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A Radical Invitation for Latin America

The Legacy of Andre Gunder Frank's 'Development of Underdevelopment'

Andre Gunder Frank

Andre Gunder Frank

Felipe Antunes de Oliveira is a PhD candidate in international relations and an associate tutor at the University of Sussex.

In September 1966, Monthly Review published an article that would not only reshape the field of development studies, but would also inspire ongoing debates over economic growth and revolutionary change in Latin America and the global South. Andre Gunder Frank’s “The Development of Underdevelopment” is widely recognized as one of the founding texts of dependency theory, influencing generations of academics and activists. Admired, followed, criticized, denounced, and rediscovered, Frank’s seminal text deserves a place among the key documents of postwar radical political economy.1

While the essay’s immediate impact can be partly attributed to the lucky timing of its first publication, its real power lay in the sheer audacity of Frank’s challenge to mainstream conceptions of development. Amid the crisis of Latin American national-developmentalism, the article filled a glaring political and intellectual gap, offering a persuasive analysis of the region’s persistent economic underachievement, and as a corollary, proposing a radical line of political action in response.

A little more than fifty years on, the main ideas introduced in “The Development of Underdevelopment” still illuminate some aspects of recent struggles and shortcomings among left-of-center governments in Latin America. The contemporary disaster of neo-developmentalism, which bears important similarities to the crisis of Latin American developmental states in the late 1960s, invites us to revisit Frank’s thesis. Most importantly, the bold postcolonial challenge posed by Frank’s work has yet to be fully met by Latin American scholars and social movements.

A New Agenda

Frank starts by noting that “most of our theoretical categories and guides to development policy have been distilled exclusively from the historical experiences of the European and North American advanced capitalist nations.” These “categories” are in turn immediately applied to underdeveloped countries, as if “their past and indeed their present resembles earlier stages of the history of the now developed countries.”2 The resulting public policy prescriptions consistently fail to deliver development, instead perpetuating underdevelopment—a state of persistent poverty, backwardness, and economic dependence. This ignorance of the historical specificities of peripheral countries hides the fact that these countries are not at a similar stage to which developed countries passed through decades or centuries ago, but were actually contemporary to them from the very start. Underdevelopment at the periphery of the world capitalist system was and remains a twin sibling of development at its center.

One of the reasons for the enduring influence of Frank’s text is precisely because it opened up a historical-economic research agenda centered on the developmental experiences of underdeveloped countries. This agenda was fruitfully followed by Latin American, African, and Caribbean scholars, and is still open to new collaborations and insights. Rather than outlining a mechanical or deterministic scheme of necessary causation between development at the center and underdevelopment at the periphery—as it has often been misread—Frank’s article instead invites historical research capable of showing the specificities of development trajectories both within and across peripheral countries.

“The Development of Underdevelopment” is not simply a call to take the history of peripheral societies seriously—a point that, in itself anticipates the core claim of contemporary postcolonial scholars. Frank goes further, suggesting that the process of mutually reinforcing development and underdevelopment follows an inherent logic, so that “the present underdevelopment of Latin America is the result of its centuries-long participation in the process of world capitalist development.”3

Frank proposes a new research agenda, based on five original hypotheses: (1) development in peripheral countries and regions is “limited by their satellite status”; (2) peripheral regions “experience their greatest economic development…if and when their ties to their metropolis are weakest”; (3) the most underdeveloped regions are exactly those “which had the closest ties to the metropolis in the past”; (4) Latin America’s huge agrarian properties (the “latifundium”) were formed from the beginning as “commercial enterprise[s]”; and (5) the seemingly “semi-feudal” and archaic latifundia are actually the leftovers of decaying regional economies integrated into the international capitalist market.4

Looking back in 2017, it is clear that some of these propositions have aged better than others. Hypotheses 4 and 5 belong to an important but decidedly outdated debate on colonial modes of production in Latin America, marked by what Ramón Grosfoguel acutely called “feudalmania.”5 Indeed, as Frank claims, to describe the region’s traditional productive structures as “feudal” is inaccurate, as they were built from the start to serve international markets. At the same time, categorizing modes of production founded on unfree labor as “capitalist” is not much better. Fifty years later, this debate has lost its relevance. Most critical scholars would agree that the feudalism-capitalism divide does not accurately describe the transformations of productive structures outside Europe. Frank’s own calls to bring the historical experiences of peripheral countries to the forefront of development analysis should serve as a warning against the simplistic terms of the debate about the preponderance of feudalism or capitalism in colonial Latin America.

