The Cycle of Dependency 50 Years Later

Tensions and Crises

Marini associated the imbalances of Latin American industrialization with unequal exchange and specialization in the provision of raw materials. He argued that the development of manufacturing in Brazil, Mexico, and Argentina did not eliminate the drainage of resources but reproduced this adverse factor in the manufacturing sector (Marini, 1973: 16–66). He postulated the existence of a cycle of dependency that prevented the kind of development that occurred in central economies and described this obstruction during the various phases of accumulation in terms of a model inspired by Marx’s Capital (Marx, 1973: 27–47). He portrayed the way financial resources (money capital) were transformed into inputs for industry (merchandise capital), which facilitated the superexploitation of workers (productive capital). He also analyzed in detail the tensions brought about by this process (Marini, 2012: 23–35). He noted that the preeminence of foreign capital encouraged the transfer of value abroad (e.g., in the form of royalties, patents, and profits), thus limiting the scope of accumulation. He noted that multinational firms complemented this absorption by making huge profits from subsidies, tax exemptions, and the provision of outdated machinery, suggesting that foreign acquisition of inputs and equipment increased the loss of foreign exchange.

Marini’s main focus was production and the extraordinary profits achieved by large companies by paying workers less than the average cost of labor in central economies. He stressed that this wage reduction was solidified through the use of capital-intensive technologies, which created few jobs and perpetuated the reserve army of the unemployed. He added that local capitalists reinforced the extraction of profits to compensate for their weakness in the face of foreign competition (Barreto, 2013).

It was from these features of the cycle of dependency that Marini deduced the existence of two kinds of crisis in the industrialized periphery. On the one hand, he emphasized that a currency hemorrhage had caused a breakdown of the balance between the components that supported accumulation (Marini, 1994). Revising the heterodox reading of balance-of-payments imbalances in Marxist terms, he said that, since industry does not generate enough dollars to import its inputs and equipment, periodic strangulation by outsiders impairs its activity. On the other hand, he identified a crisis in the area of consumption, noting that low wages reduced purchasing power and this blocked the realization of the value of goods. He understood that this impeded a degree of mass consumption similar to that in the metropolises. He pointed to the differences in the segmentation of purchases of elites and the popular sectors in comparison with the market basket in advanced economies. He understood that a wage good in the center was equivalent to a luxury good in the periphery.

Marini’s (2013) description of these combined crises of accumulation and restriction of purchasing power clarified many of the tensions in Latin American economies. He held that value crises (decrease in the profit rate) directly affected metropolises and that the modalities of realization (disjunctures between production and consumption) hit underdeveloped countries more severely. This was his assessment of dependent capitalism.

Industrial Regression, Obstruction of Consumption

Marini (1982) introduced the notion of the “pattern of reproduction,” which was later widely used to characterize the decline of the region’s industry. This regression has been a constant factor in recent decades and has modified some of the effects he identified. The output of the manufacturing sector in Latin America fell from 12.7 percent of the gross domestic product (GDP) in 1970–1974 to 6.4 percent in 2002–2006. Industrial density per capita (which measures the surplus value produced by this activity in per capita GDP) showed an equally significant decrease (Salama, 2017a). Industry in the region has been confined to the basic links of the global value chain; its participation in the manufacture or design of new goods is negligible.

In Brazil, the industrial apparatus has shrunk since the 1980s. Productivity is stagnant, the external deficit is expanding, and costs are increasing with the deterioration of energy and transport infrastructure, with the result that the country is facing a decline in high- and medium-tech exports (Salama, 2017b). This situation is worse for industry in Argentina, where the recovery of the past decade did not reverse a systematic drop since the 1980s. High concentration persists in a few sectors, along with foreign dominance, a surge of imports, and limited use of local components. In addition, the trade deficit has increased along with the acquisition of inputs and equipment from abroad (Katz, 2016: 159–170). Mexico appears to be doing well because of the sustained expansion of its maquila sector, but the latter only assembles parts and depends on U.S. economic requirements. It conducts its basic activities with little multiplier effect on the rest of the economy, and this weakness explains the limited growth of the Mexican GDP (Schorr, Cassini, and Zanotti García, 2017: 9–16).

