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A Southern Perspective on Development Studies

Carlos Mallorquin

Chapter 1. A Southern Perspective on Development Studies: Contributions from Latin America

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Economic science is universal, like mathematics. Economic science is not Pampa, Guaraní or Tehuelche. If its applicable in Europe, in America too
(quoted in Jimena Caravaca 2011: 35).

  • 1 We generalize Connell’s notion of the “colonial” asymmetries: “Knowledge about a colonized society (...)
  • 2 Origin of the Anglo-Saxon or Eurocentric discourses.

1As the epigraph goes, in the last decade of the 19th Century, the national congress in Argentina witnessed the then Minister of the Economy defending the idea that the government applied policies sustained by principles of universal validity. The political confrontation brought to light the notion that perhaps those “knowledges” coming from afar are not as consistent as they make out to be, and that local theorizations were necessary to “discipline” the “science” in question. The following chapter stresses the idea that a relatively autochthonous discourse on development was constructed in the Latin American region, which can be defined as the “Center-Periphery” perspective initially developed by Raúl Prebisch (1944b, 1944c, 1948, 1949, 1949a). Ultimately, it is a perspective that examines the power asymmetries that constitute social relations, within and between regions and countries, therefore the Center-Periphery couple is not necessarily a “geographical” peculiarity; it denotes some mechanism of exclusion and/or exploitation, within and between communities. At the (exchange) knowledge continuum the conception of power asymmetries can be made to look similar to Connell’s idea of a “Southern theory” (Connell 2007, Lander 2000).1 The rise of the “discursive formation” (Foucault 1972) in question first entailed a deconstruction-reconstruction of what was accepted as social science (economics, sociology, political theory, anthropology) in the Western-centric2 universities and vision of the world. In other words, it required a decolonizing conceptual strategy, creating a vocabulary not only consistent with the new “objects” that it should explain, but also, in its aftermath, showing that the theoretical inadequacies of the Western-centric discourses were unsustainable even within their own perspective and universe, which it was supposedly to investigate.

  • 3 For the Anglo-Saxon story, see A. O. Hirschman’s classic article (1981).

2This aspect has to be mentioned because initially, after World War II, there was the belief that economics, for example, could play, as it were, two different “scientific” games; one in which its categories were congruent and “coherent” for “developed economies,” and, simultaneously, another in which, certain concepts of the dominant literature in economics were “offside” given certain institutional and organizing qualities of those countries pointed as “underdeveloped,” and hence requiring and admitting the elaboration of differing and distinct categories. In economics, this divergent evolution in their respective objects and vocabulary came abruptly to an end by the early 1980s, in institutions and countries, “Center” and “Periphery” alike, which signaled the return of the hegemony of neoclassical thought.3

3But two decades previously, by the mid-1960s, the “Center-Periphery” perspective itself would evolve into an intertwined stream of two ideas, in which some of its proponents would change theoretical camps, in more than one occasion during the following years. One was denominated “Latin American Structuralism” and the other the “Dependency Approach”. This distinction is important because the rise of neoliberalism hegemony early in the 1980s was the product of its criticism of certain development strategies in the region, conforming a strange alliance with the “dependency” approach vis-à-vis Latin American Structuralism.

  • 4 Escobar (1995), Esteva (1992), Mallorquin (1998).

4Before describing the evolution of the Latin American Structuralism theoretical perspective and some of the personalities involved, it is important to mention certain political and institutional transformations in the aftermath of World War II (following section “It’s a Hard Chilliness A-Gonna Fall”), which made possible the posing of certain questions hitherto blocked and also the appearance of the Latin American discourse or the “will to power” in question.4 In the final segment of the chapter (Under the Sweltering Heat of the “Washington Consensus”), we attempt to elaborate a brief synthesis of the consequences and limitations of those policies and contest its hegemonic presence, with some descriptions of the economic and social tendencies in the region that should help focus on alternative political strategies.

It’s a Hard Chilliness A-Gonna Fall

5The political and intellectual undercurrents that drove the power Centers of the world after World War II are not recognizable today, given the relatively “multi-polar” prearrangements of domination, despite the United States virtual hegemony. But at that juncture it seemed imminent the face-to-face confrontation between the United States and the Soviet Union.

6The context of the Cold War post-WWII, and the decolonization movements of liberation led to the emergence of a host of voices from “Third World” countries looking to make themselves heard on the international stage, especially in the United Nations.

7The new power Center and guardian of the capitalist ensemble, the United States of America, which had arisen from the demise of Great Britain, sought new forms with which to organize the world economy. First came the founding of new rules for the flow of trade in general. Retrospectively, the Bretton Woods (Helleiner 2014) arrangements on the one hand, and the Marshall Plan for Europe on the other, intended then as the basis for the reconstruction of a war-devastated Europe, formed part of the same process. If great efforts could be undertaken to “promote higher living standards,” as the UN declared, why not develop specific means to undertake its implementation? This view led to the setting up of the Economic Commission for Europe and for Asia; and it was only a matter of time before other regions started creating similar demands and projects (Toye J., Toye R. 2004).

  • 5 Later, it will include “the Caribbean” as Economic Commission for Latin America and the Caribbean.

8Within this scenario, a well-organized group of men in Latin America, talented and confident in their specific fields and backed by their respective governments, managed to present a project for the creation of an Economic Commission for Latin America, or ECLAC (Comisión Económica para América Latina, CEPAL acronym in Spanish)5. Their diplomatic lobbying, with the help of some of their Western European counterparts was very successful, given the clear opposition to it by the United States government that had other plans: an organization, headed by it within the Organization of American States (OAS). Thus, by 1947, ECLAC had come to life for a three-year trial period, starting in 1948. Equally, it must be remembered that before ECLAC’s confirmation in 1951 as part of the United Nations Organization family, the United States government hounded its existence until it was finally defeated by the alliance of the Latin American governments. One should bear in mind that it was Getulio Vargas’s ultimate push that finally made it possible to set up ECLAC, contrary to the wishes of the United States (Santa Cruz 1984, Magariños 1991, Furtado 1985, Mallorquin 2010a).

  • 6 See, for example E. Iglesias’s (Executive Director of ECLAC in the 1990’s) recollections of the eve (...)
  • 7 Symptomatically, Prebisch rarely uttered the term “underdevelopment” (“subdesarrollo”) until the 19 (...)

9By January 20th, 1949, the countries of the region had been consigned among those “underdeveloped areas” by the inaugurating speech of the newly elected President of the United States of America, Harry S. Truman (Truman 1949). He went on to promise help to develop those “underdeveloped” nations which advocated “freedom” and “liberty.” A couple of months later that year appeared Prebisch’s (1949b) report to (ECLAC): The Economic Development of Latin America and its Principal Problems, hence forward becoming a classic in the Latin American social sciences literature on the prognosis of the “Periphery’s”6 “development” and “growth”7 vis-à-vis the “Center.” The text, branded by Hirschman (1981) since its inception as the Latin American “manifesto” for development, flourished worldwide in most languages.

10Therefore, “development” is a theoretical construct post-WWII. Before World War I, Western-centrism economic and sociological discourse reigned supreme: it was unashamedly teleological when it referred to those “backwards areas.” Furthermore, Arndt (1981) shows that the notion of “economic development” in those areas was seen in terms of opening and “exploiting natural resources.” Those notions cannot be made easily harmonious with “well-being of the population” and “growth per capita” generated in the 1930s and 1940s with the construction of the national incomes accounts and “Keynesian” macroeconomic models (Danby 2017). As Heilbroner (1963), Love (1996), and Arndt (1987) insisted, before World War II little was written on the “backwards areas” that was not thought in terms of a “stage” that had been superseded by the “industrial” economies.

  • 8 See also Kay’s note number 5 and 8 of Chapter 6 of his book (Kay 1989: 246). Ironically, up to date (...)

11Although Prebisch was not ECLAC’s Secretary General until 1949, his important role in its recognition and creation, a product of his work style and passion, which he instilled at the ECLAC, can never be exaggerated (Hodara 1987, Dosman 2008). In terms of his ideas on economic development, speaking in theoretical terms, he can truly be considered a pioneer and progenitor of a long-lasting tradition in this field in Latin America, ifnot in most “Third World” countries. Part of his legacy relates to his belief and struggle for the creation of an institution representing those countries that had come to specialize in the production of primary or raw materials in general, worldwide and/ or particularly in Latin America, which would promote and monitor their development. His share of élan in the fulfilment of the ECLAC project could be seen once again during the 1960s, when he left the organization to become Secretary General of the UNCTAD and subsequently head of The Latin American Institute of Social and Economic Planification (ILPES), a project and proposal of his own making in 1962 whilst still at ECLAC. During the 1940s and 1950s in many Latin American countries, universities created new Economic and Sociology Departments driven by the political movements and governments purporting to sponsor growth and “development” processes. The rise and decline of the perspective to be described below can also be seen in transformations of the Economic and Sociology Departments in the universities in the region between the 1950s and 1990s (Montecinos 2009). The description of the development of the region and political milieu of the Latin American of post-WWII requires we trace some of the ideas, posing them as “ideal types” (Weber), given the ample fertile tradition in Spanish and Portuguese of the discourses in question mentioning certain personalities within the Latin American structuralist tradition (Prebisch, Furtado) and “dependency approach” (Cardoso, Marini).8

Latin American Structuralism

12By the second half of the 1940s, the pre-eminence of Keynes’s work on the possibility of resolving the “cyclical” nature of capitalism through planning or demand management cannot be put into doubt. Both his name and his ideas were synonymous with a “revolution” in economic science at academic institutions all over the world. The fruitful results of his ideas over time and space, and in practical terms, especially in Latin America during the early 1930s, were soon to be recovered to argue that Western-centric economic discourse has limitations, and that the Keynesian categories had to be transformed. This task was soon undertaken by R. Prebisch, J. F. Noyola, V. Urquidi, R. Boti, A. Pinto, O. Sunkel, D. Seers, C. Furtado, to name but a few.

