x>u (Jonicmporary i'heones ot i>evclupineni: 'in which abstract formulations prevail',35 Furtado argues that it 'comprises analysis of actual mechanisms of the process of growth'36 and the strategy of enquiry involves 'building models or simplified schemes of existing economic systems'.37 What we have here is an acknowledgement of the post-Second World War neo-classical informed language of the precise identification of mechanisms via model-building. Furtado continues by introducing his second, related, style of enquiry. It is the 'historical plane, [and] comprises critical study in the light of a given reality and on the basis of the categories defined by the abstract analysis^ In this way the theorist can refine lormal models and Werter grasp the real world processes of growth. Furtado's early approach may be characterized as structuralist, and he is concerned to fashion a set of models of Latin American economies which will reveal how they have changed through time and how they are presently ^constituted. What is most intriguing in this early work is the way in which (Furtado runs together attention to the historical detail of the Latin Amer-. jican case with a deference to orthodox economic ideas of scientific explana-, ition which expresses itself in the pursuit of models. • •- As Furtado deploys the structural approach in the case of the economies of Latin America, the substance of the analyses which he presents already contains in outline the dependency position. Furtado considers the historical^ expansion of industrial capitalism and observes: ' The advent of an industrial nucleus in eighteenth century Europe disrupted the world economy of the time "and eventually conditioned thi later economic development in almost every region in'tHe world.39"| The nucleus expanded in three directions: internally, in Europe itself; into the 'empty lands' of North America and Australasia; and, third, into already ; inhabited lands in Latin America. It is the matter of the types of economics J and societies produced - especially in the last noted case - that is of„intcr-i est to Furtado, and he argues that the 'effect of thejmpact of capitalist , ,' \ expansion on the archaic structures varied from region to region; the result:. ;, / /»however, was almost always to create hybrid structures'.40 At this point we J . f have a first statement of the .core of thedependency analysííTwhičh is~thať/ , J '- underdevelopment is not an original condition but is historically generaícäV ; in the process of the expansion of capitalism. The impact of the expansion! of industrial capitalism upon the various colonized territories has the~effčct \ of producing economies comprised of distinct sectors. Furtado identifies three) i typical sectors: , , one was the 'remnant' economy with a predominance of subsistence _ _ , activities and a minor money flow; the second comprised activities i v 35 Ibid. 36 Ibid. .' j" 37 Ibid. 38 Ibid. 39 Ibid. p. 127. ' * 40 Ibid. p. 129. The Development Experience of Latin America 191 directly connected with foreign trade; the third consisted of activities directly connected with~fhe domestic market.4^ Using this scheme, Furtado takes note of the situation of the ..Brazilian ,-"economy, and he concludes his remarks by remarking that 'Again we see ľ i that underdevelopment, specific phenomenon that it is, calls for an effort of autonomous theorising'.42 J Furtado's ideas of an appropriate theory of underdevelopment are pursued in Diagnosis of the Brazilian Crisis,,43 Thus far we have met the ideas of sectors and structures, and the importance of historical analysis has also' been stressed. Furtado has emphasized that enquiry into the circumstances ,of underdevelopment in Latin America, which is his particular area of concern, must focus upon the actual local situation and hence his calls for auto-'nomous theorizing. In Diagnosis of the Brazilian Crisis, which was written it a time of political crisis in Brazil, we find three crucial revisions to the analysis thus far made. Furtado, first, invokes the ř|egelian...a,nd..marxian-idea.of dialectical change. This, argues Furtado, is the best available general orienting frame for enquiry. However, Furtado immediately goes on to say that at a practical level it is not much use and other modelling exercises are needed. The second revision made involves acknowledging the idea of class md, class struggle. Furtado has discovered the diversity of political class interests infBräziir However, again he quickly softens his argument by treating class in the style of orthodox sociology. Finally, the third revision entails speaking of/institutional flexibility, and