The first three hypotheses, however, hold much greater contemporary interest. The historical conjuncture that inspired them—the stagnation of Latin American economies in the 1960s—in many ways resembles the region’s political-economic situation today. Once again, Latin American peripheral development seems to be systematically blocked by a complex interaction of international constraints and entrenched class privileges. Contrary to neoliberal nostrums, international trade appears more as a source of continuous imbalances than as an opportunity to “catch up” by maximizing “comparative advantage.” The disjunctive “underdevelopment or revolution” seems to make sense. Nevertheless, while Frank had a clear idea of what “revolution” meant, contemporary revolutionary perspectives are far less straightforward, despite widespread disillusion with capitalist promises of prosperity.

Catching Up and Lagging Behind

In the first half of the twentieth century, and particularly after the 1920s, Latin American economies underwent a swift and disruptive modernization. In Argentina, Brazil, and Mexico, and to a lesser extent in smaller countries, agrarian export regimes gave way to rapidly growing industrial economies. Fueled at first by a limited domestic demand for industrial goods that could not be met by Western nations during war and Depression years, industrialization was dramatically expanded by state intervention, typically via high import tariffs, nationalization, and direct investment in strategic sectors (steel, energy, and transport). Lázaro Cárdenas in Mexico, Getúlio Vargas in Brazil, and, above all, Juan Perón in Argentina built their popular images as the protectors of a nascent industrial working class, arbitrating class conflicts, promoting labor legislation, and guaranteeing the expansion of the internal market to foster the demand needed for continuous industrialization.

By the beginning of the 1950s, it appeared to be only a matter of time before larger Latin American nations caught up with the developed capitalist countries. The process of urbanization and the accompanying proletarianization of surplus agrarian workers would soon be completed, and modern industrial economies, complete with dynamic and mature mass-consumption markets, would finally emerge.

This brilliant future failed to materialize, however. Social mobility clashed with the ruling classes’ privileges, anchored in steeply hierarchical agrarian structures, particularly in Brazil and Argentina. Economic growth slowed, and modernizing administrations were faced with much tougher distributive choices.

The conflict between different factions of labor and capital, temporarily mediated by national-developmentalist governments, could no longer be contained. In Brazil, the moderate reformist administration of João Goulart was toppled in 1964 by a civil-military conservative coalition. In Argentina, after the military coup that removed Perón from power in 1955, a succession of institutional ruptures in 1962, 1966, and 1976 revealed the scars of a deeply divided society. Most dramatically, in Chile, after winning the elections, a broad socialist alliance led by Salvador Allende was ousted from power in 1973, ushering in the state terrorism of Pinochet, who in turn made the country a guinea pig for neoliberalism.

As Latin American societies grew ever more polarized, the working class could claim some Pyrrhic victories, including Allende’s election in 1970. In one case, however, this victory was decisive: the Cuban Revolution of 1959. The triumph of Fidel Castro and his comrades against the popularly hated dictatorship of Fulgencio Batista proved to a generation that a radical revolutionary path out of the underdevelopment impasse was indeed possible. Inspired by the Cuban guerrillas, revolutionary movements against authoritarian governments broke out in almost every Latin American country—sometimes in open defiance of the region’s established Communist parties, most of which remained wedded to the Kremlin’s stagist view of social change.

“These essays were written to contribute to the Revolution in Latin America and the world,” Frank declared in the preface to his second book on Latin America, published in 1969.6 And indeed, the volume’s first essay is a reprint of “The Development of Underdevelopment.” Frank therefore recognized that his theoretical considerations carried profound political implications. His endeavor was to reveal the false promises of capitalist development, which, as presented in his first three hypotheses, could only produce the development of underdevelopment. The sole hope for real development in peripheral countries lay in revolutionizing their internal class relations—themselves molded by their peripheral condition—and decoupling from international capitalism, the ultimate source of Latin America’s enduring underdevelopment.

Frank’s prediction that no real development was possible within capitalism was almost immediately challenged by the facts. At the end of the 1960s and into the early 1970s, economic growth resumed in Latin America, and average GDP growth in the region reached 6.2 percent a year in the decade following the publication of “The Development of Underdevelopment.” This is even more impressive when compared with figures for other areas in the same period: world average annual growth was 4.7 percent, while the U.S. economy grew by only 3.5 percent a year between 1966 and 1976.

