Contact Zones

Introduction

Latin America has experimented with two different development strategies over the last century. Its first, and current, “outward-oriented” program was and is based on exports of primary commodities. Alternatively, for twenty years following World War II, a domestic industrialization from within strategy was pursued. A consensus that both models failed to achieve sustainable development in peripheral countries opened space for rethinking development theory and policy in the beginning of the twenty-first century (Kregel 2008).

Compared to the post-WWII period, current debate has made important contributions, as with, for example, an emphasis on questions of inequality and basic needs instead of aggregate economic performance and a better understanding of financial markets. Focused on these aspects of underdevelopment, neo-developmentalists and post-Keynesians offer the two most influential alternatives to neoliberal policies.

I argue, however, that these new contributions, though important, are not sufficient to guarantee that development theory will not succumb to the same fate it had in the past. Recent development theories are fundamentally the same post-World War II theories in new clothing. There is, thus, a need to understand why the old theories failed in order to avoid committing the same errors. This paper suggests that the recurrent inadequacy of development theory is in part due to a faulty understanding of historical change. Development theory presupposes historical specificity; its raison d’etre is founded on the belief that underdeveloped economies function differently than their developed counterparts. Yet it takes capitalism for granted, making historical specificity unavoidably ahistorical.

This inadequacy became more evident in the 1970s, when history and other social sciences experienced a paradigmatic shift incited by the “cultural turn.” Motivated by this shift, mainly its emanating concept of “contact zones,” the paper adds to the literature occupied with the directions development theory may take in order to grapple with historical change as a result of the interaction between agency and structure.

1. History and Economics: Towards a Non-teleological Perspective

Old and new development theories are based to a greater or lesser extent on a teleological view of history (Schuurman 2004). With relation to development analysis teleological theories pose a twofold problem. First, nations are analyzed as coherent wholes (Booth 2004). Second, these coherent wholes move gradually from primitive societies to market economies. A theory that emphasizes a teleological viewpoint tends to underestimate the conflicts and complexities involved in the process of development and/or transformation and focuses on the commonalities among different economic systems. Failure to capture the complexity entailed in social change allows economists to prescribe policies based on simplified models. Consequently, most development theories continue to argue that peripheral countries should emulate core countries and see development policy as a way of speeding up the process.

History, however, does not unfold harmoniously or teleologically. Fernand Braudel (1972) explained that a teleological view of history focuses only on political events. In that sense only a handful of powerful and great men are the engine of social change. In other words, social change is viewed as a top-down process. According to Braudel, however, historical reality is structured with political events forming only one of three social layers: (i) everyday life, which is shaped by customs, habits, and mentality; (ii) social and commercial relations, which form the grounds for production and exchange relations; and (iii) political and ideological power, which constitutes the actions taken by elites in power. Each one of these layers changes at different paces, everyday life being the most stable and least dynamic of the three. As it does not respond immediately to transformations in other layers, its sluggishness smooths the uncertainty involved in social change. Braudel argues that everyday life is what really shapes history. When emphasizing the importance of everyday life to history, Braudel is proposing a framework that looks at history from the bottom-up with a focus on the habits, culture, and life of common people. Braudel, however, does not neglect the influence of politics; while this is certainly important it is not the sole force affecting society. History unfolds through the dialectics of stabilizing forces of everyday life and the unsettling influences of political and economic interests.

Based on this idea, Braudel criticizes a teleological view of human history. Alternatively, he looks at historical change through the different social layers, which change constantly, and most of the time in different and contradictory directions. In that sense, just as nations do not move in the same direction – towards the “end of history” – at grassroots levels it is common to find opposing views of the direction social change should take. From this perspective, there is not a unique history, but many histories; that is, history does not happen in a gradual progress towards a final destination. Many histories unfold side by side. Therefore, history is better suited for synchronic analysis (i.e. by seeing that different social systems and various histories coexist) rather than by diachronic analysis (i.e. by acknowledging the importance of succession in time).