13On the other hand, “economic science” could not go further than reiterate its new-fangled categories when thinking of the Periphery or the “backward countries.” There was a brutal silence and the absence of a specific theoretical discourse about countries that were plainly not “industrialized.” The emergence of the notion of “underdeveloped economies,” following World War II, which singled out late-comers to the growing industrialization process or raw material producer countries, was the product of a crucial theoretical and political battle fought by institutions like the ECLAC. The posing of a process of industrialization and transformations of the Periphery (fiscal and land reform, modernization of its state apparatuses) became the Center piece of the concerns by Prebisch and ECLAC.

  • 9 See next chapter for a detailed analysis of Prebisch’s ideas for the period 1943-1949.

14During the mid-1940s, Prebisch himself was very reticent to adopt the so-called “Keynesian revolution” vocabulary (examined in the next chapter), and was very critical of its work as well as much of economic science (Prebisch 1946, 1947, 1948, 1949a).9

  • 10 The notion does not exclude its presence. Many contemporary commentators, without acknowledgement a (...)
  • 11 Simultaneously, Prebisch mentions notions such as “disparate demand elasticities” and power asymmet (...)

15The asymmetric mechanism of distribution of the productivity gains or the “fruits of technical progress,” between the Center and the Periphery in Prebisch’s argument has nothing to do with “imperialism” whatsoever.10 It just so happened that during “the upward phase” of the cycle, prices of raw materials of the Periphery rose at a much faster pace than the correlative products of the Center, while in the down swing phase prices of raw materials declined at a much faster rate than industrial products and therefore the new market “clearing” price of primary products found itself requiring a superior quantum of sales of its products to buy a similar proportion of manufactured goods during the next cycle. Whether it was a question of differing demand-price “elasticity” for their respective products and/or because the Center’s better organized homogeneous labor associations managed to defend its income level better than the respective organizations of Periphery, a deterioration of the terms of exchange ensued, which in Prebisch’s eyes did not lead necessarily to categorize the overall mechanism as “unequal” (for a more detailed explanation see chapters 2 and 5) :11

  1. Since 1946, Prebisch had been arguing that the notion of “equilibrium” was a mystical notion.
  2. Therefore, the price mechanism and thus money did not “represent” anything external to itself other than being a unit of account, which explains his condemnation as “metaphysical” all those discussions about “value” in the early days of Marginalism or Classical Economy as labor content (“use value” and “exchange value” and so on).

16Prebisch argued that there was an intrinsic constitutive reason which describes the life existence of the cycle: Time is the culprit in question, and more specifically “time disparities,” between the Center and the Periphery. Differing time “phases” between the productive and circulatory circuits; as will be argued further ahead, it also applies within and between distinct capitals (heterogeneity).

  • 12 On the notion of “vicariousness,” see Maffeo Pantaleoni Pure Economics (1957, English version, orig (...)

17Classical and neoclassical economics eluded this issue by introducing money as a “vicarious”12 entity to restore a balance between the real and financial levels of the economy. But for Prebisch, there is a systematic asynchrony between the diverse productive cycles and the financial-money cycle (a time disparity), although “money” is reintroduced post factum in the orthodox traditional accounts of the economy and history of thought. The bank rates managed by the Bank of England in the first “cyclical Center” (Great Britain) would attract and/or expel gold during the fluctuating periods of the cycle, leaving to the Periphery the task of adjusting its overall internal and external accounts to this “untimely” movement. It is the time disparities that cause the systematic wave like (“undulatory”) motions of capitalism. At the First Meeting of Technicians on Central Banking Problems of the American Continent, Prebisch stated:

I find myself disturbed by the thesis that free competition leads to general equilibrium and to the most adequate distribution of the resources and income within the community. I do not see any correspondence between these abstract propositions and the reality of the economic world. (1946: 227)

18“Capitalism” was essentially unstable, thus the importance of money and fiscal policies. As Prebisch observed:

  • 13 That is “a continuous succession of disequilibriums’” (Prebisch 1948a, in Prebisch 1991c: 499, my e (...)

I have found only but wave motions, a succession of ascendant and descendant wave motions. (…) The cycle (…), in the Center as much as in the Periphery, is the characteristic form by which the economy grows –the capitalist economy has not had another form of growing than the cyclical form.13 (1946: 226-227)

19We could also see how Prebisch appropriated some of Pareto’s work. As Pareto explained:

In reality, equilibrium is never reached, since, as one approaches it, it alters continually because the technical and economic conditions of production modify themselves. The real state is, therefore, that of continued oscillation around a central equilibrium point, which itself moves. (Pareto cited in Mclure 2001: 76)

  • 14 And yet Prebisch could not help himself. In 1953, after many recognized economists of the “North” f (...)

20It must be said, however, that Prebisch did not make explicit these theoretical considerations at ECLAC.14 He was adamant that his purpose there was to produce practical and well-organized policies and technical advice to development projects:

We have presented at different sessions of the Commission a flow, at times abundant of documents in which the economic phenomena of Latin American countries are analyzed, interpreted, ordered; studies that could be judged as eminently theoretical. Gentlemen, it’s true that reality persuades us more so that practical action should have a theoretical base, be it in economic matters as in any other field of knowledge, but to conclude from this that the permanent organization of ECLAC is an instrument of theoretical analysis would be a serious, a very serious error because it would mean distancing oneself by the path traced by this Commission in successive meetings. The ECLAC organization is not a theoretical instrument, not a body of scientific investigation, but rather it is inspired by eminently practical purposes, objectives that have been defined and reached, perhaps, more clearly at the Conference in Mexico (…) ECLAC as an organization of international action (…) can examine those forces that act deep in the womb of the economy of the Latin American countries (…) (and) find a solution to our immediate problems (…) determining the technical necessities of the countries (…) the necessities of investment of capital; studies of the techniques of investment programs (…) contribute to the formulation of policies of development; and (…) training economists in problems of development. (Prebisch 1952: 24-25, my emphasis)

  • 15 For more details see the chapter “Celso Furtado and Development: A Brief Outline (1950- 2004).”

21Prebisch’s reminder of ECLAC’s mission and reprimand represent just one of several difficult episodes at the organization, for Celso Furtado in particular (see chapter on Celso Furtado), as a consequence of his first book The Brazilian Economy: A Contribution to the Analysis of its Development (1954) dedicated to Prebisch.15 The role of the “multiplier” and the “accelerator” were crucial to many of the calculations that would be undertaken to postulate specific rates of growth. The recommendations towards a “full employment” policy admitted that the economy could not be seen as a self-regulatory entity. Fiscal policies and management of interest rates as well as budgetary deficits were part of a process aimed at maintaining a certain level of employment and income. What came to be known as demand-managed economies gave clear indications of the results that could be accomplished through the promotion of economic “growth,” well above the expectations of “market forces,” in spite of the downward undulations and “cyclical” nature of capitalism.

22Prebisch’s ideas, and later those of Furtado, opened up a vast uncharted theoretical landscape, which henceforth would be mapped by means of new categories which would incorporate planning as one of the methods to induce a programmed process of development. Since the 1930s, Prebisch had been experimenting with great difficulty and not much success with various explanations to account for Argentina’s topsy-turvy economic development, including those that took their starting point from conventional economic categories: the cyclical notions of capitalism and the “Gold Standard” were parameters that left much to be desired, and could only be fitted to Argentina’s experience through an unquenchable violation of the facts (Prebisch 1944).

  • 16 Althusser (1969) insisted that the past should not be read in terms of the present, a “future anter (...)

23By 1947, Prebisch had initiated a theoretical perspective that would culminate in a specific discourse in reference to the so-called “primary goods producer” countries or the Periphery of capitalism. In other words, he thought that what was needed to address the “Periphery’s” problems, could not be deduced from Keynesian and/or neoclassical models of development. It was therefore paramount to differentiate the raw material producing countries (the Periphery) vis-à-vis the “Center” or industrialized nations. He was arguing against the plainly “false” claims of “universality” of the economic discourse hegemonic at that time, which in the last instance assumed that the countries of the Periphery should undergo similar structural transformations during their development process as those that the industrialized countries had undertaken in the past, adjusting themselves to world economic forces; a concept of history which L. Althusser (1969), in a polite and paradoxical manner has termed as “future anterior.”16

24Under this scheme of things, the “backward economies” had to adapt themselves to an international trading organization that blessed its relative abundance of factors of production. There arose a version of an international structure of trade, which reinforced the hitherto international division of labor: the Periphery had to specialize in the production of raw and primary products, and the Center had to concentrate on the production of manufactured products.

25These countries were supposed to use those “factors of production” in relative abundance, and thus cheaper, to produce specific goods. Accordingly, there was a “comparative advantage” (no doubt in static terms) that favored some countries to concentrate on the production of certain products that required diverse intensities of capital and/or labor. The surplus production would form part of the trade pattern that would maximize the overall growth and earnings of respective economies.

  • 17 According to Jolly, it should be more “properly called the Singer-Prebisch thesis after the careful (...)
  • 18 The presentation of Prebisch’s ideas can be followed in chapters 1 and 2, which take into account h (...)

26Today’s literature has been evaluating the “robustness” of what has become known as the Prebisch-Singer thesis (Prebisch 1949b, Singer 1949),17 although Prebisch had been showing statistically the “worsening terms of trade” or “worsening price relations” since the 1930s for Argentina. It seems that those countries that had actually followed the specialization path in their trade relations, and had accordingly adjusted their economies to the cyclical growth process of capitalism, found themselves, in the long run, in a worsening spiral situation. If, as he argued, the diffusion of the fruits of technological progress should have favored the Periphery, given its lower productive or technological capacity/intensity, so it should have manifested itself in lower price levels for manufactured goods imported. But the international price index revealed otherwise; this by itself did not prove, nor explained, what came to be known as the Prebisch/Singer thesis of the “deterioration18 in terms of trade” of the Periphery vis-à-vis the industrialized Centers. What was claimed was that after the continuum repetitive cycle, the Periphery, besides not being able to hold on to its own “fruits of technological progress,” also lost them through the downward pressure that was exerted on the prices of its goods.

