The Crisis of Developmentalism (1994) Ruy Mauro Marini. English Translation

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Translator’s Note.

Born in 1932 and part of an academic milieu that developed the Marxist theory of dependency (MTD) in the 1960s and beyond, Ruy Mauro Marini is well-known to most of Latin America. Marini began his academic career in 1962, at the University of Brasília, in the city which had become Brazil’s capital just two years earlier. There he met with Vânia Bambirra and Theotônio dos Santos, who were also influential figures in the development of MTD (and this translator highly recommends you read anything by them that is available in English).

In 1964, after the coup that installed a military junta in Brazil that would rule the country until 1985, he was arrested and tortured, and went into exile in Mexico in 1965. In 1971 he would joined the faculty at the Universidade do Chile until 1973, when Allende was deposed by a coup. Returning to Mexico, he established himself at the National Autonomous University of Mexico. Marini completed most of his major work in Mexico and this is one of the reasons he is not as well-known in his own country of Brazil, having written mostly in Spanish during his career and leaving the arduous work of translating everything to the revolutionaries that still see the relevance of his writings.

Thankfully, in recent years, there has been a wider spread of such writings and the MTD has been gaining popularity in Brazil and other countries. His influences can also be found in important contemporary works such as John Smith’s Imperialism in the Twenty-First Century: Globalization, Super-Exploitation, and Capitalism’s Final Crisis, where the author writes:

“Marini hinged his argument on a fundamental aspect of Marx’s exposition of the law of value, namely the relation between absolute surplus-value and relative surplus-value. Marx argued that absolute surplus-value, that is, the extension of the working day to or beyond the physical limits of the worker and the restriction of her/his consumption of use-values to or below the physical minimum, was both logically and historically prior to relative surplus-value, that is, increasing the productivity of labor through the introduction of machinery, thereby reducing necessary labor time and increasing surplus labor, and argued that the rise of modern industry signified the growing predominance of the second of these. For Marx, the transition from the predominance of absolute surplus-value to relative surplus-value was necessitated by the limits on absolute surplus-value imposed by the finite maximum length of the working day and the minimum level of consumption required for the reproduction of labor-power, and by the rising struggle of workers for higher wages and shorter working hours. Marini argued that another factor played a crucial role in this transition: the importation of cheap foodstuffs and other consumer goods from colonies and neo-colonies, especially from Latin America. These were cheap because of the prevalence of super-exploitation in those countries, while their transition from absolute to relative surplus-value, that is, their capitalist development, was impeded by the appropriation of part of the surplus by industrial capitalists in the dominant nations. Marx’s views on the historical progression from absolute to relative surplus-value have been misunderstood by Euro-Marxists to mean that the importance of absolute surplus-value has dwindled and all-but disappeared, but Marini argued that the opposite is true:

“The central issue in the debate is . . . should forms of exploitation distinct from those that generate relative surplus-value on the basis of increased productivity be excluded from theoretical analysis of the capitalist mode of production? The mistake of Cardoso is to respond affirmatively to this question, as if the higher forms of capitalist accumulation imply the exclusion of inferior forms and develop independently of them. . . . Capitalist production, by developing the productivity of laborpower, does not suppress but accentuates the greater exploitation of the worker, and second, forms of capitalist exploitation are combined in different ways throughout the system as a whole, generating distinct social formations according to which of these forms predominates”.

With the increasing flow of North-South FDI yet to turn into a flood, international outsourcing yet to take off, and Third World debt yet to achieve its mountainous proportions, the dependency theorists’ claims of systematic North-South exploitation crucially depended on making the theory of unequal exchange stand up; that is, to successfully operationalize the law of value, by developing the theory of unequal exchange into a theory of global capitalist production. of all the dependency theorists, Marini went furthest down this road.”

Essentially then, Marini rejected the notion of countries following set paths towards capitalist development. The highly developed capitalist states did not develop simply through some internal calibration of economic governance, but had relied on cheap goods from underdeveloped nations which subverted any claim to a capitalist development in one country based on abstract principles that didn’t take it account the inter-relations of the outside. At the same time, the capitalism of underdeveloped countries was failing to develop because it the wealth that was generated from production was leaving the country, thus rendering the gains from increased productivity (relative-surplus) irrelevant to the country’s development and leading to labour regimes that had to focus on squeezing value out of human bodies (absolute-surplus).

