Dependency Theory Research Paper

 1. The Dependency Concept

The facts to which dependency refers have existed for a long time, not only in connection with the emergence, consolidation, and evolution of the present-day historical-social system of capitalism, but also with former world systems, all of them asymmetrical: comprised of units located at their core, their semiperipheries, and their peripheries. They are linked by domination–subordination relationships, which are structural because they stem from and are driven by the principles which govern the system as a whole, and hence, the location of the different units.

For the current system, those principles are anchored in the accumulation of capital and in its varying forms, generating modes of international division of labor that comprise and shape the relations among the center, semiperiphery, and periphery. The classical political economy of Adam Smith, David Ricardo, and others in the eighteenth and nineteenth centuries recognized the worldwide nature of capitalism, though they saw the international division of labor among the system’s units (countries) as a source of the wealth of nations, operating through Ricardo’s theory of comparative advantages. Marx’s critique of classical political economy viewed that division as a source of inequalities and asymmetries among peoples, and therefore posed the need to construct a true social model of the whole system in the long term (Wallerstein 1974, pp. 388 ff.). Though his imitators ‘froze’ Marx ’s model and stripped it of its historical nature, his successors continued to focus on the evolution of inequalities and asymmetries. This was especially the case of the theorists of imperialism (Lenin, Bukharin, Hilferding, Luxemburg) and of unequal and combined development (Trotsky and his followers).

Subsequent to the interpretations based on Marxism and imperialism theory, efforts were made in the political economy to understand the nature of ‘backwardness’ and the causes of poverty in many societies; this line is represented by Arthur Lewis and Gunnar Myrdal, and later by Albert Hirschman and Amartya Sen, to name only a few significant authors (Rist 1997, pp. 69).

Oddly, the dependency concept did not acquire a central theoretical status in either of those two areas of analysis, but was accepted in its most rudimentary form: Certain economies depend on others to buy or sell raw materials and manufacture. It was only with the appearance of studies on the subject of development in Latin America and the Caribbean that ‘dependency’ became a social-scientific term, though a very controversial one.

2. External Dependency

The term ‘dependency’ appears for the first time in the ‘developmentalism approach,’ so called because its key concept (and chief concern) was development, pursued in order to overcome ‘underdevelopment’ (a term coined at that time), which emerged from the UN Economic Commission for Latin America and the Caribbean (ECLA). Following the proclamation and adoption of the United Nations’ Charter, in addition to the Security Council, responsible for finding peaceful ways to resolve conflicts among nations, the Economic and Social Council (ECOSOC) was created to coordinate activities in the UN’s other main field of action—promoting the development of peoples. To help the ECOSOC fulfill its mission, economic com- missions were designed for the five continents. Despite the initial resistance to its institutionalization by the USA, ECLA was founded in 1948 and received that country’s blessing in Point Four of President Truman’s January 1949 State of the Union address, referring to the need to overcome underdevelopment (Rist 1997, p. 70). It became the most intellectually creative of all the commissions, and the most active one in designing and applying development policies (Sonntag 1994, p. 228).

Developmentalism’s diagnosis begins with a critique of the classical (Ricardian) theory of comparative advantages: The economic relations between the core and the periphery tend to reproduce the conditions of underdevelopment and increase the distance between the developed and underdeveloped countries. Paraphrasing Cardoso, the invisible hand of the market appeared, not as a mother but as a stepmother, intensifying inequalities rather than correcting them. The reason for that outcome is that productivity grows faster in the central countries’ manufacturing industries than in the peripheral countries’ production, and that growth cannot spread to primary (agricultural or mineral) production through equalization of the prices of both sets of products, because of union pressures and the presence of oligopolies in the developed countries. The end result is the trend toward deteriorating terms of trade and a growing concentration of technical progress in the manufacturing or core countries (Sonntag 1988, pp. 24–5).

Therein lies the key: with this center–periphery axiom ECLA posits a discontinuous worldwide development of capitalism. It identifies the (structural) place of the economies in which capitalist techniques of production are first adopted as the core, and that of the economies which are further behind in technological and organizational terms as the periphery. This dichotomy is constantly reproduced by the dynamic of the international division of labor, to the point where the periphery tends to transfer part of the fruits of its technical progress to the core while the latter retains those of its own progress (CEPAL ECLA 1969, 160 ff.).