Development theories have consistently failed to understand the nature of historical change as an interaction between social layers. While other fields of economics may avoid the difficulties of including history in their core assumptions, development theory presupposes historical specificity; its raison d’etre is founded on the belief that underdeveloped economies function differently than their developed counterparts. Unless historically grounded assumptions and principles become part of the core of economic theory, economics will not adequately deal with historical specificities nor understand the roots of underdevelopment (Bracarense 2013).

2. Old and New Development Theories: A Methodological Analysis

For a large part of the past century, peripheral countries were persuaded to follow an outward-oriented model of development based on free trade and the exportation of primary commodities. Underpinning these models are universalist theories, intellectually crafted in research centers of the hegemonic powers.

Borrowing from the laws of physics and applying sophisticated mathematical models, neoclassical economists proclaim the universality of self-equilibrating market forces. In international economics, Eli Heckscher and Bertil Ohlin straightjacketed David Ricardo’s comparative advantage and elaborated static models of international trade that prescribed underdeveloped countries to deterministically specialize in primary commodities (Maneschi 1992). The theoretical foundations of pro-market policies are the assumptions of fixed human behavior and conception of market relations as natural, ultimately presenting society as a collection of ahistorical individuals. In fact, neoclassical economists insist on abstracting economics from all social relations and institutional arrangements (Walras 1874: 63-79). The real history of socio-economic systems is lost and the specificities of institutions, histories, and cultures are overlooked. It implies that history is teleological as capitalist relations evolved naturally from human nature.

With the end of World War II, however, stage-growth theorists, Latin American structuralists, and dependentistas advocated for historically oriented approaches to development policy. They believed that historical specificities were critical to understanding peripheral economies, and they supported the creation of new economic theories, or the modification of existing ones, to apply them in a development setting.

Structuralists and stage-growth theorists both believed that peripheral countries could achieve the same degree of development as advanced countries. From both perspectives, structural changes were able to mold agency to adequately advance capitalism’s norms. Capitalism became the end of history, which implies a teleological view of history (Bracarense 2013). But, what differentiated these two theoretical bodies was their understanding of culture.

While Rostow (1960) believed that a “backward” culture was the main explanation for underdevelopment, Prebisch (1949) denied underdevelopment could be solely explained by internal factors. Underdevelopment could, however, be explained by vulnerability and subordination in the international market. These differences concerning the causes of underdevelopment resulted in different solutions: Rostow prescribed increased contact with modern cultures backed by foreign aid, while Prebisch recommended institutional reform conducted by direct government intervention. In both cases, however, development economics is a temporary enterprise as historical specificity was introduced as an afterthought, and their models were littered with neoclassical concepts (Bracarense 2013). From my perspective, the fragility of development economics lies in its ephemeral attributes. As homogenization of culture or institution is achieved historical specificity ceases to exist, together with the need for a theory that deals with such issues, and the application of neoclassical theory may resume.

More recently, two views share the faith of a prosperous and more equitable capitalist development: neo-developmentalists and post-Keynesians. While they both rely to a certain extent on structuralism, the two views grew apart in the past decades. Neo-developmentalism emerged in the 1990s, claiming to be a revival of structuralism. Maintaining that structuralism failed due to its overly macro-analysis, neo-developmentalists focus on disaggregated factors (i.e. geographical imbalance of productive structures and composition of exports) to explain underdevelopment. From this viewpoint, the solution for underdevelopment lies in stable macro and micro policies that stimulate niches of technological innovation that may include foreign capital participation (Bielchowsky 2009: 177). In other words, peripheral countries may arrive at advanced capitalism if the government creates physical infrastructure, invests in worker training programs, and implements policies directed at innovation and technical progress (Fajnzylber 1990).

