver extracted in Potosi ended up in China and India. This was not feudalism,
but the earliest phase of capitalism without which the industrial revolution and
the "pure" form of the capitalist mode of production would not be
possible.
The other problem in Laclau is his diagnosis of contemporary Latin
America, which involves a sort of oddball version of Trotsky's "combined
and uneven" development. For Laclau, feudalism and capitalism exist
side-by-side in countries such as Peru in the 20th century. In the countryside,
where peasants are subject to forms of debt peonage, feudalism would seem to be
the problem. This is obviously an ahistoric approach since it fails to see the
implicitly capitalist nature of the plantation economy. Debt peonage exists not
as a social bond between aristocrat and commoner the way it did in the 12th
century, but as a means of exploiting what Marx called "toilers", the
non-proletarian masses whose only recourse is socialist revolution rather than
capitalist progress. In fact Laclau argued that the problem was not capitalism,
but INSUFFICIENT CAPITALISM. In other words, he defended a form of Kautskyism.
Cardoso, another ECLA economist, turned his back on dependency theory in
the mid 1970s. In a 1976 article ("The Consumption of Dependency Theory in
the USA"), he made a number of counter-arguments against the MR school:
1. Capitalist development at the periphery is viable. 2. Underpaying
labor in the periphery is not essential. 3. The local bourgeoisie is capable of
leading dynamic growth. 4. The penetration by multinational firms does not have
political consequences. 5. The only alternatives in Latin America are socialism
or fascism (I leave aside whether this was actually the MR position.)
In any case, after Cardoso "saw the light", he decided to
enter the bourgeois political arena. Here are quotes from his earlier dependency
phase and his new, more sophisticated understanding:
"It is not realistic to imagine that capitalist development will
solve basic problems for the majority of the population. In the end, what has to
be discussed as an alternative is not the consolidation of the state and the
fulfillment of 'autonomous capitalism,' but how to supersede them. The important
question, then, is how to construct paths toward socialism."
("Dependency and Development in Latin America")
"I am in favor of deregulating the economy. To put an end to
inflation means to deregulate the economy, right? The economists invented
indexation of the economy to correct the devaluation of the currency. When
inflation disappears, indexation will disappear. As we want to defeat inflation,
we will deregulate the economy." (Oct. 6, 1994, news conference.)
"A real process of dependent development does exist in some Latin
American countries. By development, in this context, we mean 'capitalist
development.' This form of development, in the periphery as well as in the
center, produces as it evolves, in a cyclical way, wealth and poverty,
accumulation and shortage of capital, employment for some and unemployment for
others. So, we do not mean by the notion of 'development' the achievement of a
more egalitarian or more just society. These are not the consequences expected
from capitalist development, especially in peripheral economies."
("Dependency and Development in Latin America")
"I am certain we must continue to fight inflation, because
inflation is what impoverishes Brazil and the Brazilian people. Inflation causes
an unfair distribution of income, it prevents calculations from being made and
it prevents domestic and foreign investments." (Oct. 6 news conference.)
"Of course, imperialist penetration is a result of external social
forces (multinational enterprises, foreign technology, international financial
systems, embassies, foreign states and armies, etc.). What we affirm simply
means that the system of domination reappears as an 'internal' force, through
the social practices of local groups and classes which try to enforce foreign
interests, not precisely because they are foreign, but because they may coincide
with values and interests that these groups pretend are their own."
("Dependency and Development in Latin America")
"The international system is a field of opportunities, of
resources, that must be sought naturally. We are a great country, with a clear
vocation for an active and responsible participation in world affairs."
("Let's Work, Brazil", Cardoso campaign manifesto)
"It has been assumed that the peripheral countries would have to
repeat the evolution of the economies of the central countries in order to
achieve development. But it is clear that from its beginning the capitalist
process implied an unequal relation between the central and the peripheral
economies. Many 'underdeveloped' economies -- as is the case of the Latin
American -- were incorporated into the capitalist system as colonies and later
as national states, and they have stayed in the capitalist system throughout
their history. They remain, however, peripheral economies with particular
historical paths when compared with central capitalist economies."
("Dependency and Development in Latin America")
"The process of liberalization of the economy and opening toward
the outside world will continue, not an objective in and of itself, but as a
strategic element in the modernization of our economy." ("Let's Work,
Brazil")
"We stress the socio-political nature of the economic relations of
production, thus following the 19th-century tradition of treating economy as
political economy. This methodological approach, which found its highest
expression in Marx, assumes that the hierarchy that exists in society is the
result of established ways of organizing the production of material and
spiritual life. This hierarchy also serves to assure the unequal appropriation
of nature and of the results of human work by social classes and groups. So we
attempt to analyze domination in its connections with economic expansion."
("Dependency and Development in Latin America")
"Privatization cannot be proposed or carried out under ideological
banners. Privatization imposes itself in order to increase society's investment
capacity, to increase competitiveness and, where it is the case, improve
management. ("Let's Work, Brazil")