This latter assertion poses the concept of external dependency. Dependency lies in the peripheral economies’ reliance on the determinant dynamic of the world system of which they are part: that of the core countries, simultaneously reinforced by the transfer of part of the peripheral countries’ surplus to them. An odd feature of this school of social science thought is that, in spite of ECLA’s clear analysis of external dependency, in its strategic proposals to achieve development it fell into a voluntaristic confidence in the utility of foreign investment, the industrialized countries’ cooperation, and a transformation of international trade.

3. Structural Dependency

A debate began at ECLA during the first half of the 1960s on the results of the development policies grounded in developmentalism and intensively applied theoretical reorientation in two distinct directions: a renewal of developmentalism itself, and the emergence of dependentism (Sonntag 1988, p. 31 1994, p. 230).

This new approach not only drew on the debates over developmentalism, but also reflected: (a) the rediscovery of Latin American authors from earlier decades with critical ideas (Sergio Bagu, Caio Prado Jr., Jose Carlos Mariategui, etc.); (b) a renewal of Marxism during the 1950s and 1960s, through Baran’s Political Economy of Growth and Baran and Sweezy’s Monopoly Capital; (c) studies by authors such as A. Gunder Frank on the capitalist nature of underdevelopment; and (d) Latin American interpretations inspired by a less orthodox Marxism than that of the previous period, advanced by authors in different countries. There is considerable controversy about the significance of these influences: while Cardoso (1976, p. 4) estimates them less, Dos Santos (1998, pp. 103) and Rist (1997) attribute far greater importance to them.

The first texts of what was rapidly to become a new paradigm of thought on underdevelopment in Latin America (and also in Africa, where it contributed to Samir Amin’s school of worldwide accumulation of capital, in the developed countries, and to a lesser extent in Asia) initially circulated as mimeographed discussion papers among the members and associates of the Latin American Institute of Economic and Social Planning (ILPES), since 1961 ECLA’s think-tank and cadre’s school. Two of these papers, those of Cardoso and Faletto (1976a) and Quijano (1977), were the sources of dependentism. Those that followed drew on these initial efforts, some opposing their theoretical proposals and political conclusions, others assimilating them and incorporating them into their own studies.

The first dependentists started with a critique of the modernization theory introduced by ECLA in the late 1950s, and posited an integrated analysis of development combining the study of social change processes in the economic sphere with that of transformations of structures of classes, social sectors, and groups, plus that of the changes occurring within the system of domination. The accent is on sociological interpretation in the strict sense, that is, on the transformations of the social structure and system of domination, since they are the epicenters of the dynamic of development. The latter is the outcome— always subject to change—of the attempts by the different social actors, alone or in alliances, to achieve their goals through their collective actions (Sonntag 1988, p. 63).

The dependentists hold fast to the center–periphery axiom, but redefined the concept of dependency, positing that it ‘directly alludes to the conditions and the existence and operation of the economic system and the political system, showing the linkages between the two in both the internal dimension of countries and the external one.’ The aim is ‘to seek to demonstrate that…the mode of national economies’ integration into the international market implies defined and differing forms of interaction by the social groups of each country, among themselves and with external groups’ (Cardoso and Faletto 1976a, pp. 24, 28). Accordingly, the relations of political struggles among groups and classes, on the one hand, and the history of the economic-political structures of internal and external domination, on the other, are the key questions. So, they are interested in inquiring into the meaning of the basic structural relations and their phases of development in their dual determination: within the local systems of domination, and their relations with the international order (Cardoso and Faletto 1976b, p. 1). Thus dependency becomes a framework which influences the fundamental tendencies of development in the subordinated societies, by leading to and producing change, impregnating and modifying all aspects of the social structure, social psychology, and cultural institutions, including those of sectors which had been relatively untouched by sociocultural influences prior to the beginning of dependency (Quijano 1977, p. 23).

The dependency concept thus acquired a dialectical content. The relations implied are not perceptible in terms of ‘structures,’ but rather in terms of collective actors and their practices stemming from their interests and motivations. Change processes are not automatic mechanisms but the outcomes of those practices. That is, dependentism—in its first formulations—tries to restore the subjective actor(s) to history and the dynamic dimension(s) to socialscientific interpretations. It is, once again, a ‘global analysis’ (Cardoso and Faletto 1976b, p. 4) which stresses the multiple mediations among actors and structures.

