Query on dependency.

Carlos Eduardo Rebello crebello at SPAMantares.com.br
Sun Oct 10 15:31:07 MDT 1999

Dear Sam: Your comments are very good, but they should not repeat the
problem of treating all UDCs as an undifferentiated mass. It must be
said that the core problem for US foreign policy in the immediate
aftermath of WWII wasn't the 3rd World as such - there was an
interregnum during the late 40s and the early 50s when it seemed that
European colonialism might reassert itself in Africa and S Asia, where
the US adopeted even the anti-colonialist, "3rd force" rethoric
described in Graham Greene's The Quiet American - but the specter of the
coming "communization" of Western Europe, that had to be averted by the
Marshall Plan. The starting-stone for the work of Prebisch and ECLA
[CEPAL, in Sp. andPort.] was exactly the absence of a Marshall Plan for
Latin America, which had been  receiving the slightest possible economic
attention from Washington in the beggining of the Cold War, except for
some political agreements of the most subservient kind, eg., the free
export of Brazilian radioactive minerals in exchange for decomissioned
ships, discarded armoured cars, etc., from the US military.

 This lack of interest was the focus of the early work of Prebisch, who
argued in 1949 that Latin America suffered from the transition of the
core of the imperialist systemn from an "open" economy -ie, a net
importer of raw materials and agricultural produce, namely Great Britain
- to a "closed" one, namely the US, who were at the time a net exporter
of most raw materials- including oil. This closed character of the US
economy generated a lack of interest in investment opprtunities for the
Lat.Am. economies.In the Keynesian terms used by Prebisch,there was a
weakening of international Effective Demand; the *Keynesian* basis for
ECLA's thought is something that must not be understated at all costs,
except in the Us academic, that tends to view Dependency theory only in
the framework of 3rd World marxism, insted of a case of  native
ruling-class Keynesian liberals frustated with their expectations of
American aid turning leftwards, as happened with Getulio Vargas in his
second government, when he began denoncing imperialism after being
cheated in his expectations of the Marshall plan for Lat.Am. Latin
America economies, therefore, suffered from what Prebisch called at the
time a "dollar shortage" that imposed the necessity of import
substitution industrializatiom. However, Prebisch always pointed that
imp.substitution industrialization in Latin America would of necessity
center around production of consumer goods for the Bourgeoisie and the
higher levels of the petty bourgeoisie - higher income consumers, in his
words - and that such industrialization would, after being achieved,
generate limited further opportunities of high-tech investment, the
higher income groups, preffering, to pocket their profits in such
industrial ventures for speculative purposes, instead of re-investing
them (they would have a high marginal propensity for liquidity, again in
Keynesian terms) and that such groups would be very averse to the risks
of any creative investment. Therfore, such industrialization would be
not only limited and self-defeating, but also would be labour-saving
(durable consumer goods being, by the very character of their production
methods, capital-intensive) and therefore would perpetuate the problems
of chronic underemployment in unprofitable petty production ventures
(street-vendors, familiar agriculture prodution for self-consumption or
as a part-time job, supplying personal services such as baby-sitting,
plumbing, repairinig, etc) with are the bane of Lat.Am. economies. That
is where the divide was drawn, early, between Cardoso and his more Left
critics in Brazil: Cardoso believed, against Prebisch and his Brazilian
follower Celso Furtado, that after a certain critical mass impoort
substitution would be capable of giving the Brazilian economy an
internal authonomous dynamic of investment that would meke it to break
free from long-term stagnation and chronic under-using of production
factors -ie he believed in the authonomous development of productive
forces as something inevitable and unpersonal- he was, like all
mechanicist Marxists, a "Collective Methodologist", slighthy interest in
individual actions.The Brazilian[Portuguese-born] economist Maria Da
Conceição Tavares replied - at the same time when Cardoso published his
*Dependency and Development in Latin America* - that such economic
development could happen as a kind of vegetative growth, but that it
would not necessarily crete a technological breakthrough and that it
could remain permanently socially regressive (see his *Beyond Stagnation
Theory* - jointly written, BTW, with the present Minister of Health for
the Cardoso government, José Serra - IN the collection *Da Substituição
de Importações ao Capitalismo Financeiro*, Rio de Janeiro, Zahar,
various reprints).

These are some precisions that I think necessary, but can expand on the
subject if you want.


Carlos Rebello

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