27The Periphery’s deterioration, in terms of trade vis-à-vis the industrial nations, was due to the existence of a structural asymmetric “elasticity” price demand for their respective products. Given the power asymmetries in question, the Center managed to preserve its price and cost levels, even, and despite the downswing in the cyclical process. It is true, as Prebisch argued, that the gains (prices) in primary products during the upswing rose at a much faster pace than their counterparts at the Center, but it is also historically correct that during the downswing, they declined and lost much more than what they had attained previously. The so-called debate on the “strange persistence of the terms of trade,” and the proofs of its “deterioration” or otherwise, ever since its inception (Powelson 1977, Torres González 2010; 2006, Ocampo and Parra 2007, Vernengo and Caldentey 2010, Ellsworth 1956), despite many of its authors contentions, disregards the main contention of Latin American Structuralism, which was to question the idea that the “international division of labor” is a “natural” phenomenon. In other words, the conundrum epitomizes one among other geographical divisions, which represents the presence of power asymmetries, within and between different economic formations, countries, regions, and periods, and, therefore, not an insurmountable iron law. The absence of a “worsening” tendency of the terms of trade was not an oversight by the perspective in question: quite the contrary, it helped to underline that contingent power asymmetries should and could be changed, explaining the importance of the political strategies for the structural transformations.

  • 19 “empeoramiento en los términos del intercambio comercial”.

28On the other hand, the name Prebisch/Singer or in the inverse order, has become a worldwide academic and google phenomenon, when the so-called “deterioration terms of trade” is written in any research engine, and yet Prebisch had already started writing on the subject well before Singer’s 1949 text Postwar Price Relations Between Underdeveloped and Industrialized Countries. In 1934, Prebisch was using a different vocabulary: Argentina presented a “worsening of its international exchange terms” (Prebisch 1934; 189, my emphasis).19

29After the appearance of various texts (Prebisch 1949b, 1949c, 1951), where Prebisch presents these aspects in detailed fashion, during lectures on October 1951 to the Training Center of Latin American in Programs and Agricultural Projects and Related Subjects, he explicitly denounces the then misinterpretation of his posture:

  • 20 “Problemas del Desarrollo Económico en América Latina,” Third Conference, October 25th, 1951. Spani (...)

I was made responsible of having formulated an immanent law of the process of economic development by which the prices of primary products tend to depreciate in relative terms with respect to those of industrial products. I have not formulated any sort of such immanent law, but I simply called attention to the phenomenon that has occurred in a determinate period of time under the pressure of certain forces. We don’t know what will occur in the future, it depends on a series of factors. (Prebisch 1951b: 6-7).20

30Another aspect that formed part of the explanation of Argentina’s “worsening of its international exchange terms,” had to do with the differing import and export coefficients, between the trading entities; previous to the great crisis, the then hegemonic cyclical Center, the British Empire, had what can be called a relatively high import coefficient with respect to what was going to happen to the “world economy” once the USA took the hegemonic role during the interregnum of the peace before World War II.

31To preserve the hitherto level of export earnings, the Periphery had to increase the quantum of its exports, intensifying its productive capacity, which in turn increased its demand for imported goods (semi-manufactured and manufactured), constraining the diversification of its economy. Thus, every cycle saw the imposition of a tendency that presented itself as the deterioration of the Periphery’s terms of trade with all the subsequent negative consequences to its external balance (“disequilibrium”). The search for an elusive “equilibrium” meant a lower rate of investment, higher levels of savings, and a reduced capacity to receive foreign credits and therefore overseas capital. This had to be resolved by attracting foreign capital through an internal deflationary process, all of which stalled the growth of the economy.

32The growth of income in the Center was not reflected in an equally proportionate increase in its demand for products or goods from the Periphery. On the contrary, a whole series of substitutes and “demand” schedules appeared for other, and more elaborated types of goods, which for the Periphery meant a reduction in “demand” for its goods. The Periphery’s growth was therefore inhibited by internal and external disequilibrium given its lower capacity for imports, which in turn explained its stop-go characteristics. Modern literature presumes to have resuscitated this aspect of the power asymmetries phenomenon under the Thirwall thesis of “balance of payments” (Boianosvky and Solis 2014) constraints in a growing economy, converting it into a problem of price-income demand elasticities disparities between different economic formations. For Prebisch, the problem was not the “absolute export earnings” decline, but rather to what extent they generated internally the appearance of sectors whose “productivity” was higher than those concentrating on exports. And given the historically relatively low “import coefficient” of the United States economy, an “inward drive” development seemed the only practical option for the Periphery.

33Thus, all manifestations of the Periphery’s erratic growth process throughout the first half of the 20th century, largely based on the external demand for its goods, pointed towards a policy that required a sponsored process of internal productive diversification, which in the last instance meant the industrialization and the structural transformations and social reforms of these peripheral countries: a change in the social and technical division of labor. Simply put, the interpretation of Prebisch that concentrates its reading of the 1949 text as only a debate about “industrialization” loses a crucial piece of Prebisch’s vision; he clearly states that the “industrialization has a social purpose” (Prebisch 1949b: 139) and requires an “adequate social legislation” (Prebisch 1949b: 101).

34In Prebisch’s proposal, a “programmed” process of industrialization would in turn allow for the absorption of underemployed labor or those displaced from less productive sectors. The employment of labor in the secondary and tertiary sectors would secure a higher level of employment, which would in turn destroy the social and political forces which kept wages down that reinforced the life of old quasi “feudalistic” relations in agriculture, with low costs and extensive methods of land use for production of raw or primary products in many countries of the region. The industrialization process would substitute some imports, changing its composition, and creating a mechanism to hold on to some of the fruits of the technological progress. A more diversified economy presumes higher factor “prices,” which in the long run could be the basis for the export of industrial manufactured goods.

35Prebisch also sponsored a broader common market arrangement (Briceño 2010), with some important early accomplishments of the strategy during the early 1960s in Central Latin America, similar to today’s regional agreements in Latin America, which would facilitate the lowering of costs and the use of ample economies of scale for new industrial sectors. Initially, some industries would produce some goods at higher prices than those in international markets, but as the industrialization argument runs, in the long run those “Ricardian losses” (Prebisch’s expression) were a positive element in the tradeoff between having labor employed in industrial activities or importing cheaper products, which through the multiplier effects would generate incomes and demand internally. Besides creating a more “homogeneous” economic base, the substitution of imports with local production - industrialization-, would also enable a better control of the economy during cyclical downturns. In this sense, programming the rate of growth and industrialization was seen as a way to help “market forces,” not stifle them, as most neoclassical or neo-liberal misinterpretations of Prebisch claimed. The same process of reforms to transform land possession meant the creation of smaller capitalized productive units generating economic and political forces to contest the hegemonic conservative “haciendas” sector, economically and politically, giving life to “markets.” Later on, we will return to this aspect of Latin American Structuralism, but it’s worthwhile to underline that the “dependency approach” perceived from its inception these political features which obeyed great part of its criticisms of Latin American Structuralism.

  • 21 See Mirowski and Plehwe (2009). Hurwicz, as early as 1940, found the economists at Chicago “very re (...)

36To counteract these policies during the early years of the 1950s we can observe a series of “academic visits” to Latin America by members of the orthodoxy from the “North,” among them Jacob Viner, by then already a member of the Mont-Pelerin Society21 who in the words of Prebisch had the “sagacity,” as mentioned previously, to recommend demographic studies instead of economic development policies.

37Simultaneously, during the 1940s and 1950s, Brazil, under the sway of strong nationalist social forces, became everything that the so-called “ideology of developmentalism” represented. The political forces headed by Vargas and a large number of institutions like the Superior Institute of Brazilian Studies (ISEB) pushed the industrialization process into most of the plans they had a chance to come up with, culminating with Juscelino Kubitschek’s (“Targets Plan”) economic plans.

  • 22 The work by Bielschowsky (1988) shows the richness of the “economic thought” in Brazil, although or (...)

38After the war, the National Bank of Economic Development (BNDE) was founded and soon made agreements with the ECLAC, and Furtado’s involvement, to undertake many development projects. The Joint American and Brazilian Commission, which was formed to enhance the industrialization process, had Furtado as its Director. Brazil became, in the first half of the 1950s, a theoretical paradise for discussing and experimenting on the theme of “development.”22 Most of the leading exponents, G. Myrdal, R. Nurkse (1953), of a full-speed-ahead-towards-industrialization policy and critics, J. Viner (University of Chicago) and L. Robbins (London School of Economics), the structuralist’s terror, visited the country during that time and discussed the topic.

  • 23 For more details see third chapter “Celso Furtado and Development: A Brief Outline (1950- 2004).”
  • 24 A economia brasileira. It is ironical that a book that was dedicated to Prebisch was to cause him s (...)
  • 25 In the English language the closest examination of this type was done by Meier and Baldwin (1957).

39Furtado (1952) was to establish a specific debate with Nurkse (1953) on the issue of the size or otherwise of the market as a limit to the capitalization and development process. More on Furtado’s involvement in this process can be seen in the third chapter, here it is enough a summary. Furtado’s theoretical and practical interests during the early 1950s examined the history of the evolution and transformation of the Brazilian “economy” Periphery and “economic theory” then dominant in the western world.23 Hence, Furtado’s first published book The Brazilian Economy (1954)24 had two quite distinct characteristics. On the one hand, it was comprised of a historical description of Brazil’s “economic formation” from its colonization up until the decade of the 1950s, and on the other, we had one of the first documented histories of economic thought. It focused on the problems of “backward” economies,25 demonstrating that orthodox economic categories’ references towards “underdeveloped economies,” had only the function of signaling “differences,” with respect to “developed” economies, and worthless to think the specificities of an “underdeveloped economy.”

