The foreign debt
and dependency
in Latin America
One of the main problems raised by the growth of international debt is that of circulation mechanisms. Until quite recently economists tended to reduce the mode of production to the relationship between productive forces and relations of production. When a writer emphasised the importance of circulation, he/she, without further ado, was practically put on the list of renegades from historical materialism.
Leaving out a proper examination of circulation mechanisms was an interpretation strongly held in the Soviet Union. In fact the mode of production also includes the circulation, distribution, realisation (i.e. the earning of profit) and appropriation of the product. We can only come to grips with the productive forces and the relations of production-which are undoubtedly the base of the process—if we consider the process as a whole. Authors of structuralist textbooks like Marta Harnecker, who separate out the productive forces from the relations of production, in the last analysis deny the theory of alienation of labour since they explain that all the other social factors, including ideology are only produced outside of the production process (according to Althusser "structures, not classes, make history').
The interaction of the different factors working in society-including their relationship to nature-can only be grasped within the framework of the concept of social formation. This concept is not only about a concrete historical society, but also a theoretical category explaining the totality in a more complete way than the concept of the economic and social formation. The concept of social formation helps us analyse the dialectical and
36 International Marxist Review reciprocal relationship between the economic structure and the political superstructure-in other words the intervention of the state and ideology in production, distribution, circulation, realisation, appropriation and their role in the process of foreign debt and financial speculation.
Despite the theoretical progress made in recent decades people still continue to insist on the productive forces/relations of production formula mentioned above. For instance it comes up in the polemic about the nature of Spanish and Portuguese colonisation. Anybody who dared challenge the view that this colonisation was 'feudal' were accused of being 'circulation theorists' by those who reduced everything to the productive forces/relations of production framework.
For our part we have never asserted that the circulation mechanisms were decisive in a given mode of production. But we drew people's attention to the fact that colonial trade in the epoque of mercantile capital played an important role in the primitive accumulation phase. Obviously production relations had a decisive role in the colonial production process even if they were not feudal (not all pre-capitalist production relations are necessarily feudal). The conditions of reproduction of these production relations in Latin America did not depend on each colony but on the international commercial system.
Circulation, commercialisation and distribution form a totality with production and were concretised in the Spanish and Portuguese trade monopolies through the fixing of low prices for colonial products and speculation on manufactured goods. In other words a deficit trade balance was imposed on the colonies which added up to a transfer of value and deteriorating terms of trade. Through its monopoly of commerce and its usury the monarchy appropriated surplus value that essentially was not reinvested in the colonial apparatus of production. The system of circulation was closely linked to the mercantile capitalism of the period, reflecting the external earning of the surplus.
In colonial Latin America there was more than just a commercial capital. There was also capital invested in mining and agricultural companies which gave birth to a ruling class not based solely on commercial capital. This ruling class also intervened in production by establishing fundamentally pre-capitalist relations of production. Not only the circulation of commodities existed but also commodity production. We insisted on the fact that production was orientated to the world market (then being formed), not because we thought this fact in itself defined it as capitalist, but rather because integration in this market involved a dynamic stimulating the establishment of embryonic capitalist relations of production. Colonisation Colonisation did not impose one preponderant mode of production. It is true we were integrated into the world market, but this did not automatically imply the introduction of generalised capitalist production
The foreign debt and dependency in Latin America 37 relations, even if the main mining centres, the basis of colonial surplus value, were exploited within the framework of wage relations and advanced technology. At the same time there was no generalisation of slave or 'servile' production relations throughout the colonies. Consequently we think that from the colonisation period up to the first decades when colonies became politically independent there was a period of transition up to the middle of the last century with two phases: the first colonial, the second republican. Given the specific features of this phenomenon we propose defining it as a transition period towards a primary agro-mining export capitalism. The specificity of this transitional period-compared to the transition from feudalism to capitalism in Europe which was determined by internal factors-resides in the fact that the process was not the result of an internal development from cultures pre-existing Spanish and Portuguese colonisation, but was imposed from the outside.