The article It was taken from Marini’s archive and we only know that it was written in 1994 because of a small note made with a pen at the corner of one of the pages. While it is not as theoretically dense as other writings of his, a reader that does not have a passing familiarity with Marxist literature or has never studied economy might feel a bit lost. I’ve tried to add a few links that explain concepts and terms utilized by Marini to facilitate the understanding for those readers.

The object of the article is to perform an overview and critique of the theory of “developmentalism”, advanced by CEPAL and highly influential in the 60’s, and to different degrees, also influential in the left-wing governments of the so-called “Pink Tide” of Latin America. Western discourse on development reflected an ideology of discrete and atomised nation states all walking a path of capitalism through a series of predefined stages until they were ready for ‘take off’. CEPAL, however, were part of an alternative paradigm of developmentalism that recognised how global trade kept underdeveloped countries from progressing and proposed industrialisation and state building rather than remaining bound by primary good exports. In this paper Marini analyses and critiques both the development and developmentalist paradigms, showing how even with attempts to industrialise, underdeveloped countries remained tethered to foreign capital that prevented growth.  Unfortunately, development remains a signature ideology of the modern development industry and global financial institutions, who remain committed to methodological nationalism when it comes to development.

Finally, any mistakes that might have happened in the translation are my sole responsibility. While I have a lot of experience in translating Marxist literature from English to Portuguese, this is only the second time I’ve done the opposite – and the first time was with quite a simpler text. Still, I’m happy enough if his work is understandable and reaches a broader audience. I hope you have a good read.

– R.N, Brazilian Marxist-Leninist, ex-History teacher, trying to quit smoking so I can witness the death of capitalism in my lifetime.
Follow me @tropicalML

 

La crisis del desarrollismo – The Crisis of Developmentalism

Until the middle of this century, the social theory produced in Latin America was thought, with rare exceptions, only from the consideration of national issues. One can only speak of the emergence of a structured and, in many respects, original line of thought about the region as such beginning from the 1949 Latin American Economic Report, released by the United Nations Economic Commission for Latin America (ECLAC/CEPAL) in 1950.

The importance of the theorization that begins there resides in the novelty of some of its approaches and the great repercussion that it has achieved, academically and politically, in most of our countries. An analysis of the CEPAL’s conceptions is, therefore, indispensable to those who wish to know the evolution of modern Latin-American thinking.

The Development Theory

To understand CEPAL/ECLAC, it would be useful to first consider the intellectual biography of its exponents, mainly the Argentine Raúl Prebisch (directly responsible for the Report of 1949), followed by the Brazilian Celso Furtado and the Chilean Aníbal Pinto as well as the Argentine Aldo Ferrer and the Mexican Victor Urquidi. Like Prebisch – who was director of the Central Bank under the Perón government – most of them had an active participation in politics. Their training was mainly Keynesian and they showed appreciable mastery of classical political economy, particularly Prebisch and Furtado. However, their incursions into the field of Marxism were usually unfortunatei.

CEPAL was set up as an agency for the dissemination of development theory that emerged in the United States and Europe at the end of the Second World War to respond to the restlessness of the new nations that had become independent as a result of the processes of decolonization and to the enormous inequalities that characterized international economic relations.

Faced with this situation, countries in the capitalist center worried about justifying the glaring disparities that benefited them and thus tried to convince these new States that the possibilities of progress and well-being were also open. Under the generic name of development theory, the formulations from the central countries were born in governmental agencies or bodies associated with them, spread in universities and research centers and were passed on to international agenciesii.

These formulations were essentially about building a concept of economic development, based on the unfolding of the productive apparatus, according to the classification of three sectors: primary, secondary and tertiary. To explain why advanced countries were those in which this unfolding has been fully realized, the process that took place in advanced capitalist countries was described as a general phenomenon and it was held that the position they occupy in the international context was due to them being in a superior stage of an evolutionary continuum. The different economies that made up the international system were said to be located in inferior stages of the same process. Thus development was framed in a dual scheme: development and underdevelopment.