Whether in the Brazilian and Argentine variant or in Mexico’s more misleading modality, the decline of manufacturing in Latin America has been widely described as “deindustrialization.” This retreat differs from offshoring in advanced economies because it is occurring before the industry in question has reached maturity (Salama, 2017b). Inasmuch as the manufacturing sector is not disappearing, “deindustrialization” may be a controversial term, but it nevertheless highlights the undoubted shrinking of this activity and its specialization in very elementary processes. Whatever term we employ, Latin American industry suffers from more dramatic issues than those Marini described. The impoverishment that accompanies this industrial regression has contributed to the contraction of purchasing power. The loss of jobs in industry has not been offset by the increase in services, and the decline of industry has diluted the traditional consumption improvements generated by increases in manufacturing productivity. The Fordist scheme of mass purchases has been stagnant for some time and is unlikely to appear in the current scenario of welfare, helplessness, and precarity of employment.

As early as the 1960s, the limited size of the middle class restricted the expansion of consumption. This sector was made up more of small businesspeople and self-employed individuals than of skilled professionals or technicians. It was expected to resurface during the past decade, but it performed below expectations because the aforementioned projections failed to account for the enormous inequality that prevails in Latin America. Expansion of the middle class entails incorporating new educational, health, or housing assets into current spending and is not equivalent to increased credit or indebtedness. Therefore it is wrong to portray Brazil as a middle-class country; the widespread acquisition of cell phones and computers does not change the fact that it is in eighty-fourth place in the global Index of Human Development. The significance of the middle class is not a matter of the number of recipients of a certain income but one of its size in relation to that of wealthier or poorer groups (Adamovsky, 2012). Its small scale maintains the dual pattern of consumption that Marini attributed to the cycle of dependency.

The Effects of Extractivism

The technification and capitalization of the agricultural sector have introduced major changes in the Latin American economy. Agribusiness reinforced the favoring of export crops over those for local consumption, and the same specialization can be seen in mining and the open-pit exploitation promoted by transnational corporations, which make considerable profits, pay low taxes, and cause significant environmental destruction. This model of export extractivism reinforces the preeminence of primary activities at the expense of domestic-centric manufacturing production. Income from natural-resource ownership is more relevant than profits from manufacturing investments, while large firms prioritize the appropriation of an exportable surplus, reproducing the cycle of dependency. This drainage combined with increasing openness to trade multiplies the problems addressed by the dependency theorists.

The current model accentuates the binding of all economies to the international fluctuation of commodity prices, making activity levels more volatile. Argentina’s GDP, for example, has contracted and expanded significantly more than a dozen times in the past 35 years, and the same is true for Brazil, albeit with less intensity. These swings have obstructed the continuity of accumulation for both countries, leading to limited investment, high costs, and frequent crises (Arriazu, 2015). In periods of export valorization, currency flows and appreciates, and spending expands. In the opposite periods, capital emigrates, consumption declines, and the fiscal situation deteriorates, and at their peak there are devaluations and adjustments. The renewed importance of primary exports increases the effects of this trade cycle.

Fluctuations also magnify indebtedness. During times of plenty, capital enters the country to profit from high-yield financial operations. During lean times, risk increases, and there is widespread fund leakage. The refinancing, moratoriums, and defaults associated with indebtedness lead to deeper crises than those Marini recorded. They increase the structural currency deficit that haunts industry, and the pattern observed during the 1960s intensifies. Manufacturing depends on a rentier sector that is increasingly reluctant to supply the funds the manufacturing sector needs to cope with its imports, and competition from foreign products accentuates this vulnerability.

In summary, the two kinds of crises posited by Marini are resurfacing now with greater virulence. The lack of currency expands disproportion and the retraction of purchasing power aggravates the downturn in consumption, which are often countered by borrowing, changes in fiscal policy, and monetary management. However, industrial regression and extractivism limit that state intervention, and the dependency scenario becomes more dire.

