Dependent Accumulation and Underdevelopment

This book and these introductory questions to it are an attempt to break out of the vicious circle of ‘development theory’. Most contemporary — that is neo-classical — development theorists are caught in a vicious circle of their own making in that they argue that the poor are poor because they are poor — and the rich are rich because they are rich (Myrdal 1957). For some economists the low level equilibrium trap’ (Leibenstein) manifests itself through a Keynesean demand or market exchange side: since the poor cannot pay, it does not pay the rich to invest, and the poor remain poor. Other economists and most social scientists (in sociology, anthropology, psychology, political science, human geography) are trapped in a vicious circle on the supply or productive side: their theory posits that the poor remain poor because they lack the capital, entrepreneurship and other social, cultural, psychological and political characteristics which these theorists suppose to characterise the industrial capitalist countries and which they therefore suppose to be necessary for investment and development.

We may review the first major period or stage of world capital accumulation, capitalist development and underdevelopment by briefly summarising the international division of labour and pattern of trade between roughly 1500 and 1770 and examining the concomitant transformation of the modes of production in the colonial areas. The associated capital accumulation and capitalist development in the European metropolis is examined as part of the second stage of this historical process in Chapter 4.

An important alternative interpretation to the analysis of capitalist development and underdevelopment by Marxists and the present writer is the interpretation by Max Weber, his followers and his perverters, which has attained dominance in the United States from where it has in turn been re-exported to its cultural neo-colonies. Karl Mannheim (cited by Shapiro, 225) referred to Max Weber as the Marx of the bourgeoisie; and his widow and biographer, Marianne Weber, said that his principal work was an attempt to replace historical materialism as an interpretation. Such otherwise diverse writers as Kautsky, H. M. Robertson, Sorokin, Aron, Bastide, Gerth and Mills, Marcuse, Parsons, Bendix, and Gouldner agree that Max Weber’s work represented an attempt to replace or at least seriously to amend the Marxist theory of economic infrastructural dominance over the superstructure and to lend instead particular importance to psycho-cultural factors and religion to account for the rise of capitalism. Of course, this ambition obliged Weber to devote considerable attention to the work and working methods of Marx, whom Weber respected as an opponent.

The industrial revolution, first in Britain and later in other metropolitan countries, of course involved far-reaching transformations of the metropolitan economy, polity, society and culture that are beyond our scope. The associated technological revolution and innovation, which has received so much attention, cannot be realistically understood in isolation from this process of capital accumulation and market expansion. ‘Whatever the British advance was due to, it was not scientific and technological superiority’, notes Hobsbawm (47); and it is at least symbolic that, as Williams (102–3) recalls, ‘it was the capital accumulated in the West Indian trade that financed James Watt and the steam engine. Boulton and Watt received advances from Lowe, Vere, Williams and Jennings’, and Boulton wrote Watt, ‘Lowe, Vere and Company may yet be saved, if ye West Indian fleet arrives safe from ye French fleet … as many of their securities depend on it.’

This chapter examines a number of theoretical problems posed in classical and neo-classical analysis and in modern bourgeois attempts to find more progressive solutions to them. These problems are posed on the one hand by the classical and neo-classical theses derived from Smith and Ricardo, which advocate an international division of labour and extension of the market through free trade and comperative advantage, leading to some countries’ specialisation in the production and export of staple raw materials for the external market in exchange for manufactures produced in other countries. On the other hand, we may distinguish the theses associated with Friedrich List, Gunnar Myrdal, Rai l Prebisch and lately Arghiri Emmanuel, who seek to challenge the classical thesis by invoking declining secular trends in the terms of trade and/or chronic unequal exchange that disfavour the low-wage raw materials producers, and who recommend an alternative policy of infant industry protection and import substitution intended to develop the internal market.

Our analysis of the three stages of world capital accumulation and the development of underdevelopment in Asia, Africa and Latin America has sought to contribute to the clarification of the relations between the world historical process of uneven capitalist development, the exchange relations and mechanisms that drain capital from the colonialised countries to the metropolis, and the transformations in the modes of production in the latter, which permit this drain but at the same time develop their own structural underdevelopment. Often, more than supplying answers, we have been obliged to raise questions about this process. And we shall have to do the same in our examination below of the transformation of the modes of production in Asia, the Middle East, Africa and Latin America during the third — imperialist — stage of world capital accumulation and capitalist development.

Contrary to orthodox international trade and national development theory, the uneven development of world capitalism was not accompanied by balanced trade (or growth) but rested in fact on a fundamental imbalance of international trade between the developing metropolis and the underdeveloping, colonialised, countries. Except for the years of worst depression in the metropolis, the latter had a constant but growing trade deficit and the underdeveloped countries a trade surplus during the classical imperialist period of world capitalist development at the end of the nineteenth and the beginning of the twentieth centuries. The almost exclusive theoretical and empirical interest in the balance of payments, and obsession with the mechanisms that make it balance, has cast a ‘veil of money’ over the underlying merchandise imbalance of trade whose role, which we believe is fundamental in the process of uneven capitalist development and underdevelopment, has remained all but unperceived. (For this reason also the following discussion can be no more than the preliminary formulation of research hypotheses that demand empirical investigation and theoretical reformulation.)