Concepts of dependency

• Dependency theory is a school of thought in contemporary social science which seeks to

contribute to an understanding of underdevelopment, an analysis of its causes, and to a
lesser extent, paths toward overcoming it. It arose in Latin America in the 1960s, became
influential in academic circles and at regional organizations, spread rapidly to North
America, Europe, and Africa, and continues to be relevant to contemporary debate.
• dependency characterizes the international system as comprised of two sets of states,
variously described as dominant/dependent, center/periphery or metropolitan/satellite.
The dominant states are the advanced industiral nations in the Organization of Economic
Co-operation and Development (OECD). The dependent states are those states of Latin
America, Asia, and Africa which have low per capita GNPs and which rely heavily on the
export of a single commodity for foreign exchange earnings.
• What keeps poor countries from developing

• No convergence, why no catch up? Modernization theory (capitalism is

good) structuralism (capitalism is bad, exploited by countries trying to
help, structural adjustment programmes (SAPS), loans provided by the
world bank and IMF (capitalist institutions-on the basis that govts will
privatize their public institutions, free market reforms( capitalist bribery)
benefits multinational organizations from the West) divided into two
schools dependency theory and world systems theory.
Origins

• Latin American dependency theory consisted of two positions:

• reformist and Marxist.

• The reformist position is reflected in the work of authors such as Fernando
Henrique Cardoso, Enzo Faletto, Celso Furtado and Osvaldo Sunkel,

• while Marxist-inspired dependency theorists include Andre Gunder Frank,

Theotonio dos Santos and Ruy Mauro Marini. Although the reformist position was
significant from an academic/analytical point of view, the Marxist position
obtained more widespread international appeal and was generalised to a more
general theory of development by including perspectives from Africa and Asia
through the work of scholars such as Samir Amin and Walden Bello.
Continues…

Early features of this dependency perspective can be seen in the work of

Paul Baran (1957), and in the reports of the United Nations Economic
Commission for Latin America (ECLA) that centered on the work of Raul
Prebisch (1959). Out of this critical interruption, there emerged extensive
studies on underdevelopment from Andre Gunder Frank (1967, 1969, 1979),
Theotonio Dos Santos (1970), Fernando Cardoso (1972, 1973, 1977), Celso
Furtado (1971), Osvaldo Sunkel (1973), and others.
Prebisch and his colleagues were troubled by the fact that economic growth
in the advanced industrialized countries did not necessarily lead to growth in
the poorer countries
Differences within dependency school

• The debates among the liberal reformers (Prebisch), the Marxists (Andre
Gunder Frank), and the world systems theorists (Wallerstein) was vigorous and
intellectually quite challenging. There are still points of serious disagreements
among the various strains of dependency theorists and it is a mistake to think
that there is only one unified theory of dependency. Nonetheless, there are
some core propositions which seem to underlie the analyses of most
dependency theorists.

• For both systems, the world capitalist system that is responsible for
inequality, poverty and underdevelopment. The cure is communism-Marxist
• Not all dependency theorists, however, are Marxist and one should
clearly distinguish between dependency and a theory of
imperialism. The Marxist theory of imperialism explains dominant
state expansion while the dependency theory
explains underdevelopment. Stated another way, Marxist theories
explain the reasons why imperialism occurs, while dependency
theories explain the consequences of imperialism
Differences within Marxist school

• According to Foster-Carter (1973), there are three main differences between the classic orthodox
Marxist movement and the neo-marxist positions, the latter providing a basis for the dependency
theory.

• First, the classical approach focuses on the role of extended monopolies at the global level, and the
neo- marxist on providing a vision from peripheral conditions.

• Second, the classical movement foresaw the need for a bourgeois revolution at the introduction of
national transformation processes; from the neo-marxist position and based on current conditions of
Third World countries, it is imperative “to jump” to a socialist revolution, mainly because it is
perceived that national bourgeoisies identify more strongly with elite positions rather than with
nationalistic ones.
• Third, the classical Marxist approach perceived the industrial proletariat as having the strength and
vanguard for social revolution; the neo-marxist approach emphasized that the revolutionary class
must be conformed by peasants in order to carry out an armed revolutionary conflict
Marxist theories of exploitation, capitalism and Week 7&8
imperialism:
 Marxist theories of exploitation,
capitalism and imperialism:

• The theory of Imperialism is the theoretical

toolbox through which Marxism analyses
capitalism’s international system.