Cycle and Crisis

Marini assessed what happened during the period of import substitution (1935–1970), when industry expanded into heavy production without having resolved the problem of periodic strangulation. This model fell apart in the 1980s in the course of a “lost decade” of indebtedness and hyperinflation. The fiscal adjustment policies for containing the havoc led to prolonged stagnation, and the regional GDP regained its 1980 levels only in 1994. It was the same with poverty indices (Salama, 2017a). Debt payments absorbed 2–7 percent of the product, recreating the acute cyclical de-accumulation of dependent capitalism.

In the 1990s, neoliberalism introduced economic policies of convertibility, dollarization, and high interest rates and subsequently the privatization, productive restructuring, and foreign dominance of strategic sectors of the economy. These measures deepened the vulnerabilities that Marini described. The free movement of capital opened the floodgates to financial speculation on an unprecedented scale, and tariff reduction aggravated the industry’s trade deficit. Social inequality and impoverishment crowned this regression, accentuating the periodic contraction of consumption. Neoliberal experiments led to the fall of several governments and the beginning of the so-called progressive cycle.

Neodevelopmentalism reappeared at the beginning of the new century, with strategies meant to overcome economic backwardness through state aid, low interest rates, and competitive exchange rates. In contrast to what had happened in the past, this policy did not attempt to eradicate the export agricultural/mining scheme but sought alliances with key players in these sectors, limited protectionism, and strengthened ties with transnational corporations. This conservative approach prioritized macroeconomic policy and avoided structural transformations (Katz, 2016: 139–157).

The test, however, was subject to the international context, and the bonanza lasted as long as the favorable valuation of raw materials prevailed. Borrowing was reduced during this favorable period; some trade surplus emerged, and industry partially recovered. Growth was sustained by the influx of dollars, but the foundations of underdevelopment remained intact, and this eventually resulted in another crisis. In Argentina, the major neodevelopmentalist experiment—the state’s measures for encouraging consumption—stopped working when high inflation and the fiscal deficit reappeared, and this also happened in Brazil.

Dependent reproduction tied to the flow of foreign currency again blocked sustained growth but with smaller margins for this reindustrialization attempt. The regression of manufacturing, extractivism, and the predominance of rentiers diminished that space and affected states’ ability to reverse social exclusion. Currently, the returning conservative administrations in Argentina and Brazil and Mexico’s continued neoliberal governments are reengaging with the cycle of dependency at full throttle. Balance-of-payments imbalances and suffocation of consumption have resurfaced on a larger scale. Marini’s thesis is verified as dramatically as in the past, but this is only our starting point for reevaluating his approach.

The Contrast with South Korea

Proving that Marxist dependency theory is corroborated in Latin America is relatively straightforward, but doing so for countries in other latitudes is more complex. Neoliberal globalization does not simply recreate the old gaps between the center and the periphery but introduces forks at both poles. This separates Latin America in particular from, for example, the Asia-Pacific region, two areas that share relegated status but have followed opposite paths, and the stagnation of the former contrasts with the growth of the latter. The contrast in both manufacturing productivity and industrial density (the contribution of the manufacturing sector to the GDP) between Brazil and Argentina and South Korea is particularly striking. The contrast with the maquilas is also evident in value added. This difference reflects the limited competitiveness of the Mexican model, which combines official trade surpluses with the United States with huge imbalances in transactions with Asia (Salama, 2012b)

Differentiated exploitation of the workforce is the main explanation for the gap between Latin America and the Asia-Pacific region, and early Marxist characterizations underlined this fact, contrasting the Korean factory hell of the 1960s–1970s with the gains of Latin American workers (Tissier, 1981). This situation explains the persistent mistrust of transnational investors when, in the following decade, average wages were the same in the two regions. Capitalists’ preference for South Korea also had geopolitical roots in that the nation’s dictatorships had contained the Chinese Revolution. Funding from the United States poured in during the Vietnam War, in contrast to its response to the Cuban Revolution. In the new century, the wage gaps have changed. After a protracted accumulation process, the disparity between South Korea’s and Latin America’s productivity is more significant than wage differences—a change that illustrates the development gap. While the real investment per worker in Brazil in 2010 was slightly below the 1980 level, its equivalent in South Korea was 3.6 times higher (Salama, 2012a). The same contrast is seen in the coefficients that measure the participation of these economies in global value chains.