here Furtado _extends.his-argument into the' political realm. The Brazilian economy and society lacks a ruling k class committed to industrialization and the emergence of such a group will | depend upon the flexibility of present institutional arrangements. Ünförtu- 'k nately for Furtado's analysis, .and.Brazil,.the_ac.haal^resjilx^tbe_adsis^wasi_. a^tnilitary coup. "* In the text Economic Development in Latin America,44 the dependency line is fully presented. The economic and social structures^ present-däy Latin] American countries are presented as being the result of the mannéř^OHat/ continent's incorporation into the world capitalist economy. The production] of the dependency position over the period can be characterized as follows: the developments in thought, generally, took the forms of (i) adding a hjstprical perspective and analysis to the structural jind institutional _iretHo3,*7"T giving thTRištoíičär/štrucm of theoretical and empirical content needed to construct a general theory "of dependence and underdevelopment.45 2 'bid-P. 136. u [t"d. p. 139 $ oßZt^ia8"OSiS 0fthe BmZilian C™> B^ley and Los Angeles, Univer- ä»SÄ£S ptdsedn 1976) ECOn0mÍC D™l°P™< « Latin America, 2nd edn G,rvan 1973 op. en. p". 12. 192 Contemporary Theories of Development The nature of this historical, structural and institutional method is exemplified in the analyses presented. Thus, given circumstances which admit of a description (or disaggregated modelling informed by generally true economic propositions) in terms of economic structure also admit of a •complementary description in terms of a functionally necessary institutional framework. Historical analysis provides data for examples arid the construction of a sequence of models; and, further, borrowing from classical ■■'^economics arid the marxian traditions, an overarching framework which 'firmly locates the Latin American economies in the dependent peripheral areas of the world capitalist economy. Problems of development are then ' treated in terms of the lack of fit between, on the one hand, the possibilities for development provided by technological levels and, on the other, the restrictions and possibilities attendant upon given structural and institutional circumstances. The presentation of new policy work In the text Economic Development in Latin America Furtado presents a-t detailed analysis and treats the historical genesis of the contemporary situ-^*^ ation. The work ends with a chapter summarizing his argument and ldentify-v -2Ŕ: ing the necessary conditions of any future advance. Furtado observes that:\\~-i$ j There can be no doubt that development based on exports of raw mater- . ~z *^ \ ials and import substitution industrialisation has reached the limits*«-; :*#!§£ j of its possibilities . .. Similarly the institutional framework inherited ^ $$> [ from the colonial period ... seems to have exhausted its possibilities of ÍM.^íjgJÍ "adaptation to development needs.46 í-iTA&rS And he adds that discussion has increasingly turned, not surprisingly, tq.therbígc riess of structural and institutional reform. When we look al the broadí.íw-T* s of specific policy proposals he makes, dealing with reforms to internal^ <• i „,...,,„,.„,.,,1 linkageS- what is abundantly clear is that the deSt • -idtEar.' The Development Experience of Latin America 193 If •hit areas oťspecinc policy (jiuť^u,u_____ and external structural linkages, what is abundantly clear is that tne ae-j \ pendency approach is both politically explosive in itsjmplications arid tEat", ! the rěforrn"ťášKš''hFiděriťifie§Tre'"dauntingly difficult. The key problems Jiei -.._ —'"»-''"""XftKřoolitical-economy and its associated struc-i in :"refbtm"tasks ne lucuuuw «»>._____^ , .„"the present make-up "of tKě" political-economy and »^ --—.. \ tures of political power. The dilemma for the theorist in respect of identi- * fying possible routes to the future is that subordinate peripheral capitalist^ , generates a particular pattern of class-based groups, some of whom hayela direct interest in established patterns of outward-directed-,growth. Furtádoj. f^>2 confronts this dilemma with a reform package.! Externally,jthere are^three'f^v [.problems: (a) the re-entry.of regional economies into the expanding*maiji-. £& [jstream; (b) the reshaping of economic relations with the USA; and (c) tßfc far- reshaping of economic relations with the multinational corporal ions.47 And. ^ ^ ;"t-ot-n^llv five Droblems are noted: (a) the reconstruction of economic struCj _i?