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Theory that brings us closer to a world that places “capitalism” firmly in the past (The Dialectics of Dependency reviewed in ‘Systemic Disorder’)

The Dialectics of Dependency
By Ruy Mauro Marini
$26 paper /228 pages / 978-1-58367-9821

Reviewed by Pete Dolack for Systemic Disorder

That some regions have to remain undeveloped so that others can develop has long been one of the obvious realities of capitalism. This is another way of pointing out that massive poverty across the Global South is not the result of some local insufficiency but rather due to the functioning of imperialism, the ongoing effects of colonialism and financial might.

This dynamic has been discussed in detail many times, most notably, in the case of Africa, in Walter Rodney’s classic How Europe Underdeveloped Africa. Latin American authors have tackled this structural inequality in works such as Eduardo Galeano’s Open Veins of Latin America. Other authors, such as Samir Amin in his many works, have looked at this from a broader global perspective. There is no shortage of books that detail, in grisly detail, how capitalism has immiserated much of the world. But what are the structural reasons for this state of affairs?

We are accustomed to thinking in terms of military conquest, invasions and coups. There is a long history here; the United States alone has invaded Latin American countries 96 times, and that total doesn’t include the coups it has sponsored and the governments it has decisively undermined.

In more recent times, financial power through the control of the world economic system and the unrelenting leverage of the dominant position of the U.S. dollar, supplemented through multilateral institutions like the World Bank and International Monetary Fund that pitilessly impose austerity through their one-size-fits-all “structural adjustment programs” on behalf of multinational capital, are deployed more frequently and systematically than raw military power.

Both financial muscle and military muscle are copiously used to elevate Global North capitalist core countries at the expense of the Global South, with the U.S. doing everything it can to maintain its place — more specifically, its multinational corporations’ place — at the apex of the pyramid. Yet it is not only these levers. Capitalism is also kept in place by structural forces. We can’t fully comprehend how the world capitalist system functions without studying its structure, which operates even when financial or military muscle is not at a given moment being directly applied. This is where the Brazilian Marxist Ruy Mauro Marini has stepped in, persuasively arguing that the roles of local bourgeoisies, and not only Northern imperialism (as important as that is), as well as unequal exchange resulting from a subordinate position within a global division of labor, are indispensable to understanding the fate of Global South workers and in particular Latin American underdevelopment.

His essay The Dialectics of Dependency is not a new work, but has been newly translated into English for an audience to whom he is largely unknown. I confess I was unfamiliar with Professor Marini prior to reading a description of the book containing the eponymous essay, published by Monthly Review Press, but was immediately intrigued. I can now say I am pleased to have been introduced to his work and add him to the list of understudied Latin American theorists who should be better known.

The Dialectics of Dependency* contains not only his important essay, but an introduction to the concept, a lengthy essay discussing Professor Marini’s life and extensive work as an activist, writer and professor, and a concluding essay further discussing the concept and situating it as a tool to help guide movements. The two framing essays were written by Jaime Osorio, a close comrade of Professor Marini, and the essay documenting the author’s life and work was written by the translator, Amanda Latimer.

(Although Professor Marini is Brazilian, the essay was developed and written in Spanish during his two decades of exile in Mexico, Chile and Europe.)

Development and underdevelopment go together

That The Dialectics of Dependency was first published in 1973 does not lessen its impact. Dependency is understood as “a relation of subordination between formally independent nations, in the framework of which the relations of production of the subordinate nations are modified or re-created to ensure the expanded reproduction of dependency,” the outcome of which “cannot be anything other than than more dependency.” This can not be liquidated other than through “eliminating the relations of production it involves.” To be less tautological, dependency can be defined as the subordination of economies and countries to other economies and countries.

Latin America was plundered throughout the colonial period, with Christopher Columbus inaugurating slavery, forcible precious-metal extraction and the genocide of native peoples. Formal independence for Latin American countries coincided with the Industrial Revolution, during which they “came to gravitate toward England” rather than each other. “Ignoring one another, the new countries would link themselves directly to the English metropole,” Professor Marini wrote, becoming suppliers of foodstuffs and raw materials while importing manufactured products. “Latin America developed in close consonance with the dynamics of international capital.” Colonial metals and “exotic goods” contributed to increased commodity flows and “paved the way” for large-scale industry in core capitalist countries.