40The concept of an underdeveloped economy as a distinct entity with its own logic and structure was already being processed conceptually, culminating in fully fledged discourse during the years of 1958-1962, displacing the teleological and evolutionary notions implicit and explicit in conventional economic discourse, Keynesian included. To start with, the notion of an “underdeveloped economy” starts dislodging the hitherto category of a “colonial economy” dominant in much of the text. By 1958, Furtado was convinced, although not yet completely theoretically armed, that the Latin American economies were specific historical entities that could not be explained with the traditional vocabulary of mainstream economics.

  • 26 See chapter ahead dedicated to his work: “Celso Furtado and Development: A Brief Outline (1950-2004 (...)

41Paradoxically, Prebisch was very critical of Furtado’s ideas,26 and reprimanded, The Brazilian Economy… (1954), which in turn made Furtado ponder leaving ECLAC. We could even speculate that to keep him away from the Center of attention he was regularly invited to participate in various economic reports and commissions, starting in the Brazilian and United States Commission and later, through his sudden trips to prepare reports in Venezuela and México.

42After 1954, Furtado’s cyclical notions of capitalism as a means to jettison inefficient productive sectors started disappearing (Furtado 1950); theoretically, Furtado started thinking more in “structural” terms, “obstacles” or “structural transformations”; concepts that could think productive agents embedded in specific social relations and historical contexts, displacing the “rational” maximizing entities espoused in the official economic discourse.

43It followed that a theoretical reconstruction was in order, and accordingly, “underdevelopment” could not and should not be thought of as a historical phase to be overcome, but rather as the outcome of the hegemony of a specific set of asymmetric social relations whose articulation generated many of the disparities and “heterogenous” phenomena once thought of in “cyclical” terms.

  • 27 For the account of those involved within the perspective of development in the Western-centric trad (...)

44Thus, a specific body of conceptual tools had to be constructed and that was precisely what occupied Furtado between 1958 and 1962. As mentioned before, the evolution of Western-centric economic thought (Furtado 1954), inapplicable for the analysis of the Periphery’s development, and in part resembling his own research, appeared in the results of a conference held in 1951 at Chicago University (Hoselitz 1953),27 which Furtado read in the following manner:

The theory of economic development does not fit, in general terms, within the categories of economic analysis. This point of view is quite generally accepted today, and it suffices to quote the seminar on development organized by the University of Chicago in 1951, in which sociologists, anthropologists and historians were gathered alongside economists. (Furtado 1952: 264)

  • 28 There he elaborated An Economic Development Policy for the Northeast (1959b), perhaps one of the fi (...)
  • 29 The three-year plan of the government Plano Trienal de Desenvolvimento Econômico e Social (1963-196 (...)

45The process and evolution of Latin American Structuralism did not appear in “one fell swoop,” as it were. In fact, it was painfully achieved during a period when Furtado, having left ECLAC in 1957, fought many crucial political battles to transform, first the Northeast, in Brazil, as its first Superintendent (1959b),28 and secondly, as the Minister for Planning (1962a).29

  • 30 In Mallorquin (2005b) I offer a detailed follow up of the conceptual changes in the theoretical voc (...)

46After spending a short period at Cambridge University by Kaldor’s invitation, he returned to Brazil where he took up the post of Director for the Northeast section at the National Bank of Economic Development (BNDE). It was during this period that Furtado was to publish The Economic Formation of Brazil (1959),30 perhaps the most renowned text in Brazil if not in Latin America. It incorporated most of the historical sections of the previously mentioned book The Brazilian Economy… (1954). But this latter version came with all the appropriate reformulations to give it a distinctly “structural” flavor.

  • 31 The English version of The Dialectics of Development (1964) appeared as Diagnosis of the Brazilian (...)

47Between the appearance of this book and the period of 1964, when he was exiled and forced to leave Brazil by the Military regime, Furtado fought on many battlefields. He produced books and articles with distinct political and/or academic texts, and some of a controversial nature. The latter can be exemplified by the text entitled The Brazilian Pre-Revolution (1962),31 grouping a series of articles, including one which was used for its title and the most politically explosive; a good example of the former can be seen in Development and Underdevelopment (1961), also a reordering of some of the material found in The Brazilian Economy… (1954), appropriately reformulated, and also containing new material from Furtado (1958 and 1959b).

  • 32 Subdesenvolvimento e estagnacao na America Latina (1966).

48In his first stop of exile in Chile, at the ILPES in ECLAC, Furtado offered a series of conferences. On June 3rd, 1964, he was to present the origins of his theoretical recent position that was to last until around 1972. He represented an economic tendency for Brazil and Latin America, which showed a declining process of growth and industrialization. Here we can observe the notion of the “structural obstacles” and “stagnationist” thesis for the economy as a whole. The conferences initiated the argument which was to become subsequently the book Underdevelopment and Stagnation in Latin America (Furtado 1964).32 The text exhibits all the genealogical conceptual elements that were to appear in F. Cardoso and E. Faletto’s classical text of 1969 Dependency and Development in Latin America. In turn, Cardoso’s book circulated in manuscript form since its inception in 1967, two years before its publication, as an internal document of ILPES - ECLAC (Kahl 1976). The Furtado lectures were attended by various of the names that are later to conform the “dependency approach”: Fernando H. Cardoso, R. Cibotti, N. Gonzalez, José M. Echavarría, O. Sunkel, P. Vuscovic, and F. Weffort, amongst others.

The Dependency Approach33

  • 33 With apologies to the many Latin Americans not mentioned, but see note in Kay (1989: 241) for just (...)
  • 34 In 1956 Furtado published a manuscript entitled A Dependent Economy (1956) [Uma Economia Dependente(...)

49The vision and perspective of the “dependency approach” cannot be reduced to the issue as to when was the category first mentioned. For example, Kahl remarks (1986: 227), that Cardoso first uses the term “dependency”34 in 1965. In Latin America there is an extensive discussion as to whether it’s an “autonomous theory” or the theoretical product (Beigel 2006) of addressing a critique to the economism and “pessimism” of the future of economic development of the region, of which Furtado’s “stagnationist” thesis was an exemplar for that period of his life.

  • 35 See Tavares (1964) and Macario (1964).

50Also, the Economic Bulletin of ECLAC’s 196435 prognosis of certain difficulties on the future process of “industrialization,” could and was turned into a “pessimistic” perspective on the future prospects of the development process as a whole, underlining relatively higher costs in comparative terms and a difficult process ahead when the capital-intensive sectors were considered. The first “stages” in the industrialization transformation/ expansion, of consumer’s goods, substituting imports by local elaboration, apparently seems to have reached a cul-de-sac. Also, it gave rise to abundant uncertainties on the capacity to pay for imports and/or rates of “exploitation” required to pay for them as “dependentists” had pointed out; these aspects of the problematical nature of a “development” process articulated to the world market, overwhelmed the discussions in the dependency approach and Latin American Structuralism, alike.

51In the “stagnationist” book, Furtado presented explicitly the first Latin American “structuralist” model, its content presented all of the conceptual characteristics that would later appear in the writings of those that were to adopt or follow the above-mentioned denomination. It clearly highlighted the social-political forces that are the basis of “internal” or “external” dislocations of an economy and which tended to reproduce the conditions that constituted the “underdevelopment” condition, or so Furtado argued then, notwithstanding the industrial progression in some of the economies in question.

52The text was the culmination of what was to be Furtado’s specific “structuralism.” Although this book exhibited a very pessimistic view of Latin American economies’ future rate of growth and industrialization, today we know that what he was actually criticizing and disapproving of, and confusing with an inherent “stagnation” tendency, was the structural and intrinsic mechanism of exclusion by certain capitalist economic formations which marginalize the majority of the population from the fruits of their technical progress. For the first time, Furtado’s overwhelming nationalistic tone questioned the role of foreign capital in the conformation of the debt pattern and its productive role in Latin America. This was a theme that would never again become peripheral to his intellectual and political activities.

53ECLAC always viewed foreign capital as merely a transitional phenomenon in Latin American economies, required only to undertake the initial process of capitalization, given the low level of “savings.” Furtado felt betrayed by the United States’ promises and policies for the Alliance of Progress during his time at the forefront of development of the Northeast, which in part also explains his pessimistic tone following the Brazilian Military Coup.

54Furtado started with an examination of the “external” factors that he believed crippled Latin American economies (U.S. policy), and then moved on to describe the “internal” limits of the industrialization process within Latin America. In this aspect, he argued that once the easy period of the industrialization process was over (consumption goods), substituting certain imports through local production, the next phase (capital goods) posed inherent limitations to incorporate a broader number of the population within the growth of the economy. Furtado considered that the substitution of capital goods imports with local production required an overly intensive capital function, which in turn stimulated higher level of imports. The other side of the equation showed that it absorbed a relatively low level of the labor force from the “backward” sectors of the economy. Aside from the fact that a higher capital-intensive function required a much higher level of savings, which the upper classes did not and would not supply, given their traditional historical behavior, the market size for its goods hindered the benefits of fully fledged economies of scale. As a result, everything seemed to work towards lowering the productivity level of the economy as a whole -not just the capital-intensive sectors- thus ensuring the stagnation process of the Latin American economies.

55Cardoso and Faletto questioned the inherent stagnation tendency arguing that development is “dependent-associated” on the power alliances of the social classes involved, but capitalism will certainly continue to advance in the region, therefore the actual historical period did not necessarily mean the end of the continuation of the process and the transformation of the societies. The book by Cardoso and Faletto devoted plenty of space to describe the differing historical situations in Latin America, within and between countries and the economic formations, to present the case for the possibility of a “dependent-associated development,” showing therefore the fertile use of some of the elements of the Latin American Structuralism perspective. The theoretical consummation of this flank of the “dependency approach” meant displacing the classical Marxist notions of classes to explain the political agents and process in question, which is a theoretical aspect that would be contested by Mauro Marini in the best part of his work and debates with Cardoso and others.