Post-Keynesians, on the other hand, claim that the failure of structuralism was its disproportionate focus on production to the neglect of financial markets in promoting or jeopardizing development. Such negligence drove peripheral countries to the 1980s’ debt crises (Vernengo 2006). Kregel (2008), for instance, argues that the structuralist development model failed because, when translated into policy, it was misinterpreted. Policy makers erroneously viewed low levels of domestic saving as the primary cause of underdevelopment. As a result they relied on “foreign savings” to implement development policy, which in the 1980s drove underdeveloped countries to the debt crisis. Scholars in the post-Keynesians tradition argue that, rather than insufficient national savings, inefficient financial institutions and high levels of unemployment or underemployment are the main sources of underdevelopment (Kregel 2009). The government thus needs to create favorable conditions for the development of modern financial markets, which will in turn facilitate government spending, promoting greater demand, and hence development from within.

Both neo-developmentalist and post-Keynesians resemble structuralism in one fundamental way: history unfolds teleologically with capitalism at the end of the line. Inadequate institutions – productive or financial – can thus explain the problem of underdevelopment. Although both views believe that underdevelopment may be overcome by government intervention, their macroeconomic policy prescriptions are at two opposite sides of the spectrum. While neo-developmentalists advocate for supply-side policy prescriptions of neoclassical economists, post-Keynesians remain loyal to Keynes’s demand-led vision of growth.

Apart from their important differences in terms of policies, all four alternatives strictly defined neoclassicism presented above are ahistorical; capitalism is taken for granted and history unfolds teleologically. Capitalist development can be achieved through structural transformations while agency reactions, due to culture, ideology, or otherwise, are either obstacles that can be easily eliminated or do not influence economic behavior in any essential way.

3. Marxism and Culture: Incorporating Cultural Studies into Economics

In the mid-1960s it became clear that the relative success of industrialization in peripheral countries could not prevent a substantial increase in poverty and inequality. Growth had not benefited the low-income masses, while the high-income oligarchy flourished. In this period, Marxists and dependentistas took up the development problem with the objective of redefining it radically (Cardoso 1977: 10). While structuralists and stage-growth theorists held a harmonious view of society and had faith in the future prosperity of capitalism, Marxists viewed class conflict as the main engine driving social change and argued that capitalism was an exploitative system that sowed the seeds of its own destruction.

For them, the main failure of structuralism was its ahistorical perspective. Structuralists analyzed underdevelopment mechanically, ignoring the dialectical relationship between underdevelopment and development. Marxists, on the other hand, argued that underdevelopment has its roots in colonialism, and more precisely imperialism (involving the colonial, semi-colonial, and dependent countries), while colonialism and imperialism are part of the development of capitalism itself (Baran 1957). One cannot understand development or underdevelopment without an appreciation of the world system. The parts are related; that is, the structure determines the dialectics between wealth and poverty. The proper task, then, is “to study what relates the parts to each other in order to be able to explain why they are different or dual” and to transcend the relationships that generate these differences (Frank 1967: 60). This meant fighting capitalism was the objective, on international, national, and local levels. In other words, as an alternative to liberal reform, a socially just form of development should be pursued and could be achieved through socialist revolution (Joseph 1998: 4-12). Although history penetrated the theoretical core, it is still treated in a teleological way, replacing capitalism with socialism as the end of the line (Schuurman 2004: 2).

This view, however, was far from being unanimous among Marxists. Some dependency theorists believed it was overly structural and simplistic, unable to link the general and the particular in a dialectical whole (Cardoso 1977). It focused on the external factors of dependency instead of looking at the interrelation between capitalists in advanced countries and a peripheral bourgeoisie. At this point, history starts to be introduced in a non-teleologic fashion.

With a focus on class struggle, dependentistas argued that peripheral capitalists were connected with and subordinated to the bourgeoisie of the Western world: “alliances are established within the country . . . to unify external interests with those of the local dominant groups, and as a consequence, the local dominated classes suffer” a super exploitation (Cardoso 1977: 13). They introduced the idea that explanations of dependency could not rely solely on structural analysis that viewed nations as coherent wholes. Capitalist development stirred up tension between modernizing elites and super-exploited working masses. Dependentistas aimed at introducing agency as a source of transformation, acceptance, and/or rejection of structural changes.

