Agro-Industrialization, Petrodollar Illusions and the Transformation of the Capitalist World Economy in the 1970s: The Latin American Experience

Abstract

A transformation of world capitalism took place during the 1970s. Profitability decline in core countries was compounded by an increase in world oil prices connected to the rise of OPEC’s oil rent. In this context, a fraction of the Latin American semiperiphery rose in industrial prominence but ultimately collapsed. A combination of recycled petrodollars and an agrarian transformation underwrote this semiperipheral agro-industrial rise. By 1982, however, illusions of advance resting on industrialization were undermined by the debt crisis. While part of the semiperiphery embraced debt-led industrialization, capitalism switched gears into a regime where financial power, not industrialization, became the main sign of coreness. This process is examined through a perspective of capitalism as (simultaneously) world economy and world ecology, where the production of nature and the production of capital are organized in order to secure endless profitability. Nature, in the form of oil, labor-power and agricultural exports takes center stage.