English technological advances enabled significant increases in production and the ability to flood markets with commodities. With the displacement of farmers into cities and the creation of a modern proletariat, the incorporation of this new working class into consumption was “an essential step.” In turn, the supply of food from Latin America made it increasingly possible for English capitalism to reduce the value of labor power and thus “achieve a balance between increasing surplus value and, at the same time, increasing wages.” In contrast, “super-exploitation” — a drastic lowering of wages — was the means for Latin American capital to be competitive. Because Latin American production was largely for export, local capitalists did not have to create a local market and could keep wages at extraordinarily low levels because they did not need their workers to be able to buy the products they produce.

Unequal exchange gathered momentum and super-exploitation became the route for Latin American capitalists to maintain their profitability and their places in the global capitalist system. Rather than increase productivity or invest in new machinery, Latin American capitalists have relied on intensifying exploitation, that is through suppressed wages, work speed-ups and increased working hours. While not discounting the very real role of imperialist capital, a key political conclusion of the Marxist theory of dependency is recognizing the “dominant classes [of Latin America] responsibility in reproducing dependency.” Local bourgeoisies earn substantial profits from this arrangement and have no incentive to change it.

Corporations from the Global North have a ferocious need to grab the resources of dependent countries, and local capitalists are happy to help them. This is not to discount other forms of plunder, such as unequal exchange, the extraction of profits through investment, interest on foreign debt and the draining of capital and knowledge by monopolies based in the capitalist core.

Global division of labor fuels unequal exchange

As industry continues to develop in the capitalist core, it becomes more productive and requires greater raw materials, further enforcing a global division of labor. Professor Marini argues that the large quantities of food exported to Latin America to industrialized countries reduced the real value of labor power in the latter, causing higher rates of surplus value and enabling Global North bourgeoisies to capture productivity increases. This aspect is somewhat counter-intuitive, so let us allow the author to explicate it.

“[W]hat determines the rate of surplus value is not the productivity of labor in and of itself, but the degree of exploitation of labor; in other words, the relation between surplus labor time (in which the worker produces surplus labor) and necessary labor time (in which the worker reproduces the equivalent of his wage). Only by altering this proposition, in a manner favorable to the capitalist (that is, by increasing surplus labor at the expense of necessary labor) can one modify the rate of surplus value.”

To make clear what the author is discussing here, surplus value is the amount (or value) produced by an employee beyond the amount that equals the amount that he or she is paid. In other words, if an employee is paid $100 for a day’s work but produces products or services worth $200, then the $100 differential represents the surplus value produced by the employee and which is taken by the capitalist. From that surplus value, once the capitalist takes care of other expenses (such as rent, mortgage, equipment, interest on loans, etc.), comes the capitalist’s profit. A capitalist can introduce a new production technique or new machinery that makes workers more productive and thus temporarily boost profits, but because the capitalist’s competitors will quickly move to introduce the same techniques or machinery, the amount of products will have increased but the surplus value extracted won’t because the price of the product or service will become uniform across the industry with the common adoption of what was originally a breakthrough for the organization that first adopted it. Because more is being produced in the same period of time, the capitalist can reduce the prices of the products or services for competitive reasons, thereby lowering the value of what is produced. To counteract that reduction in value, capitalists squeeze more out of their workforces to increase the surplus value extracted.

Professor Marini, in his discussion of how Latin American food exports led to Global North bourgeoisies reaping the benefits of productivity increases, continues:

“[O]ne task assigned to Latin America, within the framework of the international division of labor, was providing the industrial countries with the food required for the growth of the working class, in particular, and of the urban population, more generally, that was taking place there. … The effect of this supply … would be to reduce the real value of labor power in the industrial countries, which allowed increases in productivity there to be translated into increasingly higher rates of surplus value. In other words, through its incorporation into the world market for wage-goods, Latin America played a significant role in increasing relative surplus value in industrial countries.”

The food exported to industrial centers by Latin America enabled more people to leave farms and migrate to the cities, and the increasing industrialization required more workers to move to where the factories are located. This migration results in more competition for jobs, putting downward pressure on wages.

Visible force, yes, but economics underlies that

Behind the use of military and diplomatic pressure, Professor Marini argues, “is an economic base that makes it possible” and failure to understand that is to obscure “the real nature of international capitalist exploitation.” He writes that rather than believe that equitable trade relations are possible in global capitalism, what is needed is the abolishment of international economic relations based on exchange value.