Latin America, it seemed, was finally catching up. Brazil experienced a “miracle” between 1968 and 1974, with the economy booming by 14 percent in 1973 alone. Even as the advanced capitalist countries of the West remained mired in sluggish growth, in Latin America the “stagnation thesis,” originally formulated by Celso Furtado and other researchers from the United Nations Economic Commission for Latin America and the Caribbean (CEPAL)—and to which Frank partially adhered—was completely discredited. In the 1980s and 1990s, the rapid growth of East Asian countries seemed to provide further and conclusive evidence against Frank’s dependency theory.

Former dependentistas, most notably Fernando Henrique Cardoso, accordingly abandoned Frank’s ideas and embraced the chimera of capitalist development once more. In a half-hearted act of self-criticism after assuming the Brazilian presidency, Cardoso dismissed the idea that peripheral countries were developing in “distorted” ways:

Today we know that it is not true. Countries which were able to manage their economies sensibly to the transformation of modes of production within capitalism, as well as to social issues, have had more favourable trajectories than others. The case of the Asian Tigers is well-known. What remained of “determinism” in the dependency theory, maybe a Marxist trait—and I always criticized determinism—certainly must be fundamentally reformulated.7

In this view, development is essentially a matter of national elites’ competence, of “sensible” economic management. Yet Cardoso’s own administration in Brazil (1995–2002), like its contemporaries elsewhere in Latin America, failed to deliver the long-expected capitalist catch-up. The neoliberal cycle in Latin America—in which Cardoso played an important part—produced modest average growth rates at best, and even led to economic disaster in Argentina. The neo-developmentalist cycle that followed initially showed limited but promising results—particularly in poverty reduction—but now appears to be ending on a melancholic note. Can Frank’s much-maligned dependency hypothesis help explain why the development path in Latin America seems permanently blocked?

Neoliberalism, Neo-developmentalism, and Recession

After the short-lived economic miracle of the late 1960s and early 1970s, a pair of oil shocks and a sharp rise in U.S. interest rates precipitated the Latin American debt crisis. Inflation peaked in many countries, as the distributive conflict returned with a vengeance as economic activity slowed. Between 1982 and 1992—the so-called “lost decade”—average annual growth in the region dropped to an anemic 1.9 percent, well below world and U.S. averages (3.0 percent and 3.1 percent, respectively). Latin America was lagging behind once again.

On the pretense of public demand to contain inflation and rebalance state budgets, a wave of neoliberal reforms swept the region in the 1990s. The developmentalist state of the previous half-century was rapidly dismantled: public companies were privatized, key sectors were deregulated or re-regulated, and checks on international trade were dropped. But instead of unleashing productive forces and accelerating growth, these reforms created the conditions for a concatenation of crises: Mexico in 1995, Brazil in 1999, and Argentina in 2001. The last of these produced a political and economic meltdown that rendered the country effectively ungovernable. Amid looming recession, mass unemployment, and imposed limits on cash withdrawals, the streets of central Buenos Aires were overtaken by riots. Que se vayan todos, chanted the angry mob—“everyone must go.”

Demoralized and discredited, neoliberal governments gave way to neo-developmentalist administrations in the first years of the twenty-first century. Spirits lifted as socialists returned to power in Chile, left-wing Peronists won in Argentina, an indigenous Aymara was elected in Bolivia, and a trade union leader became the first working-class president of Brazil. A comprehensive U.S.-backed continental trade agreement was dumped under the leadership of President Chávez in Venezuela. Everywhere, the promise of equitable, sustainable, sovereign development seemed once more within reach. The state again took upon itself the responsibility of fostering economic growth. This time, however, left-of-center administrations pledged to stand firm on the side of the poorest, to guarantee that the fruits of economic growth would be fairly shared.

For a few years, a smaller version of the 1960s–1970s miracle appeared to take place. Between 2003 and 2010, average GDP growth rates in Latin America reached 3.9 percent, once again exceeding the world (3 percent) and United States (1.7 percent) averages. This most recent growth cycle was based on two complementary sources of demand: first, external demand for Latin American agrarian and mineral commodities, chiefly soy beans, animal protein, iron ore, and oil; second, internal markets—particularly in Brazil and Argentina—fueled by redistributive policies and a personal credit boom. In neo-developmentalism’s pre-crisis heyday, internal and external constraints on development once again did not seem as inescapable or decisive as Frank suggested. The international market appeared to steadily drive capital accumulation, while redistributive economic policies could in turn prevent the ruling classes from exploiting economic growth for their own advantage.