Underdevelopment was therefore seen as a situation prior to full economic development and akin to the pre-industrial era of developed countries. Existing between both of these situations was the so-called decolagem (or ‘take-off’ to use the language then in vogue) in which the economy in question would present the conditions for the initiation of self-sustainable development. Full development is thus something accessible to all countries that strive to create the right conditions for that purpose.

A second aspect to highlight in development theory was its insistence that economic development also implies the modernization of the country’s economic, social, institutional and ideological conditions to the current standards in the central capitalist countries. The modernization process, in addition to bringing with it the possibility of tensions and crises, would manifest itself, for a time, through a situation of structural duality, which would oppose a modern sector to the traditional sector. The theme of modernization and the notion of structural dualism inspired most of the sociological and anthropological production of that periodiii.

Finally, a third aspect to consider in development theory was its projection on the methodological level. To the extent that development and underdevelopment were both constitutive moments of the same projected reality, the industrialized capitalist economies could only be differentiated by quantitative criteria that would locate an economy on this or that degree of the evolutionary scale. Thus, underdevelopment was defined by means of a series of indicators: real product, degree of industrialization, income per capita, literacy and education rates, mortality and life expectancy rates, etc., aimed at classifying the economies of the world system and recording their progress on the path to development.

The inconveniences of such a methodology are evident. As it is essentially descriptive, it has no explanatory capacity. The result is a perfect tautology: an economy presents certain indicators because it is underdeveloped, and it is underdeveloped because it presents such indicators. Rotating in circles, this analysis can only aspire to establish verifiable correlations, which do not by themselves shed any light on the questions concerning cause and effect.

In any case, it was from development theory that CEPAL emerged. To understand the reason for this, we must look at the role of the United States in the construction of the post-war world. We will leave aside, for now, the consideration of its initiatives in the political, economic and military spheres in order to occupy ourselves solely with what the US did in the ideological sphere.

Special mention should be made of the creation of regional economic commissions, subordinate to the United Nations Economic and Social Council and based in Europe, Asia and the Far East, Latin America, Africa and West Asia. Their objective was to study regional problems and propose development policies. In reality, the fundamental mission attributed to these commissions was to be agencies for the elaboration and dissemination of development theory in the context of the ideological domestication policy that the great central countries would use to oppose the demands and pressures of what came to be called the Third World.

Formally starting its work in 1948 in Santiago, Chile, CEPAL did not shy away from the mission entrusted to it, but, far from being limited to mere dissemination, assumed the role of a true creator of ideology, since it tried to capture and explain the specifics of Latin America. These specificities, in comparison with the new countries that decolonization created, were indisputable.

In addition to its early political independence, Latin America then had had a century of capitalism, which led to the formation of complex class structures and consolidated nation-states. Even more importantly, in much of its industrialization, which had begun between the two world wars, class alliances had changed and converted the industrial bourgeoisie into an integral part of the ruling bloc.

Unlike, therefore, other similar agencies, CEPAL, when constituted, was linked to the internal reality of Latin America and expressed the class contradictions that characterized it, including inter-bourgeois contradictions. More than that, it was instrumentalized by the industrial bourgeoisie, both in terms of internal social and political struggles, as well as the conflicts established in the world economy. This made CEPAL, which started from the great centers’ development theory, introduce modifications that would represent its own original contribution, and that made Latin American developmentalism a product of, yes, but not a simple copy of development theory.

Developmentalism

CEPAL’s most important contribution was its criticism of the classical theory of comparative advantage which postulates that each country must specialize in the production of goods in which it can achieve greater productivity, usually determined by soil fertility, availability of mineral resources, etc. Comparative advantage claims that this will ensure each country privileged conditions of competition in the world market.