A division soon appeared within the field of dependentism. One group, led by Dos Santos (1970) and Marini (1969), claimed that it had achieved the status of a theory of dependency, while another, led by Cardoso and Faletto, insisted on dependentism as a methodological approach. While the former were known as neo-Marxists (Dos Santos 1998, p. 105), the latter asserted that the dependentist approach only implied ‘an empirical analytical effort to reconstruct a ‘‘concrete whole.’’’ For Dos Santos, Marini, and their followers dependency as a ‘theory’ implied that a formal and testable body of propositions was inherent to the concept, while Cardoso and his group feared that thus the approach would be formalized (Cardoso 1976, p. 14).

The debate between the two groups was fiery, long, and sometimes bitter. It addressed metatheoretical issues, but focused chiefly on political ones: whether capitalist development was viable or not under conditions of dependency. The ‘theoreticians’ asserted the impossibility of any such development, while Cardoso, Faletto, and others would not agree with that idea and its assumption that, to improve the quality of analysis, dependency theory had to be formalized (Cardoso 1976, p. 24). They argued thus against the mechanical- formal style of those who believed in the ultimate ends of history, guaranteed by the necessary structural inability of dependent capitalism to expand and reproduce itself.

Dependentism, in either of its two versions, oriented social scientific analysis from the 1960s through part of the 1980s and fostered—as the proponents of both schools agree—a far deeper, more complete and more dynamic understanding of the social reality of underdevelopment.

Special mention should go to what Cardoso (1976, p. 8) has called ‘the consumption of dependency theory in the United States.’ There interest centered on first, the historical debate over the supposed Latin American feudalism; second, the relations among the dependent countries’ social, economic, and political structures and the international capitalist system; third, research on and denunciation of the forms of ‘foreign aid,’ the CIA, and the Machiavellian actions of the multinational corporations, and so forth. This concern was politically legitimate and drew attention to real aspects of the contemporary process. But little by little it ended up restoring the priority of the external over the internal (Cardoso 1976, p. 13).

Criticisms of dependentism is as old as the approach theory itself. Especially scholars of industrial societies emphazised (a) the absence of an analysis of political power in the relations between core, periphery, and semiperiphery (political scientists), and (b) dependentism’s blame of all problems of underdevelopment to external factors (economists). Both criticisms are dubious. On the one hand, the question of power was in the very center of dependentism’s emphasis on the structures of internal–external domination. On the other, the insight of the dialectics between external and internal factors was essential, at least to dependentism as approach.

4. The Future Of Dependentism

Studies inspired by the dependency theory or approach are part of the constantly renewed effort to restore a tradition based on an analysis of the structures of wealth and domination, which does not undermine the historical process as the movement derived from the permanent struggle among groups and classes. It does not accept the existence of a given course of history, but conceives it as an open process. Hence, if structures limit the range of oscillation, the imagination and actions of human beings reinvigorate and transform them, even replace them by others that are not predetermined. However, these studies had a special characteristic: Instead of being limited to the abstract historical dimension and the analysis of narrowly defined problems, they used the ‘nonvulgar’ historicalstructural method to analyze concrete situations and sought—by returning to the subject of development—to pose questions of importance for national policy and the relations among the central capitalist economies and the dependent and nonindustrialized periphery (Cardoso 1976, p. 7). In this sense, contemporary criticism to dependentism as limited to the nation-state as unit of analysis (Grosfoguel 1996, p. 146) is scarcely justified.

The dependency approach and even theory is today a part of historical sociological analysis as it is understood by Wallerstein (1974). But within it an important function may be performed: since the latter tend to give priority to the systemic interpretation of the world-system, dependentism could focus on studying the behavior of concrete peripheral (and semiperipheral) societies in the context of that system, precisely because it stresses the collective actors, their interests, their practices, and the outcomes within them (as well as their repercussions on the system as a whole). So understood, dependentism would not disappear into the broader context of historical sociology, but would combine with it to form a complementarity that would permit more incisive approaches to each society’s particular characteristics within the framework of its place in the world-system, in this era of globalization (Dos Santos 1998, Sonntag 1988, 1994).

To achieve that goal, ‘it is necessary to have a sense, not so much of proportion as of being ridiculous, and avoid the simplistic reductionism so common among the modern butterfly collectors who abound in the social sciences’: they classify in history types of dependency, modes of production, and laws of development, in the misconception that their discoveries may free history of its ambiguities, speculations, and surprises (Cardoso 1976, p. 25). It is, on the contrary, necessary to have the patience for disciplined research, to arrive at a dialectic which is neither lazy nor limited to the construction of general and abstract formulas as if they were synthetic.

In this assertion lies perhaps the challenge not only to this school of thought but also the entire sociology social science of underdevelopment, particularly in these times of ‘globalization,’ uncertainty, and complexity.

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