Dependency theory was not without its shortcomings though. The theory focused disproportionately on class conflict, neglecting other sources of conflict like race, ethnicity, and gender. Dependency theory maintained the view of Latin America as “‘peripheral societies,’ intelligible only in terms of the impact that center nations have on them; the idea of penetration; the reflexive indictments of complicity; the bipolarity of the North-South relationship; and the subsidiary role accorded to culture” (Joseph 1998: 14). The consideration of other sources of conflict in the 1970s meant a further step towards seeing history as a non-teleological process and including historically grounded principles as part of the core of development theory.

Scholars from a variety of fields felt that grand social theories neglected social conflicts other than class. According to Elizabeth Minnich (2004: 148) knowledge is not only a human construct but suggests a “deferred meaning;” what is included in these constructs in fact plays “against what is absent, denied, suppressed.” In the search to understand the everyday life of marginalized groups (slaves, women, Native Americans), important contributions were made by linguistic and feminist studies, for example, which analyzed naturalized language rooted in everyday life to explain hierarchy and power relations (Hoefferle 2011: 172-188).

Looking at all these different aspects composing society, post-structuralists argued that power relations emanated from decentered agents, meaning agents examined from unexpected perspectives, from the viewpoint of “the other,” the oppressed, and the marginalized rather than from the dominant discourse (Hoeffeler 2011: 214). To understand power relations it was necessary to look for alternative categories such as sexuality, race, gender, and ethnicity. From this perspective, nation-states are not the only source of power; power is in the household, in the work place, on the streets, everywhere. Grassroots movements and reactions to change imposed by governments represent multiform resistance from the bottom-up, implying that power is not uniform nor is it only imposed from the top-down (Joseph 1998).

As a result of post-structuralist criticism of grand social theories, the social sciences were overwhelmed by a sense of fragmentation, economics and history included. Any hope for a unifying framework was ultimately lost (Booth 2004: 56). A good proportion of post-structuralist analyses neglect the dynamics of political economy thus de-emphasizing the material and, more concretely, the economic factors (Beneria 2003: 25). Is it possible to elaborate a social theory that understands the dynamics of the material world without neglecting the important lessons learned from the critical perspectives represented by the “cultural turn”?

4. The End of a Dichotomized World: What Does Development Mean?

According to David Booth (2004), recent discussions have tended to bring forward more evidence of agreement, and fewer signs of fundamental disagreement. Historians, for instance, believe that Mary Louis Pratt’s (1991) concept of “contact zones” may offer a unifying solution to this fragmentation. From her perspective, the interaction between socioeconomic structures and agency’s everyday life demands daily negotiations. These negotiations determine the path on which history evolves. Pratt’s “contact zones”– that is social spaces where cultures meet, clash, and negotiate with each other, quite often in a context of asymmetrical power relations – may successfully capture these dynamics.

In other words, the concept “contact zones” grapples with the interaction between human agency and structures as a way to understand social change. The absorption of Pratt’s contribution enabled historians of international relations to participate in the “cultural turn.” Historians of international relations are deeply influenced by dependency theory and world-system analysis, so structures matter, while agency plays a role that reveals a multiform engagement with structures. They account for political, institutional, and ideology structures, as well as “political and cultural resistance, adaptation and negotiation; the role of the state; the construction and transformation of identities; and the contingent nature of evidence” (Joseph 1998: 15). Power is studied in terms of specific cultural interactions, in which agency is transformative.

By working on a yet-to-be-achieved synthesis of dependency theory and world-system analysis with cultural studies, historians have attempted to capture the interaction between agents and structure (Joseph 2008: 19). While allowing for the importance of economic and structural factors in affecting history, they bring agency to life and show that everyday life, the inherent habits, culture, and customs, prompt agency to transform, accept, and react to structural changes. What has been lacking is a framework for understanding the grassroots dynamics and meanings of the Latin American reality (Joseph 2008: 19).

To that end, the intersection of culture and power, nonetheless, is important because it raises new questions about the nature of agents and structure and foreign-domestic encounters. The aim is to turn away from dualist frameworks that see only exploiters and victims, domination and resistance, public and private, center and periphery, developed and underdeveloped.