CEPAL rejected this and empirically demonstrated that, from 1870 onwards, there was a permanent trend in international trade to deteriorate the terms of trade to the detriment of countries exporting primary products. Furthermore, it affirmed that this trend led to income transfers – in reality, value transfers, a concept that CEPAL does not have a firm grasp on – implying that the exporting underdeveloped countries are subjected to a constant outward flow of wealth to the developed countries, that is, a decapitalization.

According to CEPAL, the deterioration in terms of trade is due to the fact that world trade leads to confrontation between industrialized countries and countries with a primarily export-based economy. The latter, as they do not develop their industrial or manufacturing sector, are not able to produce technologies and means of capital capable of increasing their labor productivity. At the same time, the inexistence of this sector limits the expansion of the labor supply, leading to a surplus of labour-power in the primary sector, which makes it difficult to increase productivity and reduces its price (or wages); this also results in the formation of a surplus of labour-power in the service sector, where the same effects are generated. This is the reasons for the low wages that occur in underdeveloped economies, which both hinder technical progress and do not allow the expansion and dynamization of the internal market.

Conversely, developed countries are those that, from an expanding secondary sector and a dynamic demand for labor, present high wages, which induce the introduction of technological innovations aimed at reducing the participation of labor in production and, therefore, the impact of wages on costs. The resulting increase in productivity would not be transferred immediately to the prices of the goods that these countries export, causing these prices to remain at high levels in international trade. Consequently, the transfer of wealth from the underdeveloped periphery to the developed center would be favored.

The truth is that while they correctly captured the empirical phenomenon of the deterioration of the terms of trade, CEPAL misinterpreted it: sooner or later, the increase in productivity and the consequent reduction in costs have to be passed on to prices, unless abnormal situations occur in the world trade, such as those that constitute a monopoly situation or resulting from wars and natural disasters. In addition, and CEPAL was not unaware of this, the development of capitalism in the dependent countries implied, from the beginning, the introduction of new production techniques and an increase in labor productivity. Their notes relating to the question of the remuneration of the workforce represented a formidable intuition, albeit ill-founded, since it was not simply a consequence of low productivity, as life would be in charge of demonstrating.

In any case, with its center-periphery scheme that took into account the relations between economies as an analytic starting point, CEPAL went far beyond the center’s theory of development and promoted a thesis that had until then been an exclusive privilege of the Marxist theory of Imperialism. In fact, Prebisch’s statement that “the economic development of peripheral countries is yet another stage (…) in the process of organic development of the world economy”iv irresistibly recalls Bukharin v. Yet the limitations of CEPAL’s thinking are an effect of its umbilical link with development theory, as well as the cost derived from the class position from which CEPAL carried out its formulations.

This is how, still faithful to the idea of economic development as a continuum, CEPAL did not consider development and underdevelopment as qualitatively distinct phenomena, marked by antagonism and complementarity – as dependency theory would in due time – but only as quantitatively differentiated expressions of the historical process of capital accumulationvi. This implied that underdeveloped countries could access full capitalist development simply by applying a few corrective measures to international trade and implementing adequate economic policies. This thesis, that of autonomous development, is one of the hallmarks of CEPAL thinking.

The demand for an economic policy aimed at overcoming underdevelopment rested on another key element: the concept of the State as something above society and capable of endowing itself with its own rationality. Based on this, CEPAL leapt from the position in which it projected its economic analyses, where it dealt with objective laws and identified competing economic interests, to an idyllic world view of states occupying a playing field of relationships in which confrontation and economic injustice could be replaced by negotiation and cooperation.

If economic policy was the instrument, the essential objective in overcoming underdevelopment was, for CEPAL, industrialization. In their view, this would be able to promote a better distribution of the workforce among the productive sectors; it would increase wages, making the internal market viable, and would induce technical progress and increase labor productivity, putting an end to international transfers of value. Industrialization would take place through a deliberate policy of substituting imports of manufactured products for domestic production instead.

CEPAL’s faith in industrialization as sufficient for overcoming underdevelopment, extended to the virtues it would have as a lever for social transformation. Admitting that certain reforms were necessary at the institutional and political level, CEPAL underestimated distributive measures, including agrarian reform, except as a secondary interest provisionvii. In the thinking of CEPAL, industrialization was a deus ex machina for the correction of social imbalances and inequalities.

