166 NONCONVENTIONAL, CRITICAL THEORIES
others in the long term by setting the ideals that people strive for rather
than controlling bodies through violent intimidation. Control the way
people think—control their economic, political, and cultural objectives—
and there is no need for direct control over people physically. The aim of
U.S. neoimperialism is to control global space by conquering the politi-
cal and economic imaginaries of the world’s peoples . . . by having them
“share the American dream.” Neoimperialism takes the form of the
expansion of American ideals like freedom, democracy, equality of oppor-
tunity, and consumption. American neoimperialism means spreading cer-
tain consumption habits, lifestyle patterns, media orientations, electoral
ambitions, and all the “good” things that people everywhere have already
shown that they urgently and deeply want! Neoimperialism is cast as the
latest act in a continuing drama of global human liberation (Peet 2007).
DEPENDENCY THEORY
Marxism forms the philosophical and theoretical basis for a variety of
neo-Marxist theories that combine historical materialism with other crit-
ical traditions in thought. Examples include dependency and world sys-
tems theories most obviously but also neostructural notions like regula-
tion theory, which is covered in the following section. The basic message
of the dependency school draws on a theme that has run through this
entire chapter, namely, that European and U.S. development was predi-
cated on the active underdevelopment of the non-European world, that
is, making it less developed than it had been. For dependency theorists,
Europe’s development was based on external destruction rather than
internal innovation—brutal conquest, colonial control, and stripping
non-Western societies of their people, resources, and surpluses rather
than singlemindedly undertaking the rational modernization of Europe
(Galeano 1973). Indeed, dependency theory prefigures poststructural-
ism (covered in Chapter 6) in that it brings into question the nature of
European “rationality” in committing these atrocities? From just such
historical processes as these came a new global geography: a European
First World “center” and non-European Third World “peripheries.”
The relationship between center and periphery assumed, for the Brazil-
ian geographer Teontonio Dos Santos (1970), the spatial form of depen-
dence, in which some countries (the dominant) achieved self-sustaining
economic growth while others (the dominated and dependent) grew only
as a reflection of changes in the dominant countries:
[Dependency is] . . . an historical condition which shapes a certain
structure of the world economy such that it favors some countries to
Marxism, Socialism, and Development 167
the detriment of others and limits the development possibilities of the
subordinate economies . . . a situation in which the economy of a cer-
tain group of countries is conditioned by the development and expan-
sion of another economy, to which their own is subjected. (Dos Santos
1970: 226)
The incorporation of Latin America into the capitalist world econ-
omy, directly through (Spanish and Portuguese) colonial administration
but more subtly through trade, asserted Dos Santos, geared the region’s
economies toward meeting demands from the center rather than the
needs of Latin America’s people themselves, even when the main eco-
nomic activities in the regional economy were locally controlled. Depen-
dence skewed the region’s social structure toward a small, enormously
rich, elite and a mass of poor peasants. Regional power was held by
this “comprador” (collaborating, intermediary) ruling class. In terms of
development, the gains made from exporting products sent to the center
were used for luxurious consumption by the elite rather than for domes-
tic investment. But real power was exercised from external centers of
command in the dominant (“metropolitan”) countries. Dos Santos con-
cludes that dependence continues into the present through international
ownership of the region’s most dynamic sectors, multinational corporate
control over technology, and huge payments of royalties, interest, and
profits to corporations headquartered in New York and London.
The basic impetus behind this dependency theory derives from two
main sources. In the United States a school of neo-Marxist thought cen-
tered on the socialist journal Monthly Review developed a theory of
“monopoly capitalism,” referring to the dominant form of social orga-
nization of the 20th century. Beginning in the late 19th century, this
school of thought argues, large corporations increasingly took over, or
outcompeted, small companies. The resulting monopolization restricted
competition, and corporations accumulated large surpluses from the
attendant excess profits, with the consequence that capitalist economies
tended toward underconsumption and economic stagnation—as was
true with the theories of imperialism mentioned earlier. Economic cri-
ses were avoided within the capitalist countries by stimulating individual
consumption through advertising, while collective consumption (con-
sumption by the society as a whole) grew through the expansion of the
military–industrial complex. In the Third World, stagnation was more
typical than growth. Since, in these countries, typically the bourgeoisie
was “parasitic” (that is, living off and harming the workers and peas-
ants), the ultimate solution was to break with capitalist imperialism. Paul
Baran (1910–1964) and Paul Sweezy (1910–2004), leading lights of the
Monthly Review school, found dependency to be an irrational kind of
168 NONCONVENTIONAL, CRITICAL THEORIES
development (Baran and Sweezy 1966). Genuine development could be
achieved in Third World countries, they maintained, only by withdraw-
ing from the world capitalist system and reconstructing economy and
society on a socialist basis, as Cuba and China were doing at the time.