“Indeed, as the world market attains a more developed form, the use of political and military violence to exploit weak nations becomes superfluous. and international exploitation can rely increasingly on the reproduction of economic relations that perpetuate and amplify the backwardness and weakness of those nations. We see the same phenomenon here that is observed internally in the industrial economies: the use of force to subject the working masses to the rule of capital diminishes as economic mechanisms that enshrine that subordination come into play.”

Countries that are disadvantaged by this unequal exchange seek to compensate by greater exploitation of workforces rather than increasing productivity. In other words, doubling down on being a “low cost” producer — the Global South capitalist can only remain competitive by increasing exploitation to make their products cheap through increasing the intensity of work, lengthening working hours and/or reducing wages. Resource extraction and agricultural products, Latin America’s major contributions to the world economy, require less investment than manufacture. Thus, labor in extraction and agriculture can be intensified with little or no capital. That exploitation can be maximized because the Latin American capitalist is producing for export, and does not need a sizable domestic buying power to reap profits or maintain a market, and all the more can this be done because of ongoing high unemployment and underemployment.

This dynamic does not mean there is no industrialization in dependent countries. Industry does slowly develop, but there is insufficient funds to buy the equipment and machinery needed to produce manufactured products. Importing capital — taking out loans from the North or North-controlled supranational lending organizations — becomes a necessity. In turn, as capitalism stabilized after recovering from World War II, capital flowed preferentially to industry in the Global South, which offered attractive profits due to the low cost and super-exploitation of labor there. And as the pace of technological advancement quickens, machinery becomes outdated quicker and manufacturers in the core capitalist countries can recoup some of their costs by selling outdated equipment to manufacturers in the South.

“Latin American industrialization thus corresponds to a new international division of labor,” Professor Marini wrote. “In this framework, the lower stages of industrial production are transferred to the dependent countries … while the most advanced stages are reserved for the imperialist centers … along with a monopoly over the corresponding technology.” With wages remaining low and unequal exchange maintained through the foregoing processes, new industrialization in dependent countries remains dependent on upper class consumption and exports. Workers’ incomes are too low to buy the products they produce at the same time their productivity rises due to the machinery that is imported, even if that machinery is outdated by the standards of the capitalist core countries. Further investment will be in luxury goods while basic consumer items stagnate. Wages also stagnate, increasing inequality. And dependency on core countries is recreated.

“[T]he structure of production adapts to the structure of circulation inherent in dependent capitalism,” Professor Marini concluded. The trap of dependency can only be ended by putting an end to the global system of capitalism.

Knowledge needed, not fairy tales

The Dialectics of Dependency explicates the above arguments with much technical detail. Although putting forth a persuasive discussion, the book is not necessarily accessible to a reader not already conversant in economics and Marxist terminology. The titular essay is written in a quite abstract manner, which will likely lessen the potential audience. That would be a loss as the book is a valuable, and needed, addition to theory to help our collective understanding of unequal exchange and the roots of deep inequality among the countries of the world capitalist system. Anyone wishing to grasp this enduring international phenomenon would benefit from reading The Dialectics of Dependency. It is not always easy reading but working your way through sometimes difficult and abstract passages will be enriching for any activist seeking to understand how capitalism works.

It also explains why such stratification exists without falling back on under-developed explanations that see only military force without the very structures of capitalism and the system’s perpetual and relentless need for expansion and intensified exploitation. The concluding essay by Jamie Osorio helps explain the implications of Professor Marini’s theory.

His analysis, Professor Osorio wrote, “has shown the naïveté and fallacies of international bodies and academic groups that make extensive descriptive studies and then conclude — like children writing letters to Santa Claus — that it would be good to have a bourgeoisie that is dynamic, autonomous, committed to technological knowledge … willing to create internal markets by paying better wages to most of the working population.”

Rather than believe in Santa Claus or fairy tales, far better that the dynamics of capitalism be grasped in their full dimensions. Only by understanding how and why, and drawing appropriate conclusions, rather than simply observing, can the world’s exploited — the vast majority of humanity — hope to see a better world come into being, a world that will have put capitalism into the history books.

The Dialectics of Dependency: Ruy Mauro Marini

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