Dependent Capitalisms in Contemporary Latin America and Europe

This chapter develops three mechanisms that lie behind dependency relations: markets, leverage, and linkage. These are useful for understanding the way dependency functions in a particular situation, but they are also useful for making comparisons across time and space. Applying these concepts to the shifting hegemony between the United States and China in the international arena, I study US–Latin American relations in the twentieth century and the difference with emerging China–Latin American relations in the twenty-first century. I argue that the specific characteristics of dependency vary between the two periods, leaving differential spaces for developmental projects in the region.

The chapter provides an overview of the way in which the dependency research program was adopted and adapted in the European academia. In the 1970s and 1980s, dependency theories inspired the analysis of uneven development and developmental strategies with a central focus in Southern Europe. The crisis of 2008 onwards has contributed to a rediscovery of the dependency approach with a new focus on Central and Eastern Europe. Thereby, the European Dependency School (EDS) further developed and adapted the dependency approach by linking it to other theoretical traditions such as regulation theory in order to explain the crises that hit the European peripheries particularly hard. More recently, academics in Europe have started using the dependency approach to better understand the conditions of policymaking within the European Union (EU) and to discuss possible strategies to overcome dependency and promote development. The chapter offers a detailed presentation of two mechanisms of dependency—dependent industrialization and dependent financialization—and their evolution in the EU.

Is dependency theory gender- and race-blind? Appearing in Latin American in the 1960s, dependency theory flourished in a moment when social sciences at large began to embrace critical approaches centered on race and gender. However, with the exception of the pioneering work of Vânia Bambirra, original dependency writers did not engage directly with the systemic consequences of entrenched gender and race inequalities. Instead, anti-racist and anti-patriarchal struggles were subsumed under the class struggle. In this article, I argue that, although gender and race inequalities were not in fact among the core concerns of dependency theory, there is a fundamental complementarity between feminist, anti-racist, and anti-colonial approaches and dependency theory, at least in its most radical, Marxist expression. Specifically, Marini’s concept of the super-exploitation of labor and Bambirra’s concept of ‘dominated–dominant’ ruling classes call for gendered and racialized definitions of the super-exploited and the Latin American ruling classes. By expanding the scope of these two key concepts, I invite contemporary scholars to explore the intersectional potentialities of dependency theory.

This chapter revives some of the original insights from the dependency research program in order to understand the situation of the Latin American continent after the commodity boom decade. First, it is argued that we cannot only depend on macroeconomic explanations of what went wrong with the different countries’ economic policies after the commodity boom, nor on an evaluation of the strength or weakness of domestic economic institutions, but we have to consider, in the best tradition of the dependency research program, the character of the State and the composition of the social coalition. Second, following the idea of the existence of diverse situations of dependency, it argues that the combination between a certain form of the State and specific social alliances, can generate diverse types of capitalism in the periphery. To show this, we analyze in detail the situation of the more redistributive types of capitalism (of the rentier and developmentalist type) and how they coped with the end of the commodity boom. The analysis shows that the form of the state and social alliances can not only generate variations within types of capitalism, but also diverse trajectories within them, as the cases of Ecuador and Bolivia attest.

This chapter analyzes developmental pathways and economic growth models in Eastern and Southern Europe from the perspective of the dependency research program. It focuses on two main situations of dependency in Europe: peripheral financialization with demand-led growth in the South and dependent reindustrialization through foreign direct investments with export-led growth in Central and Eastern Europe. Contrary to existing structuralist approaches, the chapter argues that these situations of dependency represent different solutions to the challenge of market integration with much richer and more developed economies of the European core. While the South sought to protect domestic firms, allowing for or even directly fostering deindustrialization, Central and East European countries aimed to preserve industrial legacy even at the expense of FDI-dependency. Such responses were in turn shaped by specific domestic political coalitions as well as by different strategies of the EU, which left more or less space for reproduction or transformation of domestic coalitions. While contemporary situations of dependency bear different developmental implications than those in the twentieth-century Latin America, the main insights of the dependency research program remain pertinent for analyzing the challenges of core–periphery integration in the twenty-first-century Europe.

The rise of populism has cast doubt on the sustainability of the marriage of liberal democracy and neoliberal capitalism. There is an urgent need to understand how developmental bottlenecks foster populist social coalitions. This paper builds on the dependency research program to demonstrate how the commonalities and differences in Poland’s and Hungary’s dependent integration into the global economy gave rise to two varieties of populism. While the two countries employed different industrial policies leading to different levels of domestic economic disintegration, they were more similar in the dimension of social policies before the populist breakthrough, giving rise to profound social disintegration in both countries. The disillusionment of the working class with the dependent liberal regime destabilized the social coalitions that were sustaining liberal democracy. The severe disintegration of the economy in Hungary also induced support for national-populism in the domestic business class, leading to a new compromise with transnational capital in the technological export sectors. Poland did not experience such economic disintegration; thus, the alliance between the domestic business class and national-populists is more ambivalent. Hungary’s populism redistributes significant resources upward, while Poland’s populism is more open to redistributive demands of the popular classes.

The chapter analyzes the development expectations and the rise, as well as failure and demise, of neo-extractivism in South America since the beginning of the 2000s. In particular, we focus on the structural background as well as on the underlying preconditions of the neo-extractivist development model. The chapter adds another aspect to the ongoing discussion on dependency and neo-extractivism that has hardly been considered so far: the prevalence and relevance of rent. Following the concept introduced in the introduction of this volume, we identify a particular mechanism of dependency in the effects of economic rents, understood as a specific form of economic surplus emerging from monopolies, ownership, market restrictions, and the concentration of political power. Rents are an internal as well as external mechanism of dependency, and societies that essentially depend on rent for their social reproduction face serious challenges in approaching diversification and abandoning their rent-based economic sectors, and thereby freeing themselves of dependency. For the dependency research program it must therefore be said in the future: bring rent in.

This chapter explores the relationship between financialization and the construction of business power from a dependency perspective. Focusing on the Chilean pension system, considered an exception among global social security systems due its long-term and sustained continuity as a privately administered and heavily financialized pension system, the chapter exposes how the financial expropriation of social security contributions from workers becomes a source of accumulation for international capital, and of structural and instrumental power for local and foreign business groups. Based on this, it concludes that privatized social security systems act as a “financial valve” mediating local and foreign businesses in what is called “dependent and associated financialization.”

The world has come a long way since the heyday of the dependency research program (DRP, see Chapter 1 of this volume). The rapid industrialization of East Asia, the fall of communism, the advent of the Washington consensus and global neoliberalism, among other processes, all contributed in different ways to the demise of the DRP as theoretical and analytical tool to understand the problems of development and more generally, to understand the dynamics of global capitalism.