This developmentalism was the ideology of the Latin American industrial bourgeoisie, especially that fraction which – responding to a greater degree of industrialization and already sharing the power of the State with the exporting bourgeoisie – tried to expand its space at the expense of the latter group, resorting to an alliance with the industrial proletariat and the salaried middle class. At the same time that it beckoned [provoked] them with the expansion of jobs and higher wages. Developmentalism, by criticizing the traditional scheme of the international division of labor, demanded the establishment of a new type of relations with the capitalist centers. However, while rejecting the primary export model and opening fire on the ruling class, CEPAL was reluctant to propose agrarian reform as a premise of the industrial model, given that, since the social alliance did not pass through the peasantry (with the exception of Mexico), it would mean uselessly aggravating the inter-bourgeois conflict.

During the 1950s, along with the advance of the industrial bourgeoisie, both in countries where it was already strong – Argentina, Chile, Uruguay, Brazil, Mexico – and in the others which then accelerated their industrial growth, developmentalism became the dominant ideology and the model of public policy par excellence. Nevertheless, after a decade of expansion, in the 1960s the Latin American economy plunged into crisis and stagnation, clearly revealing the perverse characteristics that industrialization had assumed. This had profound repercussions for CEPAL circles, giving rise to a theoretical crisis of great proportions.

The Crisis of Developmentalism

The economic crisis that hit most Latin American countries in the early 1960s is simultaneously a crisis of accumulation and realization of production. It manifests itself, on the one hand, in the strangulation of the ability to import the material elements necessary for the development of the production process and on the other hand, in the restrictions encountered in carrying out this production. Both phenomena are due to the fact that industrialization took place on the basis of the old export economy, that is, without advancing structural reforms capable of creating an economic space conducive to industrial growth.


In the advanced capitalist countries, industrialization took place in an organic way, making the growth of the consumer goods sector immediately generate the expansion of the supply of capital goods, without which the process would have been blocked. In Latin American countries, import substitution operated on the basis of a pre-existing demand for consumer goods and meant that the acquisition of capital goods (the goods used to make consumer goods) still rested essentially on imports, forming a mode of industrial reproduction intrinsically dependent on the outside. The continuity of a process put in these terms would suppose a constant growth in the capacity to import and, therefore, an increasing mass of foreign currencies.

Where do these currencies come from? First, from exports. However, once the old productive structures had remained untouched, exports continued to consist of traditional primary goods, subject to the secular trend of deterioration in terms of trade, diagnosed by CEPAL. The manufacturing sector was not concerned with conquering foreign markets and so all its production was destined for the domestic market, which meant that it continued to depend on the primary export sector to obtain the foreign currency necessary for the acquisition of the intermediate and capital goods that its expansion demanded. In this way, the industry – which CEPAL had announced as the lever for autonomous development – did nothing but boost the expanded reproduction of Latin America’s dependence on the world market, without leading to an effective overcoming of it.

The second source of foreign exchange corresponds to the contribution of foreign capital, materialized in direct investments, loans, financing and donations. With relatively stagnant export earnings, Latin America asked the United States for a generosity similar to that of the Marshall Plan that had mobilised considerable aid through public loans and government donations for European reconstruction after WW2. Latin America’s last serious attempt in this regard was that of the President of Brazil, Juscelino Kubitschek, in the late 1950s, when he launched the PanAmerican Operation [Operação Pan-Americana, or OPA], focused on obtaining public credits. However, the OPA ended up being supplanted by the North American initiative of the Alliance for Progress, at the beginning of the 1960s, which was characterized by the emphasis it placed on foreign private investments.

Such investments had begun to penetrate the Latin American industrial sector since the early 1950s, gaining strong momentum in the second half of the decade. During this period, industrialization had found support and an acceleration factor in them. However, when the time for these investments to mature had come, i.e., when it was time to make a real profit, they revealed their contradictory nature: the profits had been made in national currency; but in order to be effective and thus able to be reintegrated into the assets of the foreign parent company, they had to be able to be converted into international currency, which required foreign exchange to be subtracted from the amount made in foreign transactionsviii. In other words, what had served to expand Latin America’s import capacity was now proving to be a limiting factor.