-- gfÉ marginalization of large sections of the population; (c) the reorganization of the state sector so as to enable the state to assume its proper role, as the -r agent of development; (d) the pursuit of technological autonomy; and (e)_j the establishment of regional cooperation.48 It is clear that these represent an essentially, ^political programme cast in terms of policy proposals. I have followed Furtado in noting the broad headings and it is clear that they admit of detailed elaboration. However, what is-interesting is the political reform strategy they embody. Furtado's dilemma is that of reform-minded theorists generally in that whilst hiš~own work disposes him to reliance upon persuasion his circumstances are not) obviously conducive to the efficacy of reasoned debate. Furtado's solution]) ľ reyolyes_around the key role of the state in the pursuit of development, but] 1 the pre1iegt^a_te,,xeprj^ 1 arenot^general. In other words the vehicle of the: solution to the problem of | ^development is actually a part of the problem. Furtado offers a reformist pol -J itics For the moment we can note that in Furtado's work the dependency, approach emerges in all its subtlety and intellectual power. In a subsequent 1978 text entitled Accumulation and Development,49 Furtado tackles a broad-' scale discussion ofdependency, seeing it as a structural condition bequeathed by history. The themes of the earlier "work" are here pursued in a broad, cultural, historical and theoretical text which the author calls an 'academic anti-book'50 as the issues will not fit into available social science categories. The Legacy of Dependency Theory In recent years one might suggest that the broad tradition of work known as dependency theory has been out of fashion in the First World. The initial English-language presentation of the material of this tradition took the '- form of polemical interventions within intra-First World theoretical debates and this had the unfortunate, effect of confusing the reception of the lessons of dependency theory as those ill-disposed on political grounds^were able WO dismiss the entire approach as left-wing propaganda.51 Nonetheless it "seems to me that we can take from this material" ä useful concern for " hjjkmg structural and agent-centred explanations. It is clear that depend- , ehcy theory has Been presented in diverse guises and that it has generated "< extensive critical debates. In its initial formulations it was shaped by the particular historical experience of Latin America in_the_L940s-arid 1950s' s-whÄloňg^estaEIishedjrading.and economíčpattérns were disturbed by the epIsKJaJTof the Second World War and occasioned a measure of import- supitituting industrialization. These circumstances weretheorized by the ííoup ot^coriomištS^äFECLA led by Prebisch52 and their work issuedin a novel structuralist economics oriented to informing the policy positions of . M8 •49' Ibid.', C. Furrarln 197R Arr.umulatinn and Development, Oxford, Martin Robertson. 194 Contemporary Theories of Development governments concerned specifically with national development. This work provided the intellectual base upon which the broader schemes of dependency theory were articulated. Against the schemes of analysis and policy advice derived from the work of orthodox First World economics and development theorists the proponents • of dependency stressed: (a) the importance of considering both the historical I experience of peripheral countries and the phases of their involvement within j wider encompassing systems; (b) the necessity of identifying the specific eco-; nomic, political and cultural linkages of centres and peripheries; and (c) the : requirement for active state involvement in the pursuit of development. 'r The work of the modernization theoristsrwas_essentially_ahistpr]cal. The í diverse experience of the countries of the Third WoríčTwas"aggregated in 5"' terms of a notion of traditional society which in turn was merely a residual [category which summarized the ways in which these countries failed to ']exhibit the traits of modern societies. The model of the modern was the. j/nodel of the USA. In this way the historical experience of the countries of , /the Third World was both denied and assimilated to the historical expert^ -', /tence of the developed West.^As A. G,. Frank was to point out, the theorists] *ri ,' of modernization managed both to deny any.history to the countries of the.;« '(^ Third World by simply calling them traditional and moreover managed .to Ĺ ■'' j ignore the fact that it was precisely the history that they did have that}.