• Marx had expected the spread of capitalism

to lead to full capitalist development
everywhere (unless anticipated by socialist
revolution), while Lenin and his
contemporaries concentrated on the role of
monopoly and inter-imperialist rivalry. More
recently, the focus of theory has shifted to
the explanation of underdevelopment,
which has prompted a renaissance of
Marxist thought.
Research and be knowledgeable about the following on Karl Marx:

•Karl Marx`s background

•Terms that are central/core in any study on Karl Marx`s works:
•The economic base
•The superstructure
•Dialectical relations
•Means of production
•Forces of production
•Relations of productions
•The ruling class
•The ruled class
•False consciousness
•Alienation
•Historical materialism
• Capitalism
•Socialism
•Communism
Continues…

• Its founding block is that capitalism’s international system mirrors its

national system (it is also a system of exploitation): exploitation of less
developed economies by the more developed one

• Marxism’s conception of the operation of capitalism’s international

political economic system as opposed to both Orthodox and Heterodox
bourgeois views
Capitalism International system
HOW DOES DEVELOPMENT OCCUR ACCORDING TO KARL MARX?
 First Stage: (Initial stage)

Property was communally owned

Social life was an extension of family life.

 Second stage

• Private property emerged

• Led to the alienation of people from the forces of production
• Slavery became dominant institution
• Society was divided into two principal classes namely citizens and
slaves. (Ancient Greek and Roman times)
Third stage (Feudal system) – New class system - European Middle Ages

• Ruling class was the nobility - privileged to own large tracks of

land in the then new complicated system of land tenure
• The subjected class - the serfs-unfree laborer's legally tied to the
land.
Fourth stage: (The current world is here)

• A product of the rise of the capitalism

• The new ruling class the owners of capital also called the bourgeoise
• A very powerful position as they privately owned the means of production.
• These ensured that the process of production was based upon their exploitation of “free” labour
• Labour now separated from the control of means of production
• A capitalist mode of production ensuring that:
• Producers have no rights over the means of production
• Producers have no right over the disposal of their product
• Producers are mere labourers free to sell their labour on the open market
• Capital accumulates in the hands of the capitalists: How?
• Seizure of surplus value from labour
• Reinvestment of surplus value as capital
• Restarts the cycle enabling them to appropriate further surplus value from labour.
• Commodity Price – (wages + cost of raw materials) = Surplus value (Profit).
Karl Marx argued that from this stage the following will happen:

• The need for capital accumulation would ultimately lead to a fatal contradiction
• In Capitalism the rate of profit has a tendency of falling.
 
Therefore:
• The owners of the means of production continually increase the ratio of capital to
wages investing in machinery and technology rather than labour.
Versus
• Conditions leading to series of deepening economic crises, particularly over-production
 
• The practice/vice of paying insufficient wages being paid the workers to purchase the
commodities being produced will lead to capital concentrating in fewer/minority hands
while an increasing majority and impoverished proletariat/masses will become aware
of their situation.
WHAT THEN HAPPENS NEXT?

= REVOLTS SPARK UP!

WHY AND HOW?

Class consciousness/awareness grows

• New and emerging political organizations become visible
• Leadership opposed to capitalism emerges
• Revolt against the practice/system and overthrow the entire
capitalist system.
 WHAT FOLLOWS?

• SOCIALISM comes in
• control of the proletariat/masses /the workers/the poor/exploited
will be established
• Means of production nationalized and not privately owned.
• The state is run in the interest of the masses/poor/proletariat
• Socialism will not last also.
WHAT THEN WILL COME NEXT?

• COMMUNISM

• Social classes will wither away

• Re-establishment of people’s natural relationship with the forces of
production
• End of alienation