56Furthermore, Cardoso’s perspective also interrogates and disputes the Gunder Frank’s thesis of the “development of underdevelopment” (1966) as can be seen by Theotonio Dos Santos’s own definition of a situation of dependence:

dependency is a conditioning situation in which the economies of one group of countries are conditioned by the development and expansion of others. A relationship of interdependence between two or more economies or between such economies and the world trading system becomes a dependent relationship when some countries can expand through self-impulsion while others, being in a dependent position, can only expand as a reflection of the expansion of the dominant countries, which may have positive or negative effects on their immediate development. In either case, the basic situation of dependence causes these countries to be both backward and exploited. (Dos Santos 1978: 305).

57But the above synthesis represents the undergoing theoretical transformation by the dependency approach dominated by its “Marxist” vocabulary. Marini’s work (1969, 1972) depicts clearly this aspect vis-à-vis, those who followed Gunder Frank’s vocabulary, and those within the Cardoso and Faletto camp. The political and intellectual period, marked by the Cuban revolution, especially once it was declared “socialist” in 1961, was under the presumed alternative that in the last instance countries in the Periphery had to leave the “capitalist” and “imperialist” trading complex if they were to develop their economies.

58Retrospectively, in reference to the 1964 military takeover, Marini signaled that the “conflict would soon explode” (Marini 1969: 150) “between differing processes of surplus-value extraction -relative and absolute- between those highly concentrated capital sectors” and the small capital “technologically” backward ones.

59Cardoso and Faletto’s interpretation of the period in political terms is similar although the tone and vocabulary differ radically:

Therefore, development, from the moment that it is undertaken intensifies social exclusion and not just of the masses, but also of the economically significant social strata of the previous stage, whose principal alternative was to achieve some form of subsidiary vinculation to the modern monopolist sector and the political domination it installed. (Cardoso and Faletto 1975: 151-152)

  • 36 See accounts by Ourique (1994), Barreda (1994), Sotelo (2005, 2014), and Osorio (1995).

60Marini’s thesis brought to light a specific reading of Marx’s labor theory of value to explain the commercial ties with the international market and the peculiarity of the labor process and the “extraction”/exploitation mechanism dominant in the region. The reading in question forms the basis of his attempt to save an explanation for the use of the category of “underdevelopment” for the Periphery of the capitalist world economy.36

61On the other hand, in its first versions, the theme and vocabulary of Gunder Frank on the mechanism of “appropriation of the surplus” generated by the “satellites” by the “metropolis” seems to be the product of today’s classic works of Paul Baran Monopoly Capital: An Essay on the American Economic and Social Order (1966) and The Political Economy of Growth (1957). The notion of “surplus” was not given much explanation or elaboration on the part of Gunder Frank, simply assumed as what could be siphoned off from the “satellites” in distinct historical periods by the “metropolis” given the power asymmetries and the imperialist strategy. The asymmetric contradiction: “metropolis” / “satellite” could also be an internal occurrence and differentiation within the same region or country. It was this mechanism that explained the oscillating manner by which a specific expansion or development of a certain region “underdeveloped” its “trading” or commercial counterparts.

62There is sufficient literature in the Western-centric world that discussed, since its inception, Gunder Frank’s thesis, empirically and conceptually. In the mid-1960s, part of those arguments seems to echo in Latin America, when the “Latin America’s structuralist” stagnationist thesis was discussed. Among the proponents of the dependency approach a profound theoretical discussion arose as to the pertinence of the “heterogeneity” notion developed by Latin America structuralists and the power asymmetries in the countries and regions.

63The regional articulation to the world market became the center of the analysis via the reconstruction of Marx’s theory of value, therefore establishing a conceptual mechanism that could explain different and distinctive processes of “extraction” / “appropriation” of the surplus among and between diverse social formations, some capitalists or proto-capitalists and so-called “precapitalist” ones (the notion of “heterogeneity” underscored by Latin American Structuralism). Simultaneously, this would provide the conceptual vocabulary to explain the internal difficulties of the Periphery to continue its development path notwithstanding the “underdevelopment” condition.

64When talking about the “central economies” Marini argued that the:

general rule has been the intensification of the exploitation and therefore, accumulation through the real cheapening of the labor force, achieved principally through the reduction of the value of the goods that are required for its subsistence (…) the constant devaluing of the labor force has constituted the decisive element in the production and capitalist accumulation of the central economies (…) it is not rigorously the case in the capitalist economies of the Periphery (…) these economies have undertaken its process of accumulation fundamentally based in the production of absolute surplus value (…). In other words, the increase of the surplus labor time tends to be realized in fact without altering the necessary labor, that is by not reconstituting the value to the worker which he creates during this setting; therefore, what would seem relative surplus value, frequently is an anomalous case of absolute surplus value. (…) Lets make clear the point: the augmentation of the surplus time-work always signifies a greater exploitation of the labor force (Marini 1974: 114-115, my emphasis) […] Still, it is possible to identify a mode of increasing surplus value, by which the reduction of the wage is not in correspondence with a real decrease of the necessary labor time. This case tends to be exceptional in the advanced countries, but embraces a generalized characteristic in backward countries, like Brazil, where it configures the super-exploitation of labor. Exclusively for the purpose of simplification, in the text, we use the expression of absolute surplus value also to denote this last modality. (Marini 1974: 148).

  • 37 Marini (1978), Cardoso and Serra (1978), Serra and Cardoso (1978).

65Kay’s reading of Marini seems to uphold this interpretation that “super exploitation is not identical to absolute surplus-value” (Kay 1989: 145). Sotelo has recently underlined once again the political importance of the Marini/Cardoso-Serra debate at the end of 1970 :37

In contrast to Marini, Cardoso and Serra conceived of labor super exploitation as a conjunctural phenomenon and not as a process endogenous to capital accumulation in dependent economies. In the same manner as Ricardo (whose work Marx criticized thoroughly), moreover, they calculated the increase in the rate of profit in a way that conflated the rate of surplus value with the rate of profit. (Sotelo 2014: 544)

66In Marini’s interpretation, the Brazilian “military dictatorship” could be seen as the “inevitable consequence of the Brazilian capitalist development” in its “desperate attempt to open up new perspectives for its development” (Marini 1974: 97), with its repressive and exploitative labor laws.

  • 38 Dostaler (1980), Mañán (2012).
  • 39 From a different perspective, notions of the “Pareto Optimum”, efficiency and self-adjustment equil (...)

67Another way to read Marini’s concepts of surplus-value and super-exploitation is not to question its “consistency” with respect to a supposedly Marxist tradition, as if the notion of the labor theory of value is something unproblematic.38 It is precisely this line of thought that the Latin American structuralist perspective developed, problematizing Marxist and neoclassical notions of value and price alike. It argued that the idea of power asymmetries and exploitation between and within production units and the labor force did not require a general conception of value to explain certain specific inequalities and indefensible distributional patterns, and in that sense Marini’s argument can be defended as a consistent manner to examine the labor process and power asymmetries in certain sectors and regions of the world (Sotelo 2014). In other words, this means that it is the whole classical political economy tradition which has to be overhauled and questioned. A reading of the period and its authors in a structuralist fashion converts the notion of power as its center of analyses and examines the differing mechanism by which social relations delineate and determine the possession in separation of certain of the conditions of existence of the productive units, mechanism by which a “market” and a commodity circulation emerges. In turn, this mechanism explains how the exchange process determines the distributional context-pattern between different agents. In this sense, there is no market in general and no necessary articulation of certain social relations to specific forces of production. These are transitional and contingent upon certain historical cultural traditions and specific processes. The heterogeneous nature of much of the “economy,” both “developed” and “underdeveloped,” belies the idea that there is a unique way to organize the productive process and achieve efficiency and equality.39 That is one of the central ideas that Latin American Structuralism developed theoretically through its historical analyses. Structuralism has always sustained that its perspective theoretically supersedes (in Hegelian fashion) the “classical” and post-Keynesian school of thought. It is worthwhile, then, to observe some of its vocabulary through the work of Furtado. By the mid-1960s Furtado said:

Economic structuralism (a school of thought that arose in the first half of the 1960’s amongst Latin American economists) has as its principal objective to take into consideration the importance of the ‘non-economic parameters’ contained in macroeconomic models. Given that the behavior of these economic variables depends mostly on these parameters they have to be the object of meticulous study. (Furtado 1967: 81)

68Thus, the emergence of economic plans, for example, implied “land reforms” (Furtado 1969, Chapter XXIII), so that the “structural picture” could be modified and the social agents in question be freed to take up better remunerated positions within the social division of labor, which in turn would presumably favor a more equal distribution of incomes and resources. It assumed an advancement in the “knowledge of real structures,” so that on many occasions it demanded the supersession of “conventional economic analysis” (1969: 297). Furtado insisted that his perspective had “no direct relationship with the French structuralist school, whose main orientation was to give importance to the synchronic axis of social analysis and establish the ‘syntaxes’ of the disparities in social organizations.” (Furtado 1967: 80-81)

69Traditional conventional economics cannot take account for, nor explain the existence of “structural obstacles” or “heterogeneous agents.” Therefore, the perspective rejects the notion of the existence of “homogeneous factors with the same technological time horizon” (Furtado 1969: 102). The problems of “underdevelopment” needed to incorporate ideas of a non-unified labor market and the simultaneous existence of diverse productive functions (heterogenous), depending on the “surface of the economic structure in which the productive agent is inserted” (Furtado 1969: 102). The theoretical emphasis, therefore, tries to destroy systematically the traditional appearance of these problems within separate compartments, be “economics” or “history.”

70In a sense, Furtado rebuilt into a theoretical concept a notion that for Perroux appeared to be an obstacle or ephemeral phenomena that needed to be reformed:

Structural inflation has adulterated the very notions of our science; that is to say, it has warped or broken the modern instruments which are necessary not only for the diagnosis, but also for the treatment or operations that are indispensable for its cure.” (Perroux 1957: 263)

  • 40 There seems to be a familiar resemblance of sorts in the Western-centric literature, Aujac Henri (1 (...)