That said, current comparisons have little validity. South Korea is a significant link in a vast Asian network of part of globalized production whose members recycle together, recreating the comparative advantage of the cheap workforce. Successive waves of factory expansion have diversified this incentive for capitalists by imposing severe labor subjection on new countries (Thailand, the Philippines, Bangladesh). The exploitation of this labor contingent includes an increase in offshoring, in which Asian companies particularly outperform their Latin American peers, taking advantage of digital technologies, cheaper transport costs, and extended communications and imposing precarity of work, segmentation, and outsourcing.

Latin America worked under the old import model, and the Asia-Pacific region optimizes the current internationalization of production. The preexistence of a certain domestic market was advantageous for postwar industrialization, but the model is inappropriate for an export-oriented context: limited local consumption has become an asset of these schemes. Further, whereas the industrial dominance of the United States complemented the Latin American manufacturing takeoff in the past, nowadays transnational firms compensate for the industrial decline of the metropolis by establishing plants in Asia. In this new context, a conjunctural reduction of Latin American wages is no longer enough to reinvigorate investment. Brazil’s recipe has failed.

Since the above model persists in Latin America, protectionism there is greater than the Asian average, but its removal would completely demolish the structure of manufacturing. This is the dramatic dilemma imposed by neoliberal capitalism on Argentina and Brazil. Latin America cannot join the group of 20 economies that includes South Korea, 8 of which represent the majority of the wage earners. Since the 1980s, this new map of the proletariat has doubled the workforce connected to the global economy (Smith, 2010: 111–113), and Argentina, Brazil, and Mexico have no place in this circuit. The gap is further widened by Asia’s retention of significant portions of company profits while Latin America continues in an entrenched pattern of drainage toward the metropolis. The limited expansion of South Korean domestic consumption also contrasts with the sharp deterioration of purchasing power in the Americas. In short, the full continuity of the cycle of dependency does not extend, in Marini’s strict terms, to the Asia-Pacific region.

Other Interpretations

The application of the dependency theory model is more pertinent than other explanations of the difference between Latin America and the Asia-Pacific region. The neoliberal view attributes this to the trade opening that consumed the Asia-Pacific region but shunned Latin America, allowing the Asian economies to improve their resource allocation and benefit from their comparative advantage. However, there was tariff reduction in both cases, and the difference lay in the goods imported; Latin America’s flood of consumer products contrasted with South Korea’s procurement of equipment. The existence of more capital-friendly working conditions underpinned this productive path.

Orthodox economists attribute this asymmetry to “global wage arbitration,” which rewards regions that offer lower labor costs for similar tasks, but these activities are not realized with inanimate objects; “arbitration” selects different degrees of subjection of wage earners. Heterodox economists challenge the neoliberal interpretation, demonstrating the fallacy of open trade by pointing to the cluster of tariffs, financial regulations, and export subsidies that governs South Korea (Gereffi, 1989). Yet they contrast this model favorably with Latin America’s passive adaptation to the world market, which they see as preventing it from taking advantage of the opportunities of globalization (Bresser-Pereira, 2010: 119–143). This reasoning places all the obstacles to Latin American development in the domestic sphere, failing to acknowledge that the international division of labor prevents free choice. If countries could determine their own futures, they would all opt for Switzerland rather than Mozambique.

Capitalism is not a field open to the prosperity of the most savvy. It is a stratified order that inhibits collective well-being. Since there is not enough room for everyone, the development of a particular economy is attained at the expense of another. At each stage of the system, some regions are favored and others penalized by the dynamics of accumulation. This selection is not a menu available to different countries. It was not feasible for the Asia-Pacific region to be like Latin America in the 1960s, and the same impossibility is currently being reproduced in reverse. The Americas lack the kind of labor support offered by Asia and do not meet the needs of the transnational corporations. South Korea became part of globalization without carrying an outdated industrial sector on its back.

