Latin America World Systems Theory
Precursors To World Systems Theory
In developing his theory, Wallerstein built upon the nineteenth-century critiques by Marx of capitalism's structural contradictions and those by the subsequent school of dependency theory that first emerged in the 1950s and 1960s throughout the Americas about the "development of underdevelopment." The latter school of thought, devoted to analyzing the structural logic of monopoly capitalism, was put forth first by such scholars as Paul Baran, Harry Magdoff, and Paul Sweezy of Monthly Review, then developed in interrelated books throughout Latin America by Fernando Henrique Cardoso, Theotonio dos Santos, Jaime Wheelock Román, Fidel Castro, and Orlando Núñez Soto, among several others. World systems theory also owes an intellectual and political debt to the anticolonial critiques from the Caribbean of C. L. R. James or Frantz Fanon; the celebrated Annales school of material history from France exemplified by Fernand Braudel, Marc Bloch, or Georges Duby; and the radical historical analysis in England of Christopher Hill, E. P. Thompson, or E. J. Hobsbawm.
In 1952, Frantz Fanon of the Caribbean island of Martinique launched a stirring anticolonial analysis of the ideologically charged ethnocentrism hidden behind European efforts at "modernization" in Africa, entitled Peau noire, masques blancs (Black Skin, White Masks, 1967). (This work was also very much in the tradition of C. L. R. James's sui generis anticolonial study The Black Jacobins  about revolutionary movements in Haiti and the Dominican Republic.)
Development of underdevelopment.
In 1957, Paul Baran published a watershed study entitled The Political Economy of Growth, which became one of the most popular books about political economy in the history of Latin America. (A Spanish edition of this study had gone through more than twenty different editions, since being published by the National Autonomous University of Mexico.) In it, Baran demonstrated how Western development via modernization unavoidably produced underdevelopment in Latin America, and that it was necessarily based on "uneven development" owing to its peculiar structural logic. Indeed, without major structural adjustments, Western modernization would continually lead to the development of underdevelopment in Latin America and the Third World. Far from being the solution to poverty in Latin America, Western modernization was a primary cause of it. As the formative "core" of a hemispheric system, capital in the United States (and Europe) would thus continue to siphon crucial resources from "peripheral" Latin American countries through hyper-profits generated by the international division of labor.
Latin American dependency theorists.
Baran's book helped to galvanize the position of an entire generation of Latin American intellectuals. They answered the call to document his abstract claims about the deforming effects of Western modernization for the Americas through concrete studies of specific instances of the effects of corporate capitalism, with a series of studies that were extensive, provocative, and often brilliant. One particularly well-known example is Brazilian scholar Fernando Henrique Cardoso's (with Enzo Faletto) Dependencia y desarrollo en América Latina (1969). The context of its publication reveals the increasingly fierce battle between left and right that shaped twentieth-century Latin American politics: it was authored in Chile (on the eve of the Salvadore Allende years) where Cardoso was then in exile, because of a U.S.-backed military coup in Brazil during 1964. The latter opened the way to what Western capital would celebrate as an "economic miracle" (an annual growth rate of 10% for a decade). Yet, as one Brazilian leader of the period admitted: "In my country, the economy is doing fine, but the people aren't."
Cardoso's study, based on what he terms an "análisis global" (global analysis), provides a structural analysis of this contradictory process. In 1950 there were at least five large nations from Latin America that, according to the standards of modernization theory, were virtually guaranteed success as modern nations who would be major players on the world economic stage: Argentina, Brazil, Chile, Columbia, and Mexico. Each of them possessed the following: (1) sufficient internal markets to propel growth; (2) a formidable industrial base; (3) abundant reserves of raw materials; (4) powerful stimuli to grow nationally; and (5) satisfactory formations of domestic capital. Yet despite their enormous structural promise and hardworking labor forces, these five countries ended up being trapped by the West in a type of desarrollo dependiente (dependent development) that caused a profound depression of the living standards and welfare of the vast majority of their citizenry. The result was a disadvantageous interdependency with a Western-led modernization that did not make them modern nations by the standards of the West, even as the West itself profited handsomely from this foreign labor force and the region's raw materials.