Although there was an expanding domestic market, the inflow of foreign capital surpassed the outflows, masking the problem. But the domestic market would soon find its limit. The great migrations from the countryside to the city, caused by the maintenance of traditional production structures and encouraged by industrialization, translated into a rapid growth in the supply of urban labor which would eventually shift towards open or disguised unemployment. The cause of the industry’s inability to create jobs lay – more than in the use of inadequate technologies, since it is inherent to technical progress to save labor – in the brutal overexploitation of the work that was practiced there, which was, in turn, made possible by the existence of that redundant workforce.

Combining low wages with extended working hours and an intensification of the pace of work, industrial capital mobilized masses of labor substantially larger than what, under normal conditions, corresponded to the sum of money destined to pay themix. Worse still: it ended up creating an extremely perverse income distribution, which condemned the majority of the population to miserable consumption levels, often below the minimum subsistence standard. As a result, the domestic market was restricted, the creation of investment areas was limited and the introduction of new production techniques was discouraged. To complete the picture, the preservation of the old agrarian structure and the concentration of investments in industry caused a mismatch between the food supply and urban growth, driving the increase in agricultural prices and triggering inflation.

It is therefore not surprising that the 1950s were characterized by a sharp intensification of social struggles. These had, as new components, the emergence of the peasantry as a social movement, a renewed and growing working class, and the emergence of a poor proletariat in the cities, giving rise to theories about urban marginality. At the same time, the fabric of the urban middle class was thickening and their wages accelerated, leading to a rapid increase in the mass of students and young professionals increasingly dissatisfied with the lack of prospects presented by the kind of development commanded by the industrial bourgeoisie. These factors converged, over this period, to promote convulsions and political crises, beginning with the radicalization of the Guatemalan Revolution under Jácobo Arbenz and the Bolivian Revolution of 1952, continuing with Getulio Vargas’ suicide in Brazil and the overthrow of Juan Domingo Perón in Argentina, followed by the railway workers movement in Mexico and the Venezuelan Revolution of 1958 and culminating in 1959 with the Cuban Revolution.

Sensitive to this situation, CEPAL began to modify its projections and, rectifying the merely developmentalist approach that characterized it, put more emphasis on structural reforms and income distribution. But it was too late. In a troubled continent, the Cuban Revolution shook the foundations of American domination and sowed panic among the creole ruling classes. When the cycles of military dictatorships began, CEPAL’s developmentalism was definitely in crisis.

This is visible with the departure of Prebisch, who, in 1963, exchanged CEPAL for UNCTAD [United Nations Conference on Trade and Development]. In 1965, Celso Furtado dedicated himself to demonstrating that the Latin American economy tends structurally to stagnation: this would not be caused by this or that economic policy – which absolved CEPAL – but would result from the very dynamic of the region’s economic structures, marked by the seal of dualism. Furtado summarizes his theses in this way:

“[E]verything happens as if the existence of a semi-feudal pre-capitalist sector, together with an industrial sector that absorbs a technology characterized by a rapidly growing capital coefficient, originated a pattern of income distribution that tends to guide the application of productive resources in order to reduce their economic efficiency and to concentrate even more revenue in a process of circular causalityx.”

That’s why:

“[T]he behavior of agents who make economic decisions, which may well be governed by strict criteria of rationality, both according to the means they use and their legitimate objectives; they are found in the structural relations that delimit the field within which the relevant decisions are madexi.”

It is worth noting that Furtado eases his rigid structuralist model by also considering the foreign policy of the United States and the action of multinational companies as negative factors for Latin American development. More than that, in a burst of political radicalization, he raises the possibility of overcoming the structural determinations that he had detected in his analysis through the practice of a socialism of national, statist and third-worldist type:

The ideological substance of Latin American socialism will surely be extracted from the critical awareness of overcoming underdevelopment. This struggle takes place within the national political frameworks, which delimit the decision centers that command economic activities, both internally and externally (…)

The conjunction of these two “force-ideas” – the nationalist affirmation and the desire to overcome underdevelopment – constitute the core of ideological thought that, in different ways, is provoking the transformation of a vast community of peoples that constitute the Third Worldxii.

