DEPENDENCY THEORY: ANTECEDENTS, PREMISES - DUDAS - 2024

The dependency theory is based on the center-periphery model, which establishes that the poverty of certain countries (the peripheral ones) is due to a historical position of disadvantage compared to the more powerful countries (those of the center), so that the the latter were enriched at the expense of the former.

During the 50s and 60s, several Latin American social scientists and intellectuals developed a theory to respond to the underdevelopment that their territory suffered.

Uncle Sam teaching children from the Philippines, Puerto Rico, Hawaii and Cuba.

Background

Social Darwinism and colonialism

In October 1929, the crash of the Wall Street Stock Market, known as the crash of 29, gave rise to the great crisis of capitalism of the 1930s, which quickly spread to almost every country in the world. This period was called the Great Depression, and it lasted until the years of World War II.

This great crisis caused a series of theories that questioned the classic functioning of the capitalist economy. This made the Latin American countries begin to put forward ideas of a more Marxist nature, advocating greater State intervention in the economy.

ECLAC and dependency theory

In its most extreme form, dependency theory has strong Marxist roots. He sees the world from the perspective of globalization as a form of exploitation of certain countries over others, rich against poor.

In addition, it defends an “inside” look to achieve development: greater State performance in the economy, greater barriers to trade and the nationalization of key industries.

The premises on which the dependency theory is based are the following (Blomström & Ente, 1990):

1. There is an inequality in power relations, which is decisive in the deterioration of commercial conditions and consequently maintenance of the state of dependence of the peripheral countries.
2. The peripheral nations provide the central nations with raw materials, cheap labor, and in return they receive obsolete technology. Central countries need this system in order to maintain the level of development and well-being they enjoy.
3. The central countries are interested in perpetuating the state of dependency, not only for economic reasons, but also for political, media, educational, cultural, sports and any other area related to development.
4. The core countries are ready to suppress any attempt by the peripheral countries to change this system, either through economic sanctions or through force.

Raul Prebisch

Raúl Prebisch was an Argentine economist member of ECLAC, known above all for his contributions to the so-called economic structuralism and for his Prebsich-Singer thesis, which gave rise to the theory of dependency.

Prebisch argued that there was a tendency for trade conditions to worsen in relations between the powerful (center) and the weak (periphery) countries, benefiting the former and disadvantaging the latter.

According to him, the way for these weak countries to develop successfully was through industrialization and economic cooperation among the countries of the same peripheral group (Dosman, 2008).

In this way, and in part thanks to his role as executive secretary of ECLAC, reforms were carried out in the 1950s and 1960s, focusing above all on Import Substitution Industrialization (ISI) (ECLAC, nd).

André Gunder Frank

André Gunder Frank was a German-American economist, historian and sociologist of neo-Marxist ideology. Very influenced by the Cuban revolution, in the 60s he led the most radical branch of theory, joining Dos Santos and Marini, and in opposition to the more "developmental" ideas of other members such as Prebisch or Furtado.

Frank claimed that the existence of dependency relationships between countries in the world economy was a reflection of structural relationships within the countries and communities themselves (Frank, 1967).

He argued that in general, poverty is a result of the social structure, the exploitation of labor, the concentration of income and the labor market of each country.

The decline of dependency theory

In 1973 Chile suffered a coup d'état that resulted in a breakdown of ECLAC thought, and that caused the project to lose influence over time.

Finally, with the fall of the Soviet Bloc in the 1990s, the "dependentista" intellectuals who were still alive (Prebisch died in 86) took different paths.

Some more radicals, like Dos Santos, worked developing anti-globalization theories, others, like Marini, devoted themselves to the academic field, and others, like Frank and Furtado, continued working around world economic policy.

References

1. Blomström, M., & Ente, B. (1990). The theory of development in transition. Mexico DF: Economic Culture Fund.
2. ECLAC. (sf). www.cepal.org. Obtained from
3. Cypher, JM, & Dietz, JL (2009). The process of economic development. London & New York: Routledge.
4. Dosman, EJ (2008). The Life and Times of Raul Prebisch, 1901-1986. Montreal: McGill-Queen's University Press. pp. 396–397.
5. Frank, AG (1967). Capitalism and underdevelopment in Latin America. New York: Monthly Review Press. Obtained from Clacso.org.