An even more extreme case of underdevelopment as a consequence of Western modernization occurred in the seven largely rural countries of Central America, which were far less prepared to succeed in the world system than were the five Latin American nations singled out by Cardoso. Few have encapsulated better in a short aphorism than did Nicaraguan author Sergio Ramírez, how the economy of a Third World region is deformed by capitalist-based underdevelopment simply to serve the consumer patterns of the West. As Ramírez noted, people in Central America figured out fairly soon what their assigned role in the world system would be: cheap desserts for the West, such as coffee, sugar, and fruit. It was another Nicaraguan intellectual and guerrilla leader, Jaime Wheelock Román, who documented extensively and explicated deftly the historical process whereby Central America's fate would be determined by the international division of labor of corporate capitalism. The latter set of relationships rigidly presupposes the preparation of raw materials on the periphery of the world system and the production of finished industrial goods primarily in the core area. Written in the 1970s, Román's Nicaragua: Imperialismo y Dictadura was an underground classic during the insurrection against Nicaragua's de facto leader Antonio Somoza Debayle and a guiding text for revolutionary policies by the Sandinistas after their victory over Somoza in 1979.
Even more so than Cardoso, Wheelock Román's book exemplifies the increasingly high stakes in which Latin American dependency and world systems theorists worked as an underground labor leader during a period of intense political depression. Despite these dangers, he produced one of the most important books on dependency theory ever to come out of Central America. Román carefully traces how the Nicaraguan economía agroexportadora based on coffee (and to a lesser extent on bananas, sugar, and cotton) was set up to provide cheap goods for the West, and produced low prices for European-American consumers through the systematic maltreatment of underfed, underpaid, and terrorized workers denied basic human rights. Moreover, the unquestioned accompaniment to this success story of corporate capitalism and its modernization project in Nicaragua was the brutal, U.S.-backed dictatorship of the Somoza family (r. 1934–1979), two of whose members even graduated from West Point. This regime insured that labor discontent in Nicaragua would not be allowed to upset the project of modernization in Central America.
The author whose career epitomizes the mix of politics and scholarship that characterized Caribbean dependency theory is Fidel Castro, who produced a monumental tour de force of dependency theory, The World Economic and Social Crisis, together with two teams of researchers at the University of Havana. This analytical report, presented in 1983 by Cuban president Castro to the Seventh Summit Conference of Non-Aligned Countries, compiled evidence from a massive number of nonpartisan scholarly sources to document a world division of labor that is structurally enforced at every stage of development by the forces of corporate capital and the Western militaries that back them. Criticizing the claim by modernization theorists that Third World countries were gradually industrializing and could someday rise to the level of the industrialized West, Castro and his coauthors emphasized that "in spite of some affirmations to the effect that world industry is producing a so-called restructuring … the really impressive thing is that 69.2% of the world's industrial work force is found in the Third World and it generates less than 9% of the world industrial production" (p. 127).
This global division of labor was the main target of Castro's critique: his book calls for a rejection of the effort to "divide the world into an industrialized area with advanced technology and a primary-commodity-producing area" (p. 67). As examples, he pointed to mining, where "the underdeveloped countries contribute 25.6% of the mining of metals, they produce only 4.1% of the metal manufacture in the world" (p. 123), and textiles, where the manufacture of yarn—"high-labor and low capital intensive" in the Third World increased from "19% in 1950 to almost 40%," while weaving "which is more capital-intensive and require high automation and concentration, is still controlled by developed countries, and based there" (p. 67). Textiles were then returned back to the Third World to be made into garments, because this industry still demands a high degree of hand labor. But critically, the most important phase of all—the manufacturing and sale of textile machinery—"requires advanced technology and a complex design, on which the future of the entire sector largely reveals the power relationship in the textile sector." Third World industries produced less than 5 percent of such machinery, and saw few possibilities for increasing their share. It is from this control of the making of machinery, according to Castro and other dependency theorists, that the so-called captive trade system arises, turning international trade into a caricature of itself (pp. 67–68).
It is this control of the machines that make all other machines, that is, the export of machines, but not the technology that reproduces these machines, that is the guiding thread of all Western modernization policy. This is a key locus of power and a primary way of maintaining Western hegemony in the world system.
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