Latin America World Systems Theory

The period after World War II marked the epoch when the age of colonialism finally crashed, as one national liberation movement after another in Asia and Africa won legal independence (from Asian nations such as India in 1947, China in 1949, and Vietnam in 1974 to African countries such as Egypt in 1951, Ghana in 1957, Nigeria in 1960, Guinea-Bisseau in 1974, and Angola in 1975, among many others). Above all, there was also the historic defeat of U.S.-enforced neocolonialism in Latin America by the Cuban Revolution of 1 January 1959—an event that had a tremendous impact on the entire hemisphere at a time when corporate capitalism reigned almost unchallenged in the Americas.

But as Western modernization replaced Western colonialism in former colonies, scholars and activists alike realized that the struggle was far from over, as it became increasingly apparent throughout the "Third World" (as it came to be called in the late 1950s and early 1960s) that Western modernization meant one thing to Western countries and quite another to non-Western countries. One and the same economic project, in the act of producing "modern nations" around the globe, generated unprecedented wealth for the West and abject poverty for the majority of citizens in non-Western countries.

World systems theory was developed by scholars on the left in response to the failures of modernization theory, which had predicted growing prosperity and development in the Third World, rather than the immiserization that befell so many new nations. Few could disagree on the facts about the stark inequalities that divided the former colonial powers from their former colonies, given the grim statistics on such social indicators as infant mortality, average life span, access to health care, and level of literacy. But explanations diverged sharply. Western apologists for mainstream modernization theory, such as W. W. Rostow in The Stages of Economic Growth: A Non-Communist Manifesto (1960), made a straightforward threefold argument about the "universal" superiority of capitalist modernization. First, they maintained that the main countries comprising the West had modern economies, while most other nations simply had traditional economies characterized by low levels of industrialization, a small middle class, and hardly any advanced technology. Second, they argued that Western nations had a citizenry who possessed a modern psychology and modern cultures, which together were linked to an understanding of the need for hard work, a habit of punctuality, and a commitment to save money for investment. Conversely, the citizens of non-Western nations supposedly lacked this modern attitude and worldview to varying degrees and their economies suffered accordingly. Third, the Western apologist contended that the countries in the West were governed by modern institutions, such as parliamentary democracy, a multiparty system, an independent judiciary, and excellent public education systems. On the other hand, the "traditional societies" from outside the West were governed instead by "premodern" institutions, often with dictatorial leaders or paternalistic regimes, and no real commitment to public literacy. So, the answer, the modernization theorists maintained, was simple: the rest of the world should learn to behave like the West and to adapt its system of corporate capitalism.

By the late 1950s and early 1960s, however, something else was becoming clear, namely, the precise opposite of what modernization theorists had predicted was in fact occurring. Moreover, this development process often happened in ways that were devastating for the majority of the populations in every Latin American nation, whether it was more or less "modern." As Western capital modernized Latin American economies—from the copper mines of Chile, the oil fields of Venezuela, and the agribusinesses of Central America to the bauxite production of Jamaica—they became more contradictory and imbalanced on the national level to the degree that they were modernized by the West. Far from creating a large middle class, for example, corporate capitalism did exactly the opposite. Moreover, it soon became well documented that U.S. multinational corporations in fact preferred to do business with repressive military dictatorships and other premodern, as well as antidemocratic, political formations, in order to support a modernization that generated huge profits for the West, even as it led to very modest infrastructural gains for the host nation. In addition, it was not lost on the popular classes themselves that modernization theory was inaccurate on another count as well, that is, the relation of hard work and high productivity to remuneration. In Latin America, the members of the labor force who worked hardest within corporate capitalism were paid the least.

At this point, the issue simply was no longer one of explaining social injustice as a consequence of European-American–based modernization—these injustices had become patently, even painfully, clear to the Third World intelligentsia and progressive intellectuals in the West—but rather one of disclosing why and how the two phenomena, social injustice and capitalist modernization, were deeply interrelated. Were they incidentally connected through the misapplication of capitalist modernization by corrupt local leaders? Or were they linked through the coercive designs of imperial political policies emanating squarely from the West?

To an increasing number of critics, neither of these types of explanation were sufficient, since they did not begin with a structural economic analysis of what Karl Marx, almost a century earlier, had named the "uneven development" of modern capitalism. What was needed was a theory that began, not with individual examples of corruption or inefficiency, but with the inherent structural logic of corporate capitalism that, based as it is on an unequal "international division of labor," is unfairly organized by its very nature at the site of production, not just as a result of distribution. In an outpouring of intellectual energy beginning in the late 1950s, a new cohort of intellectuals, many from Third World countries themselves, began to develop such a theory.