As we now know, however, this progressive cycle of accumulation would not last. The region’s current economic crises, as well as the weakening of left governments and the restoration of neoliberal parties in Argentina, Brazil, and elsewhere, suggest that Frank’s hypothesis may still capture a deeper truth about the limits to peripheral development. As with the classical developmentalist cycle overseen by Cárdenas, Vargas, and Perón, the recent expansion of Latin American economies ultimately depended on favorable cyclical conditions abroad—which cannot be expected to last for long—and soon reached its internal limits once social mobility menaced the relative position of the ruling class.

Then as now, the reversal in international trade conditions took the form of a steep drop in international prices for Latin American commodity exports. The price of a metric ton of soybeans, for example, fell nearly 40 percent from about $550 in April 2014 to little more than $350 a year later, decimating Argentine, Paraguayan, and Brazilian exports. A similar reduction in the prices of minerals affected Chile, Peru, and Brazil. An even more dramatic fall in oil and gas prices has hit Venezuela, Ecuador, and Bolivia, with devastating effects. Mexico, which in recent decades has attached its market to that of the United States, chronically depends on the latter’s economic health. This situation may yet degenerate further, depending on the pace and intensity with which the U.S. Federal Reserve raises interest rates—thereby forcing all Latin American central banks to do the same, to forestall capital flight. Finally, the region’s diplomatic and economic ties to the United States are now subject to the whims of its uniquely hostile and reckless new president.

Once again, in times of hardship, even less space remains for incremental gains by the working class, causing the conflict between capital and labor to again rise to the surface. The Peronist party lost the elections in Argentina by a narrow margin after facing the fierce opposition from the landed oligarchy and the country’s most powerful media conglomerate. The country subsequently entered a period of open political contestation, with weekly mass demonstrations filling the streets of Buenos Aires. In Brazil, the political scene is still more uncertain, as the elected government of President Dilma Rousseff was ousted in what has been widely considered a legislative coup, on tenuous allegations of budget mismanagement. The new administration has been deemed illegitimate by all left-wing parties and rejected by most of the population. Despite his lack of any popular mandate, President Temer has announced a series of neoliberal measures that directly threaten the social benefits enjoyed by the poorest fraction of the working class in Brazil over the last decade. In Bolivia and Venezuela, the traditional oligarchic opposition forces that appeared hopeless just a few years ago now show real chances of winning power. The recent victory of Lenín Moreno in Ecuador’s presidential election offers a note of hope, but the overall outlook remains bleak.

Across Latin America, not only the pink tide is at low ebb. With the revival of neoliberalism, we are on the brink of a secular reversion of recent achievements in human development, painfully built by progressive governments in the last neo-developmentalist cycle—seeming to tragically confirm Frank’s hypothesis that Latin American development is intrinsically limited by its “satellite status.”

A New Horizon?

The crucial difference between the crisis of national-developmentalism during which Frank wrote his text fifty years ago and the present crisis of neo-developmentalism is that Frank could look toward a clear revolutionary horizon. Today we are trapped between neoliberalism and neo-developmentalism. The crisis of the latter means the return of the first.

In Frank’s day, the example of the Cuban Revolution and the very existence of the socialist bloc—despite the well-deserved critiques that leftists of many stripes had levelled against the Soviet Union—gave powerful credibility to the claim that alternatives to capitalist development were feasible. Now, after what Brazilian sociologist Ricardo Antunes has called the “neoliberal desertification” of the 1990s and the demoralization of Latin America’s moderate left in the 2000s, it is difficult to devise revolutionary perspectives that do not seem hopelessly remote from reality.8 This is probably the worst face of the recent defeat of neo-developmentalism: lost amid corruption allegations, shameful co-option by traditional elites, and managerial incompetence, the moderate left has inadvertently bolstered the neoliberal creed that “there is no alternative” to global capitalism.

At this point, “The Development of Underdevelopment” offers a lasting insight for students of contemporary Latin American development. Frank’s article and the scholarship it inspired broke with the arrogance of Northern academia, which, then as now, abounded in simplistic solutions to remedy underdevelopment in the world periphery. Frank closes his essay with an invitation to “[social] scientists of underdeveloped countries.” We are, he writes, those best placed to “devote the necessary attention to these problems and clarify the process of underdevelopment and development.” The overcoming of social problems in peripheral countries can only be possible once we stop “importing sterile stereotypes” that do not respond do our “liberating political needs.”9

The task of reimagining revolutionary horizons in an age of triumphant neoliberalism requires the same kind of bold contestations of mainstream narratives of development that Frank carried out fifty years ago. With the growing crisis of elitist forms of knowledge production witnessed over the last half-century, it is now clear that Frank’s invitation must be extended beyond intellectual circles in the global South, to include insights from social movements and new modes of mobilization from below. The recovery of the revolutionary imagination is urgently needed to open new perspectives for the Latin American left and dismantle the oligopoly of the legitimate development discourse shared by both neoliberals and neo-developmentalists.