71Furtado’s theoretical deductions had already appeared in his description of the evolution of the development of Brazil during the early 1950’s in which he distinguished between “dynamic” and “static” notions of inflation, a consequence of power asymmetries between agents and sectors, which later with the work of Noyola (1956)40, were to be coined as the “structuralist” conception of inflation, underlining power asymmetries between different agents-sectors in the economic formation, in other words not a monetary phenomenon.

72In this sense, the 1954 book The Brazilian Economy shows the initial steps of a theoretical transformation that can also be found in Perroux’s idea that specific and distinct economic units have differing “arenas,” necessarily antagonistic towards each other. The so-called “equilibrium” or “relative peace” is the consequence of the hegemony of a definite productive unit or sector, which manages to establish a hegemonic role over a specific economic space and thus over other economic sectors (Perroux 1950). In other words, it is a question of the differing power asymmetries.

73Retrospectively, developmentalists and their critics have to reckon with a post-WWII period of growth, which before the “lost decade” (1980) showed rates of “growth” that have not been attained since. But the real absentee, during this period, are the structural reforms required to promote the “development” of the region, which can be said are the main dark aspects of the history during the epoch.

74The historical transformations of land and fiscal reforms were never in the political agenda, distributional aspects that would have provided the much need “demand” to defeat the so-called limitations of the “market.”

75Ever since the mid-1960s, structuralism policies on development have been evaluated in terms of its policy ideas towards the industrial sector, and yet that aspect forms part of a much wider perspective of the role of the state in transforming the social and political horizon. The differentiation and apparent conflict between an “easy” phase of the import substitution “industrialization” devoted to the elaboration of the consumer or nondurable goods vis-à-vis the “difficult” stage that entailed the substitution of the “machinery” or capital sectors forgets that the issue was related to a change in the “composition” of the goods imported:

the substitution process does not propose the diminution of the global quantum of the importation; the diminution, when it is achieved, comes imposed by the restrictions of the external sector and not by design. From these restrictions (absolute or relative) arises the necessity of producing internally some of the goods that before were exported. (Tavares 1964: 5)

76The Periphery, tied to the limitations ofits inherent external disequilibrium, given the tendency of the deterioration of the terms of trade and incomes, had to concentrate in developing certain sectors and geographical areas that could be sustained by a series of closely articulated policies, what later (Hirschman 1963) would coin in terms of “backward and forward linkages” and the positive feedback all along the productive and sectorial chain.

77These aspects also tend to cloud an issue, which is generally appraised in terms of the respective levels that can be deduced from capital-output and/or capital/labor ratios that present the heterogeneous horizon of those economies. And yet the structuralist perspective emphasized that “productivity” and investment had to be examined in the context of the power asymmetries of the production units and regions involved, that required specific analysis in every case, by which it practically sidestepped the so-called Cambridge capital controversies and “re-switching” (Harcourt 1974) of the 1960s in the Anglo-Saxon universities (Boinavosky 2013). The whole notion of development implied a distinct version of thinking the “increase” of “productivity” levels which meant organizing the labor process in a different manner, as well as promoting changes in land tenure or “structural reforms” in general: the dynamic view implied that even if some nations produced at a higher cost some of its products instead of importing them, it would generate in turn new production units and other necessities, changing the patterns of production and the “demand” in question. This way of posing the problems in ECLAC demonstrates once again that they had no need of mainstream economics, nor proto-Keynesian visions: prices and incomes were a contingent product of the power asymmetries between and within certain sectors and regions. Structuralists assumed the undecidable dilemma trade-off between a relatively higher level of incorporation of the population towards the more productive of modern zones, or specific sectorial higher wages; it was a dilemma that had no easy answer, whether in the “Paretian optimum,” or “second best choice” (Little 1982) of the capital intensity required, it simply could not be deduced in advance.

  • 41 A book composed of a series of meetings in 1973-74 at the Autonomous University of México. See also (...)

78This vision for amplifying the radius and scope of modern “exchange” and commodity relations was to be criticized by Marxist theorists (Bernal Sahagun et. al. 1980),41 and the “dependency approach” alike. Simultaneously, neoclassical criticisms during those years highlighted the investment strategies but for different reasons.

79The historical confrontation between, on the one hand, the “Dependentistas” who claimed that structuralists aspired to develop “capitalism” aiding a “comprador bourgeoisie” (a backward and corrupted capitalist class) with profound state interventions, and on the other hand, neoliberal ideas underlining high level of protection and certain costly experiments and “state interventions” proclivities. This in turn limited the efficiency of the market through the “crowding out” effect of private capital investment, which obscured structuralists’ policies and views on the role of the “market” for transforming Latin American governments strategies. It was argued that the states’ intervention turned the whole process of investment and growth into a vicious negative circle, which lead to high levels of external debts.

80By the end of the 1970s, it was clear that “development” was not synonymous with “growth,” implying among other things a series of reforms or structural transformations, reducing income inequalities between sectors, differences between various areas and regions, which could not be conceived independently of recovering and institutionalizing some form of a “democratic” regime. Thus, the 1980 lost decade of growth in Latin America withstood all the political struggles and various transitional processes which the region had to undergo to reach a form government based on a more open and competitive “democratic” process (Foxley 1988).

Under the Sweltering Heat of the “Washington Consensus”

81In the 1980s, with an increasing external debt (Bulmer-Thomas 2011, Sunkel 1991), the Periphery would show declining rates of growth and development. The international environment had changed drastically after the U.S. left the dollar free of its gold counterpart, turning to relatively flexible exchange rates. In turn, the higher petrol prices during those years created a massive liquidity that was to be “lent” at very low interest rates to any country willing to undertake the borrowing. An inflationary process surged that was to leave the Periphery in a very weak situation to negotiate its external debts. The Brady plans to exchange bonds for external debt (Bulmer-Thomas 2011) did not really solve the insurmountable payments with the level of interest rates then in process, which with the declining rates of growth of the industrial Centers generated a reduced level of imports from the Periphery. That explains the negative rates of growth during the so-called “lost decade” of the 1980’s, although it can be taken to mean until the end of the 1990s in some countries (Perez and Vernengo 2010).

82The decline of state support for capital investment/construction (Ramos 1991) can certainly explain the lower rates of growth and development in the Periphery since the inception of the “Washington Consensus” drive and the appearance of the so-called “good economics” (Harberger 1995) and the “Chicago Boys” in our intellectual horizons; foreign direct capital did not occupy the vacuum left by the public and states’ subsidies to local industry; the childish argument about the “crowding effect” by state interventions and subsidies took many decades before it was questioned (Sunkel 1991, Ros 2014, Sosa et. al. 2013) given the disastrous consequences for local industrial sectors and the economy in general.

83The process stimulating research and development in local industries has become one of the main aspects on which the state in the Periphery is beginning to concentrate. The so-called market forces have not been forthcoming with their benevolent fruits as the globalization and “Washington Consensus” initially promised. The great part of the investment and research is generally undertaken and “placed” strategically in “developed” economies (Thompson and Hirst 1996), leaving for the Periphery other less important tasks of the productive process in the best of cases when the direct foreign investment is undertaken by the big corporations.

84The surplus of foreign currency to pay for the debt and interest in the current account, allowed the foreign exchange to be sent home by the great migration drive towards the industrial countries, given the absence of local alternatives: the Periphery was converted into a vast camp of labor export sanctuary for certain economic sectors in the “Center countries.” In contrast to capital flight and unregulated freedom by the “globalization” drive, the migratory forces were under the constant persecution and racist invectives of the local Center states, which was to be intensified once a downward growth tendency was perceived, lessening their capacity to increment the “price” of its labor.

  • 42 Rodriguez says, “enriched with the advances and understanding of the ‘endogenous’ techni- cal progr (...)

85Invariably in ECLAC a discussion arose as to the mode of sustaining and generating higher “productivity rates” and the industrialization process. It included a much-reconsidered reflection on the “openness” or otherwise of the recent decades of the “industrialization” drive, which as mentioned before was not just a “neoliberal” criticism. The trends and direction of the generation of endogenous local technological rationalities was the starting point with the work of Fernando Fajnzylberg (1983) La Industrialización Trunca de América Latina, underlining the importance of developing an “endogenous nucleus” and “creative environment”42 with the corresponding social and political alliances to attract some form of foreign capital to intensify the accumulation drive, which really meant concentrating on sectors with high capital density, in tandem with a much more “open” and “free” environment heretofore in the region. Although the discussions linger on whether the “structure” of the final demand and incorporation of the labor force could be better intensified if industrial innovation strategies concentrate on the medium or smaller production units, the work of Sunkel in the early 1990s (Development from Within: Toward a Neostructuralist Approach for Latin America) offered an interesting alternative theoretical twist. The work is presented as a supersession of Prebisch’s and ECLAC’s postures on its vision of the articulation of the Periphery to the world markets and the corresponding industrialization process involved.

  • 43 Cypher (1998), Marangos (2012), Kregel (2008).

86By then the region had to attune itself to what was called the “Washington Consensus”43 if it was going to receive some foreign lending or respite on the drain of its capital towards the industrial Centers. The hegemonic neoliberal regime came hand in hand with the imposition of the “Washington Consensus” and the myth of the globalization process. The “reforms” imposed, implied it had to open up its economies lowering all rates of levies on imports, sell and privatize most of its public utilities sectors, and generate a surplus in foreign exchange. This meant advocating an export drive that in the short run could only be undertaken by the primary sector which generated the commodity boom export, whose role in the last instance became the Center piece of a strategy reinstating the long run sustainable uncertainties on the nature of the transformation of the economies in question.

87The opening up of the economies of the region to the world market with the promise to receive foreign investment soon showed a declining tendency, after an early surge by big international corporations to buy the heretofore state public utilities (“un-manageable”, “deficit”, and “unproductive” as the tedious neoliberal jargon sung), followed by the cyclical arrival of foreign capital searching for higher bond rates earnings in the Periphery.