} í explained their present dependent underdeveloped situation. A related fur-v" ^ther revision to the familiar modernization theory story is generated by C looking at the experience of history not as a smooth evolutionary progress from traditional to modern, or uncivilized to civilized, but in terms of a series of relatively discrete phases within which patterns of development are developed over time. In the case of the countries of the Third World the dependency theory position offers a story of the incorporation of these territories within the expanding sphere of the metropolitan industrial capitalist system and the subsequent reworking of this relationship according i to the schedules of demands of the developing core. The present phase oi j peripheral capitalism is but the latest in a series of asymmetrical relation-I ships of periphery and core. The theory of modernization worked with an evolutionary model of change which was unpacked in terms of the structural-functionalist analysis of the logic of industrialism. The approach was focused on dynamics of change which were internal to the countries in question. However, the dependency theory approach recalled attention to the whole issue of the • broader political-economic contexts within which particular nationstates (,X*! operated. The dependency theorists argued that the relevant context within/l ^::. which the historical development of the countries of Latin Amencaj:oulujJr'^| J appropriately be analysed was the global industrial capitalist system. W place of the modernization theory's focus on economic, social and cultural patterns internal to the countries of Latin America the dependency theorists ^ i insisted that a crucial aspect of the entire experience of these countries wasj to be found in the pattern of linkages which they had with the wider globa* Ail m The Development Experience of Latin America 195 economic, social and cultural linkages which the peripheral countries had with the powerful metropolitan core countries. The conclusions which the theorists of dependency drew in respect of/ the appropriate spread of policy for local national governments committed; to the pursuit of national development goals was sharply different from f the proposals of modernization theory. Against the modernization theory^ informed proposals to rely upon the marketplace, which entailed simply reaffirming an upgraded version of the historically generated and debilitat-|| ing role of primary product exporter, the theorist of dependency looked | to foster an independent pattern of development. The strategic differences f with modernization theory came to revolve around the role of the state, which was to become the key vehicle of the new political-cultural project df autonomous development. This was to be the overriding objective in the attempt to remove the damaging handicaps of dependency. It is clear that" many development theorists would regard these three^ broad ideas as the positive legacy of dependency theory. In the work of/ Cardoso and Faletto the material of dependency theory offered a restatement of the core concerns with analysing complex change in the industrial I capitalist system which had been addressed by the classical theorists of the/ nineteenth century.53 The work of dependency theory recalls a very rich intellectual tradition.54 Chapter Summary The central claim of dependency theory was that the circumstances oil the underdeveloped were, to a significant extent shaped by the global I , structures within which they found themselves, in particular the dom-'j - inance of the West. An analysis was presented which spoke of the-* historical development of powerful centres and weak peripheries. The ~ peripheries supplied primary products and low-tech manufactures to"tKe HrsTWorlcf in' exchange foT high-techTgoodsľŤhis~'ecoriorriic dependency wasTuHh'ef expressed" in politicaľaŕid cultural dependency. The overall result was the condition known as underdevelopment which would continue for as long as the structural conditions. The solution was there-1 fore to weaken the grip of the global system with trade barriers, controls í pn multi-nationals, and the formation of regional trading areas so as f fo permit nationalist governments to pursue goals of national develop-' fti&it. It was an influential approach in the 1960s and 1970s, although Jfl; its- radical political forms it subsequently became unfashionable. M Cardoso and Falerto 1979 op. at. a n> lnflllential reconsideration of the approach is D. Seers ed. 19S1 Dependency Theory: 2 critical Reassesment, London, Pinter See also M. Bienefeld and M. Godfrey eds 19S9 UNDERSTANDING AND MANAGING THE HUMAN SIDE OF WORK sixth edition Jerald Greenberg The Ohio State University Robert A. Baron Rensselaer Polytechnic Institute PRENTICE HALL, UPPER SADDLE RIVER, NEW JERSEY 07458