The dependency theory it is based on the center-periphery model, which establishes that the poverty of certain countries (the peripheral ones) is due to a historical position of disadvantage in front of the most powerful countries (those of the center), so that the second ones were enriched at the expense of the firsts.

During the 50s and 60s, several Latin American social scientists and intellectuals developed a theory to respond to the underdevelopment suffered by their territory.

Uncle Sam teaching children from the Philippines, Puerto Rico, Hawaii and Cuba.

Background

Social Darwinism and colonialism

The first symptoms of the center-periphery model in the subcontinent occurred in the mid-nineteenth century with the creation of the Nation States, through the so-called Social Darwinism .

This movement caused them to be promoted in Latin America the models of modernization implanted in Europe, totally colonial and slave owners.

However, the socio-cultural results in this territory were defective, giving rise to a partial and underdeveloped modernity throughout the subcontinent.

The great Depression

In October 1929, the fall of the Wall Street Stock Exchange, known as the crack of the 29, gave rise to the great crisis of capitalism of the 30s, which quickly spread to almost every country in the world. This period was called the Great Depression, and lasted until the years of the Second World War .

This great crisis caused a series of theories that questioned the classical functioning of the capitalist economy. This made Latin American countries begin to raise ideas of a more Marxist nature, advocating greater State intervention in the economy.

ECLAC and dependency theory

After the Second World War, the United Nations created a series of economic commissions in order to boost the growth and development of less developed countries. One of them was the Economic Commission for Latin America and the Caribbean (ECLAC), created in 1948.

ECLAC, located in Santiago de Chile, began to develop strategies following the classical theory of development. However, some member economists and sociologists began to notice how Latin America had socio-economic circumstances that hindered its development.

It was in 1949 when the Argentine Raúl Prebisch (member of ECLAC) and the German Hans Singer published two documents that gave rise to what would be called the theory of dependence.

In them, the authors began by observing the existence of central and peripheral countries, where the former receive raw materials (primary goods) from the latter in order to produce secondary goods.

This situation, they say, favors the countries of the center, which take greater benefits; and it disadvantages those in the periphery, who have much lower returns and worse business conditions (Cypher & Dietz, 2009).

ECLAC itself served as the headquarters of the theory, since it had the most recognized Latin American intellectuals of the time. The most important of the project besides Prebisch were the Brazilians Theotonio Dos Santos, Ruy Mauro Marini and Celso Furtado, and the German André Gunder Frank.

Basic assumptions of the theory

In its most extreme form, the dependency theory has marked Marxist roots. He sees the world from the perspective of globalization as a form of exploitation of certain countries over others, rich against poor.

In addition, it defends a look towards"within"to achieve development: a greater performance of the State in the economy, greater barriers to trade and the nationalization of key industries.

The premises on which the dependency theory is based are the following (Blomström & Ente, 1990):

1. There is an inequality in power relations, which is decisive in the deterioration of commercial conditions and consequently maintenance of the dependency status of peripheral countries.
2. The peripheral nations provide the central nations with raw materials, cheap labor, and in return receive obsolete technology. The central countries need this system in order to maintain the level of development and well-being that they enjoy.
3. The central countries are interested in perpetuating the state of dependency, not only for economic reasons, but also political, media, educational, cultural, sports and any other area related to development.
4. The central countries are willing to suppress any attempt by the peripheral countries to change this system, either through economic sanctions or by force.

Raúl Prebisch

Raúl Prebisch was an Argentine economist a member of ECLAC, known above all for his contributions to the so-called economic structuralism and his Prebsich-Singer thesis, which gave rise to the theory of dependency.

Prebisch argued that there was a tendency to worsen commercial conditions in the relations between the powerful countries (center) and the weak (periphery), benefiting the former and disadvantaging the latter.

According to him, the way for these weak countries to develop successfully was through industrialization and economic cooperation among the countries of the same peripheral group (Dosman, 2008).

In this way, and partly thanks to his role as executive secretary of ECLAC, in the 50s and 60s, reforms were carried out focused mainly on Industrialization by Import Substitution (ISI) (ECLAC, s.f.).

André Gunder Frank

André Gunder Frank was a German-American economist, historian and sociologist of neo-Marxist ideology. Very influenced by the Cuban revolution, in the 60s he leads the most radical branch of the theory, joining Dos Santos and Marini, and in opposition to the more"developmentalist"ideas of other members such as Prebisch or Furtado.

Frank argued that the existence of dependency relations among countries in the world economy were a reflection of the structural relationships within countries and communities themselves (Frank, 1967).

He argued that in general, poverty is a result of the social structure, the exploitation of labor, the concentration of income and the labor market of each country.

The decline of dependency theory

In 1973, Chile suffered a coup that resulted in a breakdown of ECLAC thinking, which caused the project to lose influence over time.

Finally, with the fall of the Soviet Bloc in the 1990s, the"dependentista"intellectuals who were still alive (Prebisch died in 1986) took different paths.

Some more radicals, such as Dos Santos, worked on the elaboration of anti-globalization theories, others, like Marini, were dedicated to the academic field, and others, like Frank and Furtado, continued to work on world economic policy.

References

1. Blomström, M., & Ente, B. (1990). The theory of development in transition. Mexico City: Economic Culture Fund.
2. ECLAC. (s.f.). www.cepal.org . Retrieved from https://www.cepal.org/es/historia-de-la-cepal
3. Cypher, J. M., & Dietz, J. L. (2009). The process of economic development. London & New York: Routledge.
4. Dosman, E. J. (2008). The Life and Times of Raul Prebisch, 1901-1986. Montreal: McGill-Queen's University Press. pp. 396-397.
5. Frank, A. G. (1967). Capitalism and underdevelopment in Latin America. New York: Monthly Review Press. Retrieved from Clacso.org.