Heterodoxy assumes that the advancement of any emerging economy depends on its capture of complex activities in the value chain (Milberg, Jiang, and Gereffi, 2014: 164–168). It argues that manufacturing must follow assembly until it arrives at original production (Gereffi, 2001). It acknowledges that the companies at the head of this process retain the lion’s share of the profits while advocating for changes in their distribution. However, it fails to note that increased value capture requires greater profits. This omission is apparent in the presumed equivalence of wages, productivity, and exchange-rate policy as determinants of development strategies, overlooking the fact that these three dimensions are not comparable. Marxist dependency theory highlights the fact that the workers’ subjection to a type of remuneration is part of the cost estimate of any investment decision.

Other Comparisons

South Korea did not have to deal with the exchange-rate appreciation problems faced by the natural-resource-exporting economies of the middle-sized countries of Latin America, where the preeminence of agricultural rents discourages investment in manufacturing. Since the middle of the twentieth century, Argentina, Brazil, and Mexico have tried to channel this surplus into industrial activity, but the conflicts sparked by that strategy have blocked its implementation.

Many debates in the 1960s and 1970s assessed the productive use of rents. Dependency theorists proposed capturing that surplus via state-imposed penalties on the privileges of the oligarchy. These initiatives were more precisely detailed by the endogenist currents of Marxism. Marini emphasized drainage to the outside rather than the deterioration of the resources required for development and paid more attention to the expropriated surplus of wage earners than to the rents managed by landowners. The first discussions of the financial internationalization of rents were starting to take place. The main debate revolved around OPEC, and the suggestion that its members might escape from dependency (Semo, 1975: 92–100) was rebutted by a sharp exponent of dependency theory (Bambirra, 1978: 39–45). The subsequent development of the oil-exporting economies confirmed this criticism, as underdevelopment continued to prevail among its Middle Eastern, African, and Asian members.

This, however, did not solve the puzzles posed by the economies that took advantage of rents for their development, which have attracted increasing interest in recent years. Some studies contrast the cases of Norway and Australia with Argentina, and with some caveats this comparison could extend to Brazil or Mexico as well. These two countries, one in northern Europe and the other in Oceania, specialized in the export of raw materials while at the same time expanding certain intensive services and industries (Schorr, Cassini, and Zanotti García, 2017: 29–31). In contrast to the Latin American income-squandering liberal governments and the developmentalist administrations that failed to generate accumulation, these two countries channeled their natural resources into a certain degree of development. What made the difference was a combination of objective conditions and the behavior of the ruling classes. Norway’s and Australia’s wealth is concentrated in the energy and mineral sectors, and the per capita distribution of these assets is far better than for their potential Latin American peers. Norway combines very high income with a small population; with 5 million inhabitants, it ranks first in the Human Development Index. It also has a history of limited political conflict and preeminent social spending. By the time of the oil boom of the 1960s, Norway was already a productively differentiated country with a certain degree of industrialization, and therefore it was able to counteract the exchange rate’s export-based appreciation via state income regulation. It achieved this productive reinvestment as a country that was already integrated economically with the main metropolises of Europe.

Australia also has striking singularities. It has a lower population density than Argentina and a higher percentage of natural resources per capita. It went through a process of import substitution but specialized in primary exports and low-tech products. Proximity to Southeast Asia played a crucial role in this conversion. Moreover, its economy was always free of the agricultural complementarity and consequent rivalry that Argentina, for example, maintained with the United States (Schteingart, 2016). It has preserved a relatively egalitarian structure and never faced Latin America’s social tensions. It received substantial external funding for its active participation in the Cold War, and its privileged relationship with the United Kingdom evolved into a close imperial partnership with the United States (DSP, 2001). Comparisons of the same type could extend to Canada.

The differences between these countries and Latin America open up an important field of study for Marxist dependency theory, since assessing the impact on development of the management of rents is crucial.

The Relationship with China

The great trade shift with China illustrates another contemporary dimension of dependency. Total transactions with China increased from US$10 billion in 2000 to US$240 billion in 2015, and there is total asymmetry in that, while Latin America exports raw materials in exchange for manufactured goods, China not only provides industrial goods but robs Latin America of markets for these products (Emmerich, 2015). The trade flow between the two regions is totally uneven: while Mexico and Brazil rank among the top 25 importers of Chinese goods, their sales account for only 1 percent of Chinese acquisitions (Salama, 2012b).