In that same year Aníbal Pinto produced a text of remarkable intelligence, analyzing the direction that Latin American industrialization had taken, in which he made extensive use of the contribution of renowned Marxists, such as Baran, Sweezy, Dobb, Bettelheim, Nove and Wright Mills. Taking as a background the structural duality which would configure two poles: capitalist and underdeveloped, the author proposed to “examine whether the conditions established (by capitalism) were propitious to the further development and eventually to the correction of its evident contradictions”xiii.

Pinto’s starting point was the notion that, in the phase that CEPAL calls “internal development” (industrialization), the structural duality changes:

On the one hand (…) the separation between the poles is less clear than in the other model (of “external development”) and does not correspond to a simple sectorial dichotomy. Within each of the main activities – primary, secondary and tertiary – a kind of ‘horizontal cut’ is established, which divides the modern layers from the traditional or stagnant ones.

On the other hand, the unevenness between the two universes often seems to be much more pronounced (…)xiv.

However, although Pinto envisioned the possibility of working with a more sophisticated apparatus, which introduced a horizontal cut in the two poles of the economy, he was almost always limited to the bipolar scheme, induced to a large extent by the empirical material he had. Basically, his concern revolved around the concentration of technical progress in the capitalist pole and the constraint that this implies for the development of the other pole, the employment issues that arise from it and the negative effect that both factors have on the distribution of income, even within this same capitalist pole.

The result is the distortion and loss of dynamism within industrialization. Referring to the situation of the most industrialized countries, Brazil and Mexico, Pinto noted:

The two largest countries in Latin America share a fundamental characteristic: that in both, from the angle of technical progress and income, an important part of their systems and their population has been left out of development. However, it seems clear that the progress of these economies in the present and especially in the near future depends mainly on what is generally called mass consumption, that is, on the existence and expansion of the market for dynamic industries, basically those of durable consumer goods. and intermediaries and those of capital that support them.

Putting the problem in a journalistic manner, it can be said that these countries depend on a mass market – however, without the masses that, in fact,  progressively sustain and expand it in the futurexv.

Though he floated and then discarded a revolutionary change, he stressed that “even a more ‘moderate’ strategy could require reductions in the concentration of property,”xvi which would be exemplified by agrarian reform. The author makes a call, in the good tradition of CEPAL, for state intervention to solve the problem, concluding:

(…) Considering the set of eventual effects of a strategy that manages both the sources of income distribution and those of reallocation of technical progress, one should mention the not to be discarded possibility that this would imply a moderation of the impulse of the capitalist sector, which has been the dynamic focus of the system in recent decadesxvii.

Seemingly, little remained of the confidence that CEPAL had in the intrinsic virtues of capitalist economic development to ensure progress and social justice in Latin America. Furtado’s disenchantment led him to radicalize his positions and to entrust socialism with the task of breaking the innate tendency of Latin American capitalism to stagnation. Pinto’s conclusion is equally desperate: in the face of the perverse face taken on by Latin American capitalism, it is up to the State to restrict the expansion of the modern sector, that is, to act against economic development in the terms that CEPAL had conceived.

The crisis of developmentalism meant the loss of the privileged position that CEPAL had achieved in its first decade of operation, when it became the ideological agency par excellence in Latin America. From its new position, as a respectable technical body, it would continue to carry out studies and produce reports of high quality. However, the Latin American thought process leaves it behind, giving rise to new theoretical manifestations.

