Dependency Theory

[BobKKKindle$]

How should Marxists approach the school of dependency theory? Dependency theory is a school of development analysis which argues that the lack of industrial development in the third world is not the result of internal obstacles to development, such as corruption of political officials, or a set of cultural values which does not support capital accumulation (as argued by the modernization school) but the position of these countries in a world system which relegates the third world to dependency on advanced states. This condition of dependency was initially established by colonial conquest, and exists mainly in the form of dependency on the extraction of primary goods and materials, which attain a low value on the global marketplace (relative to the price of imported manufactured goods, which are produced in the economic core) and are also susceptible to sudden fluctuations in market price due to the effects of speculation and, in the case of agricultural goods, the long time interval between planting and the point at which the goods become ready for sale. There is, according to this theory, a constant flow of wealth away from the periphery (where the physical production of most goods takes place, although the periphery accounts for only a small share of global consumption) towards the economic core, by means of exploitative relationships and institutions such as the debt burden and the transfer of profits.

Lenin anticipated dependency analysis in Imperialism, as he explained that even when a country is not a formal colony, it may still exist in a colonial relationship and so is not fully independent.


Since we are speaking of colonial policy in the epoch of capitalist imperialism, it must be observed that finance capital and its foreign policy, which is the struggle of the great powers for the economic and political division of the world, give rise to a number of transitional forms of state dependence. Not only are the two main groups of countries, those owning colonies, and the colonies themselves, but also the diverse forms of dependent countries which, politically, are formally independent, but in fact, are enmeshed in the net of financial and diplomatic dependence, typical of this epoch. We have already referred to one form of dependence—the semi-colony. An example of another is provided by Argentina.

Imperialism, Division of the World Among the Great Powers (http://www.marxists.org/archive/lenin/works/1916/imp-hsc/ch06.htm)

There are important parallels which can be made between dependency theory and the theory of permanent revolution, if industrial development is seen as part of the bourgeoisie's historic tasks. The third-world bourgeoisie derives income mainly from the revenue of primary materials, and so is closely tied to the foreign firms which manage and develop the extraction of these resources, such that the third-world bourgeoisie has an objective interest in protecting the ability of firms to operate freely in the economic periphery, despite the negative impacts of corporate penetration on the development process. This means that the proletariat cannot rely on the bourgeoisie to develop an industrial base and establish the material prerequisites of socialism, but must act independently and take control of foreign property and break the condition of dependency.

The synthesis of dependency theory of permanant revolution is something I have been thinking but I have not yet developed a coherent analysis, if anyone has something to add in this regard or knows of any attempts to develop a similar synthesis, I would be grateful.

[bretty]

I would say that it shares a lot of fundamental views with Marxist thought on colonialism, the flow of wealth on a global scale, etc.. On Wikipedia it says Andre Gunder Frank rejected Marx's concept of stages of history and economic history. I think many Marxists wouldn't dare label countries core's and peripheries and accept his theory either. When I studied it, it seemed very reductionists and Marxist thought is quite the opposite.

I would certainly agree with most of it, however I don't think many dependency theorists would argue there is corruption in other countries but that it was also seemingly caused by semi-colonialism and neoliberal tactics.

Further the argument on cultural values being the problem is a longstanding capitalist notion that certain cultures have standards of laziness that European cultures never developed. I think most if not all Marxists would agree with the dependency theorists in opposition to this.

[MarxSchmarx]

This condition of dependency was initially established by colonial conquest, and exists mainly in the form of dependency on the extraction of primary goods and materials, which attain a low value on the global marketplace (relative to the price of imported manufactured goods, which are produced in the economic core) and are also susceptible to sudden fluctuations in market price due to the effects of speculation and, in the case of agricultural goods, the long time interval between planting and the point at which the goods become ready for sale. There is, according to this theory, a constant flow of wealth away from the periphery (where the physical production of most goods takes place, although the periphery accounts for only a small share of global consumption) towards the economic core, by means of exploitative relationships and institutions such as the debt burden and the transfer of profits.

Yup. The problem is the dependency of the "3rd world" on manufactured goods and markets in the first world in order to sustain their economies. The exploitation comes from the fact that the 1st world can insist it is a fair exchange to trade capital goods (say, chain saws) for raw materials (say, trees). The 3rd world's economy cannot exist w/out the first world, creating a condition of dependency. If the 3rd world were to invest in producing its own chain saws, even though it were less efficient at it, the argument goes that this will help the 3rd world in the long run by developing an internal market and industrial base. Only then can we sensibly speak of a "local (does anyone else find this extremely perjorative???:laugh:) bourgeosie."


How should Marxists approach the school of dependency theory?

Frankly it is the rule of the local bourgeoisie instead of a foreign bourgeoisie. I disagree with (paraphrased) Lenin that:


This means that the proletariat cannot rely on the bourgeoisie to develop an industrial base and establish the material prerequisites of socialism, but must act independently and take control of foreign property and break the condition of dependency.

is just not so. Development of a local bourgeoisie (for whom capital investment is a goal in itself) is in fact a pre-requesite to developing this industrial base. The US, Canada and the capitalist states of East Asia show that the cycle of dependency is broken by cultivating a local industrial class. The problem is confusing the local mucky mucks (e.g. plantation owners in the states) with the bourgeosie. Under Lenin's analysis,the southern plantation owners would be analogous to the local bourgeosie, which they were clearly not.