The new Colossus is also expanding its investment in a dizzying manner, without any consideration for its Latin American counterparts. All its ventures are focused on capturing natural resources. It provides funding for oil exploration, mining, and agricultural projects. It improves ports and routes for the transport of primary goods but imposes restrictions on inputs and never contemplates technology transfers. It also promotes free-trade agreements to ensure its dominance and uses its successful status as a “market economy” to resist any attempt to bar entry of its products. It safeguards this expansion with loans, which already exceed the amount provided by the two traditional funders of the Latin American economy (the International Monetary Fund and the World Bank). Only Africa is more subordinate to this new economic client.

This subjugation crowns a staggering disparity. The per capita incomes of Brazil and China were US$4,809 and US$306, respectively, in 1980, and in 2015 they were US$15,614 and US$14,107. This impressive equalization illustrates Brazil’s risible progress in the face of China’s spectacular leap (Salama, 2017a). The same gap can be seen in global export rankings. The Asian giant currently ranks first of fifty, while Brazil has dropped from sixteenth to twenty-fifth (Salama, 2012b). The disparity is even more significant when we look at the impact of the two economies on the global value chain.

China’s economic role in Latin America is not comparable to that of any of the countries contrasted with Brazil, Mexico, and Argentina above. It is on a very different level from South Korea, Australia, and Norway and has begun to develop a relationship with the region reminiscent of those with the European metropolises or the United States and certainly challenging the dominance of the latter. So far, however, the threat is more economic than geopolitical, since China does not project its impressive commercial expansion on a military level and moves cautiously in the sphere of diplomacy. It deploys soft power, with a discourse on cooperation that distances it from the hegemonic message in opting for a rhetoric of reciprocity and mutual benefit in “South-South” relations.

Chinese policy is based on the major change generated by the globalization of production. The old bipolar relationship of center-periphery is taking on a triangular shape, with the metropolitan economies and the new industrialized powers competing to subjugate the periphery. China and the United States are competing for the use of Latin America’s primary exports (Salama, 2012c), and the results of this confrontation are uncertain. Latin America’s subordination is a given under any outcome. A drastic reversal of this situation could be the condition for entering into a partnership with China, thus contributing to emancipation from U.S. domination (Katz, 2016: 299–311).

Geopolitics, Classes, Governments

Marxist dependency theorists have always underlined the political dimension of this subjection (Santos, 1998), noting that the subordination of Latin American governments to imperialism was linked to bourgeoisies closely associated with foreign capital. This reasoning addressed an international scenario fraught with tensions between the central powers, the peripheral countries, and members of the so-called socialist bloc. Marini also highlighted the distinctions within the periphery and the differences between countries with subimperial and entirely subordinate profiles. While the map has changed, observations on the geopolitical meaning of global stratification are still valid. These signals clarify the forces that complement the incorporation of each economy into the international division of labor. Military might, diplomatic gravitation, and cultural influence reinforce, temper, or counteract the dominant or subordinate status of individual countries in the current neoliberal-globalization strata of the world pyramid.

It is clear that the main capitalist empire, the United States, and its burgeoning rival China are struggling at the apex and that the resources of Latin America, Africa, and much of Asia are the spoils. Following Marini, however, we must also address the role of medium-sized powers. In this regard, the decline of Brazil’s subimperial status with the regression of manufacturing and the shift to primary exports is very significant. Argentina and Mexico had never reached this category and have now moved farther away from it, the former because of its severe loss of economic status and the latter because of its increasing subordination to the United States. Subempires in other regions have instead reinforced military interventionism, with uncertain results for the development of their economies: Turkey has consolidated a more significant industry amid a myriad of conflicts, while India has managed to stabilize a continuous growth cycle and accentuate its specialization in certain kinds of offshoring. It nevertheless maintains a vulnerable industrial structure far from the Chinese model. Australia’s close partnership with U.S. imperialism has increased its autonomy with regard to the reinvestment of mining income, but this has not kept it from lagging behind its Asian competitors. In South Korea, militarization under the direct control of the Pentagon provides guarantees for investment, but subjection to the United States obstructs the more ambitious project of eventual reunification with North Korea.

