This 100-page book is a general literature review on the development of Latin America from its independence in the early nineteenth century to 1930,the time of the Great Depression, when their economy collapsed.
(1) Albert's book revolves around two schools in debate, namely, the diffusionists, who maintain that capitalism and interaction with the international economy will spur development, and the dependentistas, who argue that the normal play of the international market, the capitalistic world system, have made Latin America subordinate to the most advanced countries (André Gunder Frank is perhaps the most famous proponent of this theory; his theory is, however, criticized all over by other dependentistas).
What might be a consensus within the dependency school (the dependentistas) is expressed in a comment by O'Brien that 'theories of dependency are trying to show that the internal dynamics of Latin American society and its underdevelopment was and is primarily conditioned by Latin America's position within the international economy, and the resultant ties between internal and external structures.'(p.20)
(2) A second point of contention is in the use of historical materials. As I understand it, this represents the difference of economists and historians. As Albert points out, the dependency school tends to 'employ dubious historical methodology, consisting of an uncritical reliance on selected secondary sources and a tendency to use "historical facts'' to fill in a rigidly predetermined framework.' (pp.20–1) This seems to be a general difficulty in formulating theories, when one is faced with a myriad of factors and facts.
(3) A third dispute is over the term 'development'. Diffusionists tend to measure this by GNP and social and political 'modernisation', while the dependentistas would argue that 'most underdeveloped countries have experienced dconomic growth but not development' (p.23), emphasizing 'structural changes leading to national economic sovereignty and a degree of economic and political equality [Chilcote and Edelstein, 1974, 4, 28].' (p.23)
Albert sets out to evaluate the two schools by examining the post-colonial history of four Latin American countries: Brazil, Argentina, Peru, and Chile. As he himself points out in the Conclusion, the diversity of experience of these countries shows that the vision of any study focusing entirely on external factors will be very limited in scope. In light of this, there is little sense to present the respective history of the four countries here, as that would take too much space, and would hardly seem consistent, as my understanding of it is poor. Instead, I will just take down the main points, separated into three time frames as Albert does.
From independence to the 1880s:
(1) The independence of Latin America is largely associated with the Napoleonic conquests in the Iberian Peninsula (1807–8).
(2) 'The break with Spain and Portugal did not, however, bring with it any immediate changes in existing social and economic structures...(f)or the great mass of the people, the Indians, mestizos and black slaves, independence meant very little as they continued, in most cases, to be ruled by a small white elite.' (p.25)
(3) Neither does independence in any way mean 'isolation' from the rest of the world. Britain became a major player here, signing treaties and investing money. British investment in Latin American governments and railways doubled from 1865 to 1875 (p.29).
The effect of the involvement of Britain is subject to debate, just like many other factors that we will see later on. British demand for treaties could be viewed as no more than asking a trading partner to stick to the market, and its impact on local artisan sectors seem to be overstated; yet for the dependestistas, the market is what they are attacking.
For 1880–1930, Albert employs three categories of factors to systematise the analyses: exports, foreign investment, and immigration.
(1) Export
- There is significant annual growth in export, ranging from 1.3% of Venezuela to 7.6% of Argentina (according W. Arthur Lewis, Growth and Fluctuations 1870–1913 (London, 1978) pp. 196, 203.)
- It is worth noting that Cuba, and the coffee-producing Brazil and Venezuela showed a much narrower export pattern in comparison to Argentina. The following table is taken from p.32.
Commodity Composition of Exports Argentina
(1910–14)
Wheat 19.4%, Maize 17.9%, Linseed 10.2%, Hides 11%, Wool 12.9%, Frozen Beef 7.9%
Brazil
(1908–12)
Coffee 54.2%, Rubber 27.9%
Chile
(1910–13)
Nitrates and Iodine 86%, Copper 8%
Peru
(1910–13)
Sugar 17.5%, Cotton 13.8%, Copper 20.5%, Petroleum 6.3%, Rubber 12.3%
Mexico
(1910–11)
Gold 18%, Silver 27%, Henequen 8.5%, Copper 9%, Rubber 7%
Colombia
(1910–14)
Coffee 46%, Metals 19%, Bananas 9%, Hides 9%
Cuba
(1914)
Sugar 77%, Tobacco 16%
Venezuela
(1908–12)
Coffee 52%, Cocoa 16.6%
- The extent of foreign ownership is very important, as this determines where the profits will go. 'In Chile, Cuba, Mexico and Peru, for example, there was a significant degree of foreign ownership of nitrate workings, sugar estates, mines, petroleum, and so on, much of this intensifying after 1900. In Colombia, Brazil and Argentina, on the other hand, the productive system remained primarily under national control.'
[So this is interesting: foreign control v.s. government control. Where is the private sector?]
- The amount of foreign investment rose to nearly £2000 million by the first world war; this is quite significant, as it is one fifth of the world's total.
- Britain was the single most important source of capital, but France, Germany, and the U.S. were playing increasingly important roles from the turn of the century.
- Railways and public utilities drew increasing share of the capital. [Again, whether such constructions mean development or not will depend on which school one belongs.]
- Many countries in this region had very vulnerable balance-of-payments positions.
Population flowed in parallel to capital, and particularly moved into Brazil and Argentina, where population was sparse.
The First World War and Interwar Years
(1) The most interesting thing about this period is that it serves as a natural experiment; specifically, if Frank's claim has merit, reduced imports during this period would be able to foster development.
(2) One of the most significant changes brought about by the War was the growth of the power of the U.S. over the region.
Albert presents a careful match-up of the diffusionists' and the dependentistas' theories. There is no easy conclusion regarding which one is 'correct'.
JSTOR also has a review on the book:
http://www.jstor.org/view/00130117/di011805/01p0041b/0
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