Ruy Mauro Marini
1994

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i See, for example, the unfortunate way in which both Furtado and Pinto approach an elementary concept of Marxist economic theory: that of surplus value, respectively in Dialéctica del desarrollo, Mexico, FCE, 1964, Part I, and in “Concentración del progreso técnico y de sus frutos en el desarrollo latino-americano, El Trimestre Económico (Mexico), 125, january-march of 1965 (the latter, included in the book that gathers essays by the author, under the title Inflación: raíces estructurales, México, FCE, 1973, from where we will extract some quotes later).

ii Among the significant works of the period are: National Bureau of Economic Research, Problems in the Study of Economic Growth, N. York, 1949; United Nations, Measures for the Development of Under-developed Countries, N. York, 1951; Colin Clark, The Conditions of Economic Progress, London, 1951; S. H. Frankel, The Economic Impact of Under-developed Countries, Oxford, 1952; W. W. Rostow, The Process of Economic Growth, Oxford, 1953; and W. Arthur Lewis, The Theory of Economic Growth, London, 1955.

iii Cf. Enrique Valencia’s essay on sociology and modernization, included in this volume, as well as the well-known thesis of the French sociologist Jacques Lambert on “two Brazils”, later generalized to the whole of Latin America.

iv La obra de Prebisch en la Cepal, seleção de Adolfo Gurrieri, México, FCE, 1982, I, p. 157.

v Look at his essay La economía mundial y el imperialismo, Buenos Aires, Cuadernos de Pasado.

vi The exception to the rule is made by Celso Furtado, who, in a more advanced period, maintains this difference between the two economic forms, even though he relativizes his approach when circumscribing it to the issue of capital formation. See his book Desarrollo y subdesarrollo, Buenos Aires, Eudeba.

viiIn the 1949 Report, Prebisch stated: “The essential economic problem in Latin America is to increase its real income per capita, thanks to increased productivity, since raising the standard of living of the masses through income redistribution has very narrow limits ”. La obra de Prebisch…, op. cit., I, p. 163. And, on one of the few occasions where he deals with agrarian reform, he says: “(…) certainly, the increase in land productivity depends fundamentally on the improvement of productive technique and capital investment. However, there are countless cases in which the form of ownership is one of the obstacles that will have to be removed before these measures can bear fruit ”, to later indicate: ”The tax system can be one of the most effective means of doing so, without leaving aside the direct redistribution measures that the circumstances advise”. Ibidem, p. 261-262.

viiiEso nos pone ante un problema de realización de la plusvalía, que no consiste ya en su cambio de la forma mercancía a la forma dinero, sino en el cambio que la misma forma dinero debe sufrir debido a que no es dinero mundial. Un análisis del fenómeno, aunque deficiente desde el punto de vista conceptual, puede encontrarse en Francisco de Oliveira y F. Mazucchelli, “Padrões de acumulação, oligopólios e Estado no Brasil (1950-1976)”, ensayo incluido en el libro de Oliveira: A economia da dependência imperfeita, Río de Janeiro, Graal, 1977, p. 76-113.

ix An interesting study on the overexploitation of work carried out in this period by industrial capital is, by Raimundo Arroio Junior and Roberto Cabral Bowling, The process of industrialization in Mexico, 1940-1950. Un modelo de superexplotación de la fuerza de trabajo, Mexico, UNAM, Escuela Nacional de Economía, 1974, undergraduate thesis, mimeo. The work, somewhat modified, was published separately in two essays by Cordera, R. (comp.), Desarrollo y crisis de la economía mexicana, Mexico, FCE, Lecturas n. 39.

x Subdesenvolvimento e estagnação na América Latina, Rio de Janeiro, Civilização Brasileira, 1965. There is a translation to spanish: Subdesarrollo y estancamiento en América Latina, Buenos Aires, Eudeba, 1966, from which the quote comes from, p. 97. 

xi Ibid., p.100.

xii Ibid., p. 26-27.

xiiiConcentración del progreso técnico…, cit., p. 84

xiv Ibid., P. 43. It should be borne in mind that this conception of Pinto, regarding the two poles and the horizontal cut applicable to both, will later influence other authors. See, in particular, Aníbal Quijano, Redefinición de la dependencia y marginalización en América Latina, Santiago de Chile, Centro de Estudios Socioecómicos (CESO), 1970.

xv Ibid., p. 85, highlighted in the original.

xvi Ibid., p. 97.

xvii Ibid., p. 103.