88Most of the adjustments and reforms consequent on the opening up of vast economic sectors to the international competition had also to do with the absence of macroeconomic “equilibriums” that were thought to be generated by the state’s uncontrolled expenditure, requiring important fiscal reforms that had also been a basic postulate of the structuralist modernizing strategy.

89In certain arguments it was a question of the distance or “non-convergence” between Latin America’s growth patterns, specially of its industrial sectors vis-à-vis the benchmarks or model of the industrial Center growth rates; others argued that transmission of knowledge and research alternatives had to be examined given that differing productivity rates could not be explained solely on factor productivity in question.

  • 44 For the typical criticism, see Lal (1983).

90Sunkel (1991) was recuperating the structuralist vocabulary with the prefix “neo-structuralism,” emphasizing and questioning the critique by neoliberal ideas that its strategies were inefficient because it opposed an open market44 and the freedom to interact and compete among different countries. If Prebisch’s classic formula (Prebisch 1949b) stated that post-WWII process of development should take an “inward” direction for the Periphery after a century of an “outward” drive, Sunkel (1991: 23-59) generated an interesting twist to the issue. He argued that Prebisch’s dictum of an “inward looking development,” did not put sufficient weight on the particularities of accumulation, emphasizing the impulses that were generated by the expansion of the home market, and the replacement of local production by imports of goods previously imported.

91This last formulation leads to a strategy, which rests in the amplification of the internal consumption and the local reproduction of the consuming patterns, industrial production and technology of the Centers, via the import substitution industrialization, fundamentally oriented by a narrow and skewed internal demand, configured by an internal unequal distribution of income. The industrial strategy from within has very different implications (…) in the words of Fajnzylber (1983), of an ‘internal creative effort to configure a productive structure that is functional to the needs and potential national specificities’ (…) internal creativity requires (…) a greater and contiguous participation and interrelation between different agents and incentives: big industrial plants linked to medium and small enterprises, scientific and technological infrastructure (…) Once the communication, interaction and fluidity of these actors, instances and levels of decision get consolidated as a national practice, it would have conformed integrally what is known as the ‘dynamic technological endogenous nucleus’. (Sunkel 1991: 64).

92Therefore, Sunkel’s Inward-Looking Development to Development from Within, exhibit a search for a political and theoretical option to counter the so-called “globalization” and “Washington Consensus” policies.

  • 45 See Leiva’s critique (2008).

93It seems to displace the question of the home market’s limitations to absorb technological progress, culminating in the idea of generating an endogenous technology change emphasizing reforms and structural transformations now viewed in terms of the new forms of articulating the local productive units and the potentially conceivable associations with the world market corporations.45

  • 46 Booth (1987, 1989), Peden (1989), Cerretano (2009).

94First of all, the “structuralist perspective” and its policies were never the evil green monster anti-market or state Centered that neoliberalism narrative claimed; the post-WWII economic environment of the period imposed on some countries exchanged control and state subsidies for industrial and other concerns, which were not very different to what had occurred during the evolution and growth of the industrial Centers and inter-war years.46 On the other hand, the social and infrastructure development conform to the patterns observed in the industrial Centers own evolution as Chang’s (2002) book reminds Western-centric academia.

95In that context (Fajnzylberg 1983) proposed concentrating on developing the uppermost technological phases of industry, which generated an important debate with those whom argued instead for the support of the small and medium size production units, given its higher rate of labor incorporation to the productive circuit, which had a more positive effect on the economy as a whole and to the productivity level generated by each unit of capital or labor during the growth process.

96Development from within recovered some of the various alternatives to think and propose the new ways to incorporate and defend for the Periphery the fruits of its own technological progress, transforming the once apparently closed circuits between local capital and their foreign counterparts, into a more hospitable and competitive environment were the “state” would use other types of leverage to sponsor the industrialization and transformation of the Periphery. What neoliberalism policies forgot in its “state Centered” invective in the region were the authoritarian and undemocratic regimes that existed during the 1970s and 1980s, which created many of the obstacles to the “developmental process” required for a higher “growth” drive to be undertaken. Neoliberalism’s policies were complicit with the Pinochets of the region that protected and sponsored so-called “individual enterprise” at whatever cost in terms of civil liberties.

  • 47 Graciarena (1976), Wolfe (1976).

97Simultaneously by the end of the 1970s in Latin America, perceptions on the undemocratic regimes started to differentiate between “styles” or “approaches” of development (Gutierrez Garza 1994),47 as well as O’Donnell’s (1982) notion of “state bureaucratic-authoritarism.” They initiated challenging the then quite dominant conceptual horizon of the left in Latin American of the function of the state as simply an apparatus representative of the bourgeoisie “interests.”

98Under the dictates of the period “Washington Consensus” we find a peculiar historical phenomenon occurrence in the Latin American region, especially if gauged by its intensity: the much vaunted process of inclusion and development, represents a period were the region intensifies the political and economic asymmetries, sponsoring the expulsion and exportation of labor: the much needed surplus of foreign exchange to pay for the region’s external debt had been resolved through the mechanism of the “exportation of labor force” to the Center countries.

99Subsequently the social and political struggles in the region confronted the persistence of the neoliberal strategies, under a few political regimes which contest some of its main tenets: Venezuela, Brazil Argentina, Bolivia, and Ecuador, which more recently have presented an off course with vengeance with the return of Bolsonaro and the Macri regimes in Brazil and Argentina respectively. At least rhetorically if not in real terms, Bolivia, Ecuador, and Venezuela strove for new policies with a more “distributive” perspective until the recent changes, sponsoring an intensification of certain rates of growth and incorporating the inclusion of the local populations in their development objectives. But we must evaluate these alternatives in the context of what has happened with the rise of a whirlwind of neoliberalism and its consequences. The level of inequality in the region has not changed practically in the last twenty years. Sectorial and geographically debates hinge on its amplitude (ECLAC 2010, 2015).

  • 48 CEPAL-Cimoli (2007), Cimoli (2005), Cimoli y Dosi (1995), Cimoli, Primi y Vergara (2005), Cimoli y (...)

100Weak rates of growth globally again seems to be a basic limitation but also the structural reforms in the region have been delinking the productive processes internally by sale to foreign enterprises of certain productive units, which sponsored “commodities boom” primary exports displacing backward and forward linkages, by prioritizing the agricultural -export boom- without its “industrial” partner side.48 Also the land tenure and family agriculture have not received the subsidies or collateral for its sustainability; in some countries, agriculture has had to withstand the most retrograde of policies attempting to appropriate and concentrate the land in fewer units; its forms of possession in separation of some of its conditions of existence do not present any “modernizing” tone in any sense. On the side of its external account, the region presents a much more stable and consistent behavior, having tackled with success the 2008 financial meltdown in the U.S.

101ECLAC’s much professed “hour of equality” (ECLAC 2010) corroborates much of the prognoses of a weak growth rate and yet relatively stable macroeconomic parameters. Reforms are needed to enhance the development in the region. But the elements which new policies should incorporate have to do with transforming the actual forms of possession in separation of the production units, looking for alternatives in community projects and other forms of state and cooperatives participation. Macro demand management policies are not enough to change the actual logic of neoliberal “deregulations” which brought about a surge of economic, and much more dangerous, social polarization forces, marginalizing extensive sectors of the population, which previously had been slowly incorporated into the life of the nations.

Concluding remarks

102The long trajectory of Latin American theoretical discussions presented have not concluded. I tried to describe a certain peculiarity, emphasizing its distinctness with respect to Western-centric discourse, and given the absence of a privileged or sacred perspective, construction of theoretical bridges can be undertaken. Recently, under the authorship of Pérez (2015) “neostructuralism” and “heterodox” economics are placed as discussants of each other as to their viability of their articulation. Whatever the resulting synthesis which we might reconstruct, Latin American “structuralism” finds itself placed in the difficult situation of having to choose between a discourse that understands the “economy” as simply portraying diverse and contrasting “elasticities,” or an antagonistic power asymmetric space between agents. Much (time!!!) was lost by Prebisch himself, who did not close the dilemma until one of his last books (Prebisch 1981) Capitalismo Periférico: Crisis y Transformación, underlining the heterogeneous nature of the agents in question, and the power asymmetry, which engendered them. But there is still some hope: Western-centric post-Keynesianism has offered something in that direction: “Contrary to neoclassical theory, and contrary in fact to what many Marxist and classical economists claim, there is no necessary inverse relationship between real wages and profits rates” (Lavoie 2009: 122), a basic tenet of the deterioration terms of trade which surrounds the work of Prebisch, which equally can be bolstered by the “explorations” on “disequilibrium”, found in the Backhouse and Boianovsky book (2013), as well as the reappearance of the “heterogeneous agents” (Hoover 2012).

103But the political reforms required in the region require reconstructing a much disarticulated “playing” field, which means that we must transform the way by which agents, regions, and countries “possess in separation” the conditions of their livelihood; it’s not just the question of resuscitating the role of the “state,” it also has to do with finding ways of incorporating the local populations into their own reconstruction: which brings us back full circle to the initial question of what we mean by “development.”


1 We generalize Connell’s notion of the “colonial” asymmetries: “Knowledge about a colonized society is acquired by an author from the metropole and deployed in a metropolitan debate. Debates among the colonized are ignored, the intellectuals of colonized societies are unreferenced, and social process is analyzed in an ethnographic time-warp” (Connell 2007: 44).

2 Origin of the Anglo-Saxon or Eurocentric discourses.

3 For the Anglo-Saxon story, see A. O. Hirschman’s classic article (1981).

4 Escobar (1995), Esteva (1992), Mallorquin (1998).

5 Later, it will include “the Caribbean” as Economic Commission for Latin America and the Caribbean.

6 See, for example E. Iglesias’s (Executive Director of ECLAC in the 1990’s) recollections of the event during his university days in Uruguay (Dosman 2006).