The second main source for the dependency school was critical radi-
cal economic thinking in Latin America. The ideas of the United Nations
Economic Commission for Latin America and Raul Prebisch (discussed
in Chapter 3) were criticized by the Latin American left, in that the for-
mer ignored class relations. The kind of state intervention in the economy
proposed by Prebisch and the ECLA, involving the protection of infant
industries via tariff remedies, could end up subsidizing the profits of the
local bourgeoisie, with consumers paying vastly higher prices for the sub-
sidized commodities (at one time the tariff on refrigerators imported into
Mexico was 800%!). A more radical dependentista (dependency) posi-
tion was pieced together by such writers as Osvaldo Sunkel (1972), Celso
Furtado (1963), Fernando Cardoso and Enzo Falleto (1979), and Teon-
tonio Dos Santos (1970) and was popularized in the English-speaking
world through the writings of Andre Gunder Frank.
Andre Gunder Frank (1925–2005) was a leading critic of (conven-
tional) development economics and modernization theory. His perspec-
tive entailed a criticism of the “dual society” thesis, which stated that
underdeveloped societies had a dual structure of modern and traditional
sectors, each with its own characteristics and dynamic. “Underdevelop-
ment,” Frank wrote, “is not due to the survival of archaic institutions
and the existence of capital shortage in regions that have remained iso-
lated from the stream of world history. On the contrary, underdevelop-
ment was and still is generated by the very same historical process which
also generated economic development: the development of capitalism
itself” (Frank 1966: 18). In this view the development of the states at the
center of the capitalist world economy had the effect of underdevelop-
ing the states of the periphery. For Frank, attributing underdevelopment
to lingering traditionalism rather than the advance of capitalism was a
historical and political mistake. Rather, world capitalism destroyed or
transformed earlier social systems even as it came into existence, convert-
ing them into sources of its own further development (Frank 1969a).
For Frank, the economic, political, social, and cultural institutions of
the underdeveloped countries resulted from the penetration of capitalism
rather than being original or traditional.
Frank focused on the metropole–satellite (or center–periphery)
relations he found typical of Latin America. The underdevelopment of
peripheral capitalist regions and people, he said, was characterized by
three contradictions: the contradiction of the monopolistic expropria-
tion of economic surplus; the contradiction of metropole–satellite polar-
Marxism, Socialism, and Development 169
ization; and the contradiction of continuity in change. Frank drew on
Marxist analyses of the class expropriation of surplus value, especially
Paul Baran’s (1960) version, that emphasized the potential surplus (accu-
mulable surplus value) that could be produced if excess consumption by
the middle and upper layers of society were eliminated and unproduc-
tive workers and the unemployed were put to work. Frank argued that
external monopoly resulted in the foreign expropriation, and thus local
unavailability, of a significant part of even the actual economic surplus
produced in Latin America. So, the region was actively underdeveloped
(made less developed) by not producing at its potential and losing its
surplus (source of investment capital, in Marxist theory) to Europe and
North America. Using a case study of Chile, Frank described the pattern
of surplus movement as a massive spatial expropriation system reaching
into the most remote corners of the region:
The monopoly capitalist structure and the surplus expropriation/
appropriation contradiction run through the entire Chilean economy,
past and present. Indeed, it is this exploitative relation which in chain-
like fashion extends the link between the capitalist world and national
metropolises to the regional centers (part of whose surplus they appro-
priate), and from these to local centers, and so on to large landowners
or merchants who expropriate surplus from small peasants or tenants,
and sometimes even from these latter to landless laborers exploited by
them in turn. At each step along the way, the relatively few capital-
ists above exercise monopoly power over the many below, expropriat-
ing some or all of their economic surplus. . . . Thus at each point, the
international, national, and local capitalist system generates economic
development for the few and underdevelopment for the many. (Frank
1969b: 7–8)
This idea of a chain of surplus transfer over space was further developed
in Frank’s second contradiction, whereby center and periphery become
increasingly polarized as capitalism developed the one and underdevel-
oped the other in a single historical process. In this perspective, only a
weaker, or lesser, degree of metropole–satellite relations allowed for the
possibility of surplus retention and local development. These two contra-
dictions suggested a third to Frank, namely, the continuity and ubiquity
of structural underdevelopment throughout the expansion of the capital-
ist system—that is, surplus was continually extracted from the peripheral
countries, in ever new forms, from the first days of the global capitalist
system to the present day.