Changes in geopolitical status have contradictory effects on the development of intermediate countries. The obvious feedback between imperial power and economic supremacy (or between political dependence and underdevelopment) does not extend to the equivalent parameters in the semiperiphery. All of the ongoing transformations, in turn, affect the profile of the ruling classes. In the Latin American case, the conversion of old national bourgeoisies into local bourgeoisies that no longer sponsor self-centered development has been consolidated, and these local bourgeoisies prioritize exports and prefer cost reduction to the expansion of consumption. This expansion of ties with foreign capital does not mean the disappearance of the Latin American bourgeoisie. Countries of origin persist as a base of operations, a source of profit, and the focus of decisions; the sector has not become a purely transnational class, nor has it become a satellite manipulated by the metropolis or a “lumpen-bourgeoisie” dedicated to plundering. Still, the autonomy of the nascent postwar manufacturing bourgeoisie in promoting industrialization in the region has been reduced as transnational companies develop their strategies with the approval of local partners. This subordination reinforces the influence of international financiers and agricultural and mining capitalists on Latin American states.

As a result, the developmentalist expectation of overcoming economic regression has shifted to state bureaucracies. The bourgeoisie’s obvious disregard for sustained growth had led to the exalting of civil servants, perceived as a lucid, independent, or patriotic segment of the population ready to address pending development challenges. The past decade, however, has disproved this belief, confirming the bourgeoisie’s close kinship with representatives of the state; with very few exceptions, parasitic bourgeoisies generate inoperative bureaucracies. The various administrations tend to express the conditions that determine the level of dependency of each country. The strengthening of underdevelopment and political subordination are the norm for right-wing presidents and their neoliberal ministers, while progressive leaders and their neodevelopmentalist teams have unsuccessfully sought to reverse both scourges. All of them operate in a framework that severely limits their actions, since in Latin America dependency relations precede and cordon off any governmental management.

The Determinants of Dependency

The status of the different countries in the global hierarchy is currently established by a variety of processes. Position in the division of labor is the main historical determinant of a location closely connected to the value of the workforce, the dynamics of transfers, the destination of rents, geopolitical and military leanings, and the roles of ruling classes, bureaucracies, and governments. These factors determine the distance between advanced (the United States) and new (China) centers and rising semiperipheries (Korea, Norway), stagnant countries (Australia), and those of uncertain development (India). The same features affect the status of descendent semiperipheries (Brazil, Mexico), new peripheries integrated into the globalization of production (Bangladesh), and commodity exporters (Guatemala). Changes in this structure are heavily influenced by the investments of transnational companies, which depend on profitability—an aspect focused on the modes of exploitation and superexploitation in each economy and the predominance of high, medium-sized, or low workforce value (Katz, 2017). It is with this strategic referent that they seek to reduce the labor costs associated with the complexity of different activities.

International value transfers have a decisive impact on changes in this global hierarchy. They are displacements of capital that recreate polarities and branching in different directions, following the movements of profits that modify capital in its various financial, commercial. and productive phases. Transfers may be absorbed, drained, or withheld. Displaced global surpluses are absorbed by the central economies, retained by rising semiperipheries, and drained from descendent semiperipheries and peripheries. One gains what another loses in a structure marked by the relative stability of the global hierarchy. Rent is generated only by countries with significant natural resources and may be captured, reinvested, or lost. It is a surplus that moves internationally as profits do but from a different source. Since rent is qualitatively different from the portion of surplus value appropriated as profit, it must be treated differently.

Some powers manage their own rent and recycle it internally (the United States), while others lack that surplus and are dependent on its capture (China). Some semiperipheries have no such resources (South Korea) while others own and retain it (Australia, Norway). Other countries are partially (Brazil) or completely (Guatemala) losing this income. International geopolitical status produces another somewhat autonomous hierarchy of productive, commercial, and financial influence. This classification is made up of established empires (United States) and their partners or appendices (Australia), burgeoning empires (China), subempires (India), and countries facing varying degrees of dependency. Cases are distinguished as characterized by autonomy (Brazil), subordination (South Korea), or submission (Guatemala). Imperial states’ ability to shore up their development at the expense of dependent formations is indisputable, but the latter spectrum has many variants. Finally, metropolitan ruling classes with efficient bureaucracies and stable governments favorably impact accumulation, while the reverse is true for countries with peripheral bourgeoisies, parasitic officials, and inconsistent governments. Given that this area is so bound to the action of social subjects, many types of combinations can be observed.

