Overcoming Underdevelopment. A Research Paradigm

Abstract

1. On the Genesis of Underdevelopment The evolution of the capitalist mode of production on a world scale entailed an unequal international division of labor. This pattern was set even before the industrial revolution and not only through economic means. Societies on the periphery became specialized, in accord with the interests of the metropolitan countries, in the production of export goods for the metropolitan markets. They constituted, at the same timr.e, an external market for the industrial production of the capitalist industrialized countries, which was of great importance for the breakthrough of the industrial revolution. As a consequence of this unequal specialization, the periphery had to import from the industrial capitalist nations: 1) the instruments for the improvement of the productivity of labor, 2) the products that would be required to satisfy any increase in consumption. Hence, in view of the only limited demand for the products of the periphery on the world market, its potential for consumption remained limited. In the capitalist industrial nations the productivity of labor increased due to the accumulation of capital in the productive sector production increased with the expansion of demand to include even the underprivileged masses. As a result, all economic sectors were incorporated in the capitalist economy. In the periphery, by contrast, the development of the capitalist mode of production remained limited to the export sector. This was due to the specialization in the products which constituted a declining share of total world c nsumption and to the impossibility of producing a broader assortment of goods domestically if mass buying power increased. The export sectors were, however, never isolated from the rest of the peripheral societies: they influence and dominate the precapitalist sectors. The coexistence of different modes of production in the periphery, and the consequent coexistence of different social structures, is the focus of the theory of 'structural heterogeneity'. The most important characteristic of structural heterogeneity is deformed reproduction. As a consequence of unequal specialization, markets for manufactured products developed primarily in the industrial nations due to the unequal development of money income. They also possessed competitive advantages by virtue of the infrastructure and educational system necessary for the production of industrial goods. Therefore, capital in manufacturing industry accumulated almost exclusively in the capitalist industrial nations. One consequence was the predominance of agricultural capital in the peripheral countries. To the extent that this agricultural capital was able to realize the surplus value from the labor of its workers and tenants as profit on the world market, this income was either hoarded or converted into unproductive luxury goods. At the same time, the pre-capitalist sectors disintegrated as a result of the importation of European goods and consumption patterns and the stagnation of local subsistence sectors. Since they were no longer able to sustain an expanding population, grow-