The importance of monetary and commodity circulation arises again in the second half of the last century during the period of the consolidation of the capitalist mode of production. Elsewhere we have emphasised the role played in these formally independent countries by foreign loans and their relationship with indiscriminate importing of European manufactured goods. In turn the domestic landowners and commercial bourgeoisie operated not only in production, but also in distribution and monetary circulation by speculating on government loans and on bonds financing the domestic budget deficit. The banking system imposed in the majority of Latin American countries in the second half of the 19th century generalised a system of credit that clearly favoured these sectors of the ruling class.
The mechanisms of financial and monetary circulation in a capitalist system like the Latin American one took on new forms in the imperialist epoque. Foreign loans have brought the pillage of our natural resources. Foreign debt, customs seizures, foreign armies, appropriation of raw materials, the sale of manufactured goods-these are the inter-reacting features of the 20th century Latin American social formation.
The new type of dependency resulting from the growing debt of recent decades show without a shadow of a doubt the significance of financial, monetary and commodity circulation. Today with the internationalisation of capital the relation between production, circulation, distribution, realisation and appropriation becomes even clearer. The internationalisation of capital reinforces the unity of the process to the extent that multinational companies are involved in production, currency speculation, the development of import and export trade, the request and allocation of credit, the manipulation of loans, the realisation of their products in all regions of the world and appropriate both their companies' surplus value and the indirect transfers of value.
This "logic' of multinational capital has functioned in Latin America during the last decade through the export/import model we have analysed elsewhere. It favours non-traditional export industries and the import of
38 International Marxist Review manufactured products. This process is very much facilitated by the granting of huge loans which qualitatively change the character of the foreign debt. The internationalisation of banks has speeded all this up while the tendency for the world economy to be based on the 'dollar standard' has accelerated the now well-established practice of the multinationals being involved in speculation.
In the semi-colonial countries commercial and financial circulation have a specific role because of our dependency on the imperialist centres. Apparent monetary autonomy Unlike the highly industrialised countries financial circulation is a decisive area for earning high rates of profit which are not invested in the broad process of production but in the non-productive sector.
The importance of money-capital in the phenomenon of world indebtedness has lead a great many writers to pontificate on the autonomisation of the financial circuits. Undoubtedly the multinational banks have reached a certain level of relative autonomy with a specific dynamic outside the control of the central banks. However it is still the case that they depend on productive monopoly capital. In fact their strength lies in their intimate relationship with the internationalisation of industrial and financial capital.
In any case it is an objective fact that monetary circulation has acquired a relative self-autonomy and thus reinforces the parasitic tendency of monopolies to underuse their financial resources in production. The spiralling foreign debt has therefore taken on a relatively specific dynamic in the underdeveloped countries. Pierre Salama has correctly explained that the shift from an international economy characterised by an excess of liquidity to an economy living on credit with a liquidity deficit has considerably contributed to autonomising the foreign debt from the productive system.
Money in itself is not capital. It becomes capital either when it is invested in the means of production or when it buys labour power with the aim of production, determining in turn the cycle of expanded reproduction. The mass of money circulating in the world debt process has produced a massive flow of money from the semi-colonial countries to the imperialist centres and this money has been invested to aid the recovery of the European and North American economies.
Many economists have provided eloquent figures to prove that through the payment of the debt and the flight of capital 'Third World' countries have exported an amount of money considerably greater than the multinationals have invested in what one has called the periphery. Writers like Michalet have dubbed it 'imperialism without export of capital,' and have even suggested that 'Lenin's formulation could be turned upside down, as a state could be defined as imperialist which is characterised by the import of capital'' Obviously rather an exaggerated conclusion which overlooks
The foreign debt and dependency in Latin America 39 the link between industrial/finance capital and liquid capital in the overall internationalisation of the social relations of production, the productive forces and the banks. But it reflects the importance of the export of liquid capital from the 'periphery to the centre' and its roll in restraining the fall in the rate of profit.