Apropos of A Reconsideration

While my approach to the prevailing global polarization and split paths under neoliberal capitalism is inspired by Marxist dependency theory, it also broadly complements and corrects several of its assumptions. Following dependency theory, I highlight the preeminence of an economic-social system based on ongoing competition for the profits that arise from exploitation, and therefore the value of the workforce is foremost in my interpretation as the main determinant of changes in contemporary capitalism.

Dependency theory also addresses global stratification around central, peripheral, and semiperipheral segments, which operate differentially to produce a broad range of development and underdevelopment contexts. The international transfer of surplus is the main mechanism of change. During the past two centuries it has seen changes in direction, volume, and beneficiaries. Dependency theorists have always emphasized the unequal distribution of value and explained how the surpluses produced in the periphery were captured by the central economies. I follow this line of thinking but incorporate the previously sidelined issue of income displacement. I also consider the geopolitical dimension underlined by this theory but reformulate the categories within that sphere to include the complex variants produced by contemporary imperialism. I further emphasize that the different outcomes of class struggle determine the roles of the ruling classes and their officials or governments.

My synthesis is based on a critical rather than merely descriptive interpretation of capitalism, highlighting the fact that this system strengthens the inequality and privileges of minorities, leading to popular suffering. It should also be noted that periodic crises corrode the continuity of this social regime. My approach refutes neoliberal idealizations of capitalism, which deny its intrinsic imbalances. While orthodox approaches posit that globalization brings society closer to an idyllic stage of perfect markets, optimal resource distribution, and convergence between advanced and delayed economies, this is simply not true.

My approach likewise rejects the heterodox perspective that acknowledges the conflicts of capitalism while relativizing their scale and intensity, minimizing global stratification, imagining wide margins for modifying the status of the disadvantaged, and ignoring the pull of imperial domination. Developmentalist strategies presuppose the potentially friendly workings of capitalism and seek to overcome delays in the periphery with state-led policies for accumulation. Systems theory has refuted these assumptions by showing that global capitalism operates on a zero-sum principle, which enshrines the expansion of certain economies at the expense of others. National accumulation processes compete for the same niche, and the progress made by some participants does not provide a blueprint for the rest. It is important to understand that this dispute hovers around the same strata of the global pyramid. We can therefore reject the fantasy of “imitating the Asia-Pacific region,” knowing that the choices available to each economy are conditioned by the country’s place in the global division of labor and do not provide a clear path or one that is simply dependent on economic policy. No magic recipe can help Haiti be like the United States.

My approach borrows from Marxist traditions preceding Marini as well as from other influences of his time. This expansion and reformulation of dependency theory can address problems that cannot be solved with the formulas conceived in the 1960s and 1970s. For this reason, I replace the traditional concept of superexploitation with three categories of value of the workforce, facilitating an assessment of the broad spectrum of situations generated by the globalization of production. An analysis of these novel ways of globalizing profits, along with the interpretation of value and income transfer, clarifies the new dependency map.

These scenarios cannot be understood through purely economic readings, and an update of dependency theory on the political level is particularly urgent. This school of thought managed to preserve a rich legacy of studies on capitalism, but its scope did not extend to studies of imperialism, systems of government, and popular resistance. These gaps make it difficult to explain processes that challenge the center-periphery scheme (e.g., South Korea) and prevent us from addressing critical problems (e.g., China’s role) or simplifying current Latin American political quandaries (e.g., equating neoliberalism with progressive policies). The renewal of Marxist dependency theory requires a joint approach to economics and politics. Rereading Capital and the Dialéctica de la dependencia may prove pertinent to current dilemmas of socialist strategy. It is from this synthesis that Latin American Marxism may flourish once again.

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