On the theoretical front, following in Frank’s footsteps, we need to further expose the fallacies of mainstream development strategies that always demand working-class sacrifice in the name “catching up” with “developed” countries in an idealized future that never arrives. As Frank and a number of critical writers after him showed, the expectation that Latin American countries would one day “develop” into Southern counterparts of the central capitalist countries is a dangerous Eurocentric chimera.10 Because the old promise of capitalist development continually renews itself, the critical task of uncovering its theoretical incongruences and historical failures is a permanent intellectual challenge for the Latin American left.

On the political front, the crises of representation now faced by bourgeois democracies—and not only in Latin America—open up new possibilities for political mobilization from below. The last twenty years have seen a promising re-emergence of social and popular movements in the region, after decades of repression.11 Renovating outdated forms of party organization to create more horizontal political structures, open to participation by independent popular organizations, is an urgent need if we are to recover any possibility of effectively opposing and reversing the latest neoliberal wave. Despite its institutional limitations, the Uruguayan Frente Amplio offers the most successful example, particularly during President Pepe Mujica’s term.

Ultimately, theoretical and political efforts must converge in the definition of a new revolutionary horizon, which we can barely envision now. The recent crisis of neo-developmentalism provides new evidence that capitalist development, whether managed by governments of left or right, cannot break the chains of underdevelopment. Fortunately, as Frank suggested fifty years ago and surely would again today, our revolutionary imagination need not, indeed cannot, be restricted to the narrow confines of capitalism.

Notes

  1. Andre Gunder Frank, “The Development of Underdevelopment,”Monthly Review 18, no. 4 (September 1966): 17–31.
  2. Frank, “Development of Underdevelopment,” 17.
  3. Frank, “Development of Underdevelopment,” 21.
  4. Frank, “Development of Underdevelopment,” 23–29.
  5. Ramón Grosfoguel, “Developmentalism, Modernity, and Dependency Theory in Latin America,”Nepantla 1, no. 2 (2000): 347–74.
  6. Andre Gunder Frank,Latin America: Underdevelopment or Revolution (New York: Monthly Review Press, 1969), ix.
  7. Fernando Henrique Cardoso “Desenvolvimento: O Mais Políticos Dos Temas Econômicos,”Revista de Economia Política 15, no. 4 (60) (1995): 151, my translation.
  8. Ricardo Antunes,A desertificação neoliberal no Brasil: Collor, FHC e Lula(Campinas: Autores Associados, 2004).
  9. Frank, “Development of Underdevelopment,” 30.
  10. For some notable contemporary Latin American critiques of stagist and Eurocentric views of development, see Claudio Katz,Neoliberalismo, Desarrollismo O Socialismo (Buenos Aires: Ediciones Cooperativas, 2014); Francisco de Oliveira, “The Duckbilled Platypus,”New Left Review 24 (2003): 40–57; Abelardo Mariña-Flores, “Beyond Neoliberalism and New Developmentalism in Latin America,” in Lucia Pradella and Thomas Marois, eds.,Polarizing Development (London: Pluto, 2015), 145–56.
  11. The Landless Worker’s Movement in Brazil, the Zapatistas in Mexico, and the Mothers of the Plaza de Mayo in Argentina are examples of social and popular movements on the frontlines of resistance against the neoliberal reforms of the 1990s. Since 2001, the World Social Forum has likewise been an important venue for activists to renew, energize, and articulate social movements in Latin America. In Argentina, a number of local organizations are now developing truly horizontal forms of organization (see Marina Sitrin,Horizontalism: Voices of Popular Power in Argentina [Oakland: AK, 2006]). In Brazil, the Free Fare Movement was instrumental in voicing popular disillusion with neo-developmentalism, fueling the mass demonstrations of 2013 (see Andre Singer, “Rebellion in Brazil,”New Left Review 85 [2014]: 19–37). The Homeless Worker’s Movement has also emerged in recent years to become a crucial political force within the Brazilian left.
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