Theorists defending the idea of monetary autonomisation have gone further than Keynes in saying that interest rates are determined by purely monetary factors. True, as Keynes says, money loans have a significant influence over industrial capital. But he still maintained it was a fictitious capital, an expression of the oppressive power of the non-productive rentier capitalist. However by blurring the real origins of wealth and the nature of bank profits he opened the door to the grand designs of the contemporary monetarist school. Theorists of classical political economy and historical materialists have demonstrated that money capital-fictitious and rentier-cannot be created or develop except through being part of the distribution of surplus value generated by productive capital. In fact, despite the apparent autonomisation of the world credit system the accumulated wealth of the multinational banks is a rentier capital.
Money-capital, as Marx explains in the third volume of Capital, becomes stronger in certain periods of capitalism's history by sacrificing millions of commodities. But it can also be rubbed out by the stroke of a pen as happened during the 1929-1932 banking crashes (enormous amounts of paper capital was lost-paper money, stocks and loans). As Chesnais points out this great shake-out was the condition that allowed the reconstruction of the monetary system at the end of the Second World War and especially the recovery of an accumulation process freed from the weight of enormous debts? . North American imperialism has developed a far greater financial parasitism on a world scale than the City of London did. If it started to depreciate and liquidate its credit and other financial assets it would turn all the existing economic relations upside down.
The monetarist school led by the 'Chicago Boys' claims to have turned money-capital into an anti-cyclical instrument. But here we have an unfortunate illusion. As other writers, such as Ernest Mandel, have pointed out, central government banks can indeed encourage an expansion of credit by commercial banks, but we should not for all that exaggerate the influence of interest rates on the economic conjuncture. In the last analysis, entrepreneurs have to exploit the favourable conditions of credit offered to them. If a deep economic crisis exists no business man will take out big loans, even if the interest rates were below zero. Only a reduction in the interest rate combined with an increase in the rate of profit achieved at the expense of wage workers would effectively stimulate capitalist production.
40 International Marxist Review The new 'contribution' to world accumulation As opposed to the thesis defended by writers like Ciro Cardoso, according to which the primitive accumulation of capital at the beginning of the bourgeois regime is supposed to have been generated purely internally, other writers (Wallerstein, Ernest Mandel, Andre Gunder Frank, Perry Anderson and myself) have emphasised the importance of the transfer of value (wealth) from the colonised world to the colonising countries in the process of primitive accumulation of capital. This accumulation was a basic factor in the great industrial take-off in France and Great Britain. Industrialisation was not only the result of the accumulation of usurer and commercial capital, the expropriation of the peasantry, the separation of the producer from their product, the extraction of absolute surplus value by the introduction of wage labour, industrial protectionism, the agricultural revolution and technical progress and inventions. It was also the result of the importing of precious metals and raw materials obtained through the exploitation of slave, indian and 'coloured' labour. To be absolutely precise about it, a substantial part of the industrial revolution in the 18th century was financed by the colonial 'contribution' from Asia, Africa and Latin America-which was not at all voluntary. The process of colonisation in these three continents was at the origin of the international division of labour. In the great age of the merchantile capital unéqual exchange on the basis of unequal value was a key factor in the primitive accumualtion of capital.
The 'contribution' of Latin America to this process has been particularly studied in relation to a developing capitalist Europe but there has not been much analysis with respect to the United States.