From this perspective, the “development of underdevelopment,”
Frank generated several more specific hypotheses that could be used in
170 NONCONVENTIONAL, CRITICAL THEORIES
guiding development policy. In contrast to the world metropolis, which
was satellite to no other region, the development of national and regional
metropolises was limited by their dependent status—for example, local
metropoles, such as Sao Paulo, Brazil, or Buenos Aires, Argentina, could
only achieve a dependent form of industrialization. Real development
meant separating from the global capitalist system in a more autonomous
economy. Similarly, in a hypothesis directly opposed to the finding of
modernization geography that development was spread through contract
with the metropolis, Frank hypothesized that the satellites experienced
their greatest development when ties to the metropolis were weakest—
historically during wars, geographically in terms of spatial isolation. In
fact, for Frank, development could occur only when the links with global
capitalism had been broken. By extension, regions that had the closest
ties to the metropole in the past were the most underdeveloped in the
present—Frank found this confirmed by what he called the “ultra-under-
development” of the sugar-exporting region of northeastern Brazil and
the mining regions of Bolivia. In summary, underdevelopment in Frank’s
theory was not an original condition of Third World societies. Nor did
it result from archaic institutions surviving in isolated regions. Nor even
did it stem from Third World irrationalism. Instead, underdevelopment
was generated by the development of the center. In particular, underde-
velopment in the periphery resulted from the loss of surplus expropriated
for investment in the center’s development (Frank 1969b, 1979). Frank’s
analysis, together with other work emanating from the Third World, con-
stituting what came to be known as dependency theory, pointed to the
need for social revolution in countries experiencing the development of
underdevelopment. His article on “The Development of Underdevelop-
ment” published in the Monthly Review was seen by the U.S. government
as constituting a security threat, and he was sent a letter from the U.S.
Attorney General telling him that he would not be allowed reentry into
the United States (Editors of Monthly Review 2005).
An immediately noticeable weakness in Frank’s theory resided in its
failure to specify the exact economic mechanisms of surplus extraction.
In some cases the mechanisms of surplus extraction are obvious—for
example, European, North American, or Japanese corporations owning
land and factories in Latin American countries could withdraw surplus
as rent or profits, or banks in New York or IFIs in Washington lend-
ing capital to peripheral states could withdraw surplus as interest. But
what of peasant producers owning their own land and producing cash
crops for export to center markets? Here the beginning of an answer was
provided by Arghiri Emmanuel (1972; see also deJanvry 1981) in the
“theory of unequal exchange.” Like the ECLA economists, Emmanuel
argued against classical (Ricardian) trade theory, which claimed that the
Marxism, Socialism, and Development 171
international division of labor and the comparative advantage system
of trade brought advantages to all participants (see Chapter 2). Specifi-
cally, Emmanuel argued that trade made poor countries poorer and rich
countries richer. Emmanuel assumed the perfect international mobility
of capital but also the immobility of labor between countries—hence,
wage rates persistently differed greatly among regions. Peripheral coun-
tries exported agricultural products, embodying large quantities of cheap
rural labor, and imported industrial products, embodying small amounts
of expensive urban labor. This led the terms of trade to favor the higher-
cost products of the center while devaluing the lower-cost exports of the
periphery. Peripheral countries were prevented from achieving devel-
opment because they sold their goods at prices below their values (the
socially necessary labor embodied in the products), while rich coun-
tries sold goods at prices above their values. For Emmanuel, unequal
exchange (through trade) was a hidden mechanism of surplus extraction
and a major cause of the economic stagnation in the periphery. Samir
Amin (1976: 143–144) estimated the amount of surplus transferred from
poor to rich countries via unequal exchange to be 1.5% of the product
of the rich countries but 15% of the product of the poor countries, an
amount he found “sufficient to account for the blocking of the growth
of the periphery.” From the perspective of the dependency theorists, the
peripheral countries have borrowed back their own surplus from the rich
countries to finance “development schemes.” The geopolitical implica-
tions of this finding are significant, namely, that Third World countries
should be “forgiven” their debts because First World countries already
owe them the money. Or, pushing this conclusion further, it is the First
World countries that should be seeking forgiveness!