7 Symptomatically, Prebisch rarely uttered the term “underdevelopment” (“subdesarrollo”) until the 1970s; he used “developing” economies, in process of “development.”

8 See also Kay’s note number 5 and 8 of Chapter 6 of his book (Kay 1989: 246). Ironically, up to date, the best account is a book written in English by Cristobal Kay. Kay’s PhD dissertation director was D. Seers; Kay was also alumni to O. Sunkel’s university classes. Unfortunately, given the language “barrier” and the power asymmetries among and within the so-called “knowledge communities”, the “dependency approach” in Western-centric universities is taught through the vocabulary of Gunder Frank’s books (1966, 1967). See also Palma (1978), Love (1990).

9 See next chapter for a detailed analysis of Prebisch’s ideas for the period 1943-1949.

10 The notion does not exclude its presence. Many contemporary commentators, without acknowledgement are really conflating the Rumanian Mihail Manoilescu’s (Love 1996, 2011) notion of “unequal exchange,” with Prebisch’s concept of the deterioration of the “terms of trade.” Notice that the notion of “fruits of technical progress” is an appropriation by Prebisch of a category found in the work of J. A. Schumpeter, transformed into a different meaning.

11 Simultaneously, Prebisch mentions notions such as “disparate demand elasticities” and power asymmetries as the source of the deterioration in question. It is my contention throughout this book that the notion of “elasticities” in fact only clouds the real political and theoretical issue: power asymmetries within and between agents: countries, regions, distinct productive sectors, and labor segments. Hopefully as the reader prolongs their journey through the book, it will be made clearer why I leave for later the explanation of the use the term “class,” since it pertains to a distinct theoretical construction which supersedes certain aspects of Marxism itself, related to the notion of “heterogeneity,” a theoretical consequence of Latin American Structuralist thought. See further ahead Chapter “All That Is Solid Does Not Necessarily Melt Into Air.”

12 On the notion of “vicariousness,” see Maffeo Pantaleoni Pure Economics (1957, English version, originally 1889), third part; Prebisch’s teacher, Roque Gondra, translated the 1889 Italian version of the text during 1916, although presumably Prebisch read the text in Italian.

13 That is “a continuous succession of disequilibriums’” (Prebisch 1948a, in Prebisch 1991c: 499, my emphasis).

14 And yet Prebisch could not help himself. In 1953, after many recognized economists of the “North” from Western-centric universities visited Brazil (G. Harbeler, J. Viner, L. Robbins) with the aim to combat and counter ECLAC’s ascendancy, E. Gudin (1953) wrote a series of articles in O Correio Da Manha with the title: “The Mystical Planification,” to which Prebisch responded with: “The Spontaneous Mystical Equilibrium of the Economy” (Prebisch 1953a): “its proof that Dr. Gudin continues to believe in the tendency towards equilibrium, inherent in the economic system, when perturbing elements are not introduced in the economy. I don’t believe in all of that. The cycle is the typical form of growth of the capitalist economy, that is to say, an uninterrupted succession of disequilibriums.”

15 For more details see the chapter “Celso Furtado and Development: A Brief Outline (1950- 2004).”

16 Althusser (1969) insisted that the past should not be read in terms of the present, a “future anterior”; Marx’s Capital is a theoretical product that repudiated his “Hegelian” days.

17 According to Jolly, it should be more “properly called the Singer-Prebisch thesis after the careful detective work of John Toye and Richard Toye showed that, strictly speaking, Hans Singer’s work preceded that of Prebisch” (Jolly 2008: 65).

18 The presentation of Prebisch’s ideas can be followed in chapters 1 and 2, which take into account his theoretical evolution in much more detail on various aspects, making the reading of them once again an important task in the Periphery and Center alike. For the best unsurpassed up to date interpretation, see Rodriguez (1980). For example, the narrative offers two versions of the thesis on the deterioration of the terms of trade, the “cyclical” and the “accountable” one. But my own contention is that those versions are not separable, only at the cost of making indefensible Prebisch’s theory of prices-value.

19 “empeoramiento en los términos del intercambio comercial”.

20 “Problemas del Desarrollo Económico en América Latina,” Third Conference, October 25th, 1951. Spanish readers should have known better, English readers on the other hand, had to deal with a relatively shabby translation of 1949c and 1951. As a rule, the United Nations documents translate them into English and French. (“Crecimiento, Desequilibrio y Disparidades: Interpretación del Proceso de Desarrollo Económico” in: Estudio Económico de América Latina, 1949 - E/CN.12/164/Rev.1 – 1949c and the 1951 Problemas Teóricos y Prácticos del Crecimiento Económico, CEPAL, México, 28 mayo E/CN.12/221. On the other hand, the classic text of 1949b El Desarrollo Económico de la America Latina y Sus Principales Problemas E/CN.12/89 (May), under a very close scrutiny by the U.S. government fared relatively better in English. Perhaps Prebisch, given the load of work and strain under which he was working did not check the translations.

21 See Mirowski and Plehwe (2009). Hurwicz, as early as 1940, found the economists at Chicago “very reactionary and orthodox. I met Viner, Knight and the other local celebrities… and didn’t think very much of them’” (quoted in Mirowski and Nik-Khah 2017: 75).

22 The work by Bielschowsky (1988) shows the richness of the “economic thought” in Brazil, although originally it is a product of a doctoral dissertation in English.

23 For more details see third chapter “Celso Furtado and Development: A Brief Outline (1950- 2004).”

24 A economia brasileira. It is ironical that a book that was dedicated to Prebisch was to cause him so many problems at ECLAC; his views were used to put pressure on Prebisch and the International Organization, but it must be remarked that it is in great part at odds with the economic categories then dominant, including Prebisch’s.

25 In the English language the closest examination of this type was done by Meier and Baldwin (1957).

26 See chapter ahead dedicated to his work: “Celso Furtado and Development: A Brief Outline (1950-2004).”

27 For the account of those involved within the perspective of development in the Western-centric tradition, see Gunder Frank (1966).

28 There he elaborated An Economic Development Policy for the Northeast (1959b), perhaps one of the first books to have used the thesis of the deterioration terms of trade within different regions (Northeast and Center-South) of a single country’s economic formation. See details in Mallorquin (1996) and Love (1996). Prebisch’s notion, always a power asymmetry phenomenon, forms part of the evolution of regions and economies: “if agriculture progresses technically by its own impulse independently of the demand in the city (…) lower prices of the primary products in relation to the industrial prices,” will generate “an internal deterioration of the terms of trade”… “similar… to the deterioration of the international terms of trade”… “the fruits of technical progress applied to agriculture will be transferred to the industrial sector, receiving primary raw material and foodstuff at lower prices.” (Prebisch 1951a: 12)

29 The three-year plan of the government Plano Trienal de Desenvolvimento Econômico e Social (1963-1965), elaborated by Furtado, was attacked by all social forces.

30 In Mallorquin (2005b) I offer a detailed follow up of the conceptual changes in the theoretical vocabulary of this book in relation to its original version: The Brazilian Economy… (1954). See also chapter on Furtado ahead.

31 The English version of The Dialectics of Development (1964) appeared as Diagnosis of the Brazilian Crisis (1965), which can also be put in this tradition, but it is a better and very well-developed case for explaining the unification of the regressive political and social forces of the right against the government, which he foresaw with a military takeover, which unfortunately turned out to be true. Willard Barber (1966), reviewed the English version of the Dialéctica de Desarrollo (Furtado 1964), alleging Furtado’s “deep Leninist ruts.” (Barber 1966: 196). A positive review in English can be seen in Donald J. Harris’s text “Diagnosis of the Brazilian Crisis” (1966). It is interesting to mention that the author was the father of Kamala Harris, who is the 2020 vice president of the U.S.A. (see Meireles 2020).

32 Subdesenvolvimento e estagnacao na America Latina (1966).

33 With apologies to the many Latin Americans not mentioned, but see note in Kay (1989: 241) for just a few of the names that formed part of the vast and fertile discussions in the region, the majority of which were exiles, first moving and escaping from the repressive Brazilian military regime in 1964, and then repeating the process from Argentina’s, and Chile’s counterparts in the early 1970’s. In their great majority the exodus culminated in their reunification in Mexico.

34 In 1956 Furtado published a manuscript entitled A Dependent Economy (1956) [Uma Economia Dependente]. Its contents are part of chapters 2, 3, 4, and 5 in Furtado 1954 The Brazilian Economy.

35 See Tavares (1964) and Macario (1964).

36 See accounts by Ourique (1994), Barreda (1994), Sotelo (2005, 2014), and Osorio (1995).

37 Marini (1978), Cardoso and Serra (1978), Serra and Cardoso (1978).

38 Dostaler (1980), Mañán (2012).

39 From a different perspective, notions of the “Pareto Optimum”, efficiency and self-adjustment equilibriums are difficult to sustain (Nadal and Ackerman 2004).

40 There seems to be a familiar resemblance of sorts in the Western-centric literature, Aujac Henri (1954). Noyola reviewed Furtado’s A Economia Brasileira (Noyola 1955).

41 A book composed of a series of meetings in 1973-74 at the Autonomous University of México. See also Guillen (1975, 1976).

42 Rodriguez says, “enriched with the advances and understanding of the ‘endogenous’ techni- cal progress and innovation” (2006: 367).

43 Cypher (1998), Marangos (2012), Kregel (2008).

44 For the typical criticism, see Lal (1983).

45 See Leiva’s critique (2008).

46 Booth (1987, 1989), Peden (1989), Cerretano (2009).

47 Graciarena (1976), Wolfe (1976).

48 CEPAL-Cimoli (2007), Cimoli (2005), Cimoli y Dosi (1995), Cimoli, Primi y Vergara (2005), Cimoli y Stiglitz (2008), Cimoli, Nelson y Stiglitz (2006), Cimoli, Dosi y Stiglitz (2008a), Dosi, Fagiolo y Roventini (2008), Dosi, Orsenigo y Labini (2002).


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