Dichotomized categories have roots in Victorian modes of thinking, which tended to naturalize and moralize hierarchies of nations, gender, race, and culture, while pushing for greater homogenization of these hierarchies. This mode of thinking pertains also to the history of U.S.-Latin American relations and, thereby, development theory. Around the beginning of the 20^th century, scholars adopted a form of biological determinism and “surveyed the demographics of the southern continent, carefully and ‘scientifically’ asserting that people of Indian and African descent were backward, that mestizos were unstable, and that Latin American whites were sentimental and impulsive” (Rosenberg 1998: 500). Latin Americans were morally deficient, incapable of adopting modern business practices and developing stable governments. These scholars argued that the only hope for progress in Latin America was acceptance of U.S. culture through pan-Americanism (Rosenberg 1998: 500). Victorian thinking exemplifies the practice of homogenization: the imposition of a set of beliefs assumed to be the right way of life on other cultures.

By changing the method of analysis and focusing on everyday life, it is possible to trace development theory back to Victorian thinking (Rosenberg 1998), to Enlightenment Europe (Hoefferle 2011), or even further (Wallerstein 2006). Indeed, the same paternalistic ideas, cultural hierarchy, and the homogenizing practices of 16^th century colonial powers are still implicit in the theoretical formulations that guide U.S.-Latin American relations. What passes for “development” theory is “little more than a restatement of the old ethnocentric platitudes about uplift and regeneration” (Hunt 1987: 160). This raises the question of whether the concept of development is flawed and, if so, should be “unthought.” The mechanism by which international aid is presented as beneficial to humankind and historically inevitable is part of an “illusion of the epoch,” imposing the will of advanced countries on the peripheral world. If this is so, should not idealist models of development aimed advanced countries be discarded?

5. Concluding Remarks

As a new opportunity to voice the concerns of the “underdeveloped” world emerges, development theory needs to introduce historically grounded principles implying the non-teleological nature of historical change if it is to avoid recurrent absorption by neoclassical economics (Bracarense 2013). Development theories implicitly maintain a normative understanding that capitalist development is good development. Traditional culture and values, in contrast, are viewed as obstinate attempts to maintain “backward” habits of thought. From this viewpoint, development theory consists of a recipe for getting rid of “backwardness” and promoting capitalist development. Based on this dichotomy, countries must get rid of their cultural and social specificities that separate them from the most advanced capitalist country. They must replicate U.S. liberal capitalism, eliminating their social specificities, which ultimately declare development theory obsolete.

This simplified and overly structural view of development results from an inadequate use of nations as the unit of analysis, which denies any agency-transformative power to ordinary people. In this regard, development theories divided the world into center and periphery, domination and resistance, exploiters and victims. Structuralism has a tendency to binary oppositions, focusing on the power and influence of the “developed” world in shaping “underdeveloped” countries, and this was replicated by other developing theories including dependency theory. The relationship between center and periphery, however, is much more contingent than these concepts admit.

If development economists want to set the debate on their own grounds, devoid of paternalist implications, they must understand history as a non-teleological process, a process in which “peripheral” countries cannot be understood in terms of natural stages moving along a linear path of growth. To that end, development economists should abandon dichotomized views such as “developed” and “underdeveloped” or “center” and “periphery,” and adopt a decentered view of social change. A decentered view of development theory means that the ideas of center and periphery shift depending on the frame we used to approach a subject, e.g. gender, race, national-state, class, ethnicity (Rosenberg 1998).

Broadly speaking, underdevelopment implies that capitalist institutions and social relations are under- or ill-developed in a specific geographic area, permitting other types of economic systems (e.g. traditional or command) to play a substantive role in economic decisions. History is non-teleological as economic systems co-exist and may be combined in different forms as history unfolds. If we accept that these combinations are not converging to an end of history, analyzing social change within a synchronic framework, as suggested by Braudel, offers significant insights to development economics.