There were other, more serious, criticisms of Frank. The Brazilian
economist Fernando Cardoso (1982) found Frank’s notion of the devel-
opment of underdevelopment a neat play on words but not very helpful
in concrete terms. In Latin America, he maintained, multinational corpo-
rations invested in modern industrialization while supposedly traditional
sectors (agriculture, mining) operated in technically and organizationally
sophisticated ways, and both were parts of an advanced and yet depen-
dent capitalist development. However, he added, in countries like Argen-
tina, Brazil and Mexico spatial and sectoral dualism emerged, composed
of both advanced sectors tied to the international capitalist system and
backward sectors, characterized as “internal colonies.” Multinational
corporations were interested in at least some prosperity for dependent
countries because of the markets they provided. But the Latin Ameri-
can countries remained heavily dependent for technology on the United
States. In contrast to Frank’s universalism, Cardoso wanted to look at
specific situations in particular parts of the Third World where develop-
172 NONCONVENTIONAL, CRITICAL THEORIES
ment and dependence could be found in tandem. We might note that,
on becoming president of Brazil in 1995, Cardoso adopted a neoliberal
development posture that can be seen as an extension of his version of
dependency.
Dependency theory was holistic in that it attempted to place a
country into the larger (global) system. In its simple form, it stressed
the external causes of underdevelopment rather than causes internal to a
peripheral society. Emphasis was placed on economic rather than social
or cultural interactions. In Frank’s version the accent was on regions,
spaces, and flows (“circulation”) rather than class. For most theorists
dependency and underdevelopment were synonymous, although Car-
doso, for example, thought that at least dependent forms of capitalist
development could be achieved. Finally, dependency theory was politi-
cally radical, with most adherents proclaiming the need for some kind of
socialist revolution, although a purely nationalist politics (merely altering
a peripheral country’s relations with the world capitalist system) could
also emerge from the more spatial versions of the dependency perspec-
tive.
WORLD SYSTEMS THEORY
World systems theory has obvious affinities with the dependency school
in its interest in centers and peripheries. But it had antecedents too in a
theory of history named after Annales: Economies, Sociétiés, Civilisa-
tions, a journal founded in 1929 by French historians Lucian Febvre and
Marc Bloch. Dissatisfied with conventional history for being too isolated
and unrealistic, the Annales school wanted to remake the discipline. The
Annales historians used a comparative method, over long sweeps of time,
to examine differences and similarities between societies. The French
geographer Vidal de la Blache, who believed that the genre de vie (way
of life) mediated between people and nature, deciding which of nature’s
possibilities came to be realized (“environmental possibilism”), was an
ally of a school of historical thought that always had a strong geographic
component in its regional histories, geo-histories, and studies of trans-
portation. The main themes of the Annales school were social history,
especially of the material conditions of working people; structural factors
or relative constants; the long term as a common language for the social
sciences; and, while this was not a Marxist (mode of production) school
of thought, a concern with the relations among the economy, society,
and civilization. Ferdnand Braudel (1902–1985), the most famous of the
school’s second-generation scholars, was particularly interested in struc-
tural limitations on material and economic life, the great “slopes of his-