However we can demonstrate that this contribution was significant in the phase of the primitive accumulation of capital in the United States too. The process of accumulation did not begin only with the consolidation of the English settlers in Carolina, Massachusetts, Pennsylvania, etc, who were involved in agricultural activity, but also by piracy, pillage, contraband, slave trading and the honey and sugar trade. The transport of commodoties from other countries and colonies also helped stimulate accumulation. In the Caribbean, North American pirate ships attacked Spanish boats laden with precious metals, sugar, coffee and other commodities. This pirate activity was so important that in the 17th century it made up one of the principal flows of revenue into the USA. Andre Gunder Frank has also shown that the development of manufacturing industry in 17th century America was not determined by the expansion of the internal market but was to a great extent linked to the existence of foreign markets. The domestic market was in fact too narrow and insufficient for real industrial take-off. The manufacturing that existed-ropemaking, sailmaking, footwear and especially distilleries-produced more for the export market than for the domestic onet
Another factor favouring accumulation was capital investment in the
The foreign debt and dependency in Latin America 41 Caribbean and particularly in Cuba. According to Moreno Fraginals, already in 1780 significant amounts of North American capital were invested in the sugar refineries. This means capital investment began before the imperialist phase. Indeed England, France and the USA achieved large surpluses from their investment in the West Indies. It was not just a case of commercial companies but also of industrial investment greater than that made in the US market.
One interesting question is to what extent investment of financial capital was a characteristic feature only in the imperialist epoque. Everyone knows that capitalism made a qualitative leap forward at the end of the 19th century. But one of the specific features of this new stage-the export of capital-had already been traced out for at least a century. Considerable investment by England, France, Holland and the United States in the Caribbean plantations during the 17th century and up to the middle of the 18th century had been made in a productive sector and therefore had proto-imperialist characteristics. The Latin American 'contribution' to 19th century European and North American capitalist accumulation was brought about through the uneven exchange of products, financial mechanisms like the loans we mentioned, the control over commerce and sea and land transport. But a substantial part of the surplus value remained in the hands of indigenous capitalists because national resources still belonged to them. The specificity of dependency in the last century is the key for understanding the relatively 'internal' development of Latin American primary product exporting capitalism.
A new type of 'contribution' to the accumulation of the world's industrial centres emerges in the imperialist phase. National resources that were already exploited or potentially exploitable were taken over by monopoly capital which succeeded in extracting an incalculable quantity of surplus-value. At the same time, our countries transferred capital abroad through the bias of uneven exchange and the servicing of the foreign debt.
This Latin American 'contribution' to North American and European capitalist accumulation takes on new features-both quantitative and qualitative-in the 1975-1985 period following the worsening of the foreign debt. Indeed the servicing of the foreign debt, the transfer of the multinationals' profits to their country of origin, historically unprecedented monetary speculation and the indigenous bourgeoisies organisation of an unparallelled flight of capital-have all helped stimulate the North American and West European economies. Without this 'contribution' capitalism in the imperialist centres would not have been able to so rapidly achieve its three industrial revolutions. Neither would it have been able to overcome its crises and recessions without the exploitation of its own proletariat and the Asian, African and Latin American peoples.
42 International Marxist Review The functions of the state today Despite the changes that have taken place over the last fifty years the state is still the decisive institutional instrument guaranteeing the bourgoisie's system of rule. It legitimises oppression by a minority and welds together all the other social layers by trying to neutralise the contradictions between the classes and within classes. The unity of the bourgeoisie inside the state is a contradictory unity. It organises competition between capitalists and at the same time attempts to integrate the exploited classes by the functioning of bourgeois ideology (as Lukacs and Gramsci have correctly pointed out).
The new functions of the state have led certain writers to pontificate on its growing autonomy. It does have a growing semi-autonomy, particularly on the political level and with institutions like parliament. But there is no autonomy from the ruling class. The state in no way plays a role of umpire between the classes. Its relative semi-autonomy exists so that the general tasks of social reproduction can be carried out—-such tasks cannot be carried out by distinct, separate groups of capitalists (management of education, health, transport and major public building, etc.
Before the 1970s the state invested in companies producing infrastructure goods and basic industries like steel. It aimed to provide cheap inputs to both national and foreign private companies. Such investment has continued. But now the state is also involved in the organisation and administration of profitable enterprises like non-traditional export industries (petrochemicals, electronics, mechanical engineering, etc).
Following the expansion of multinational companies links between them and the Latin American states have become increasingly close. The multinationals demand that the Latin American states transform themselves so that electoral promises can be as little binding as possible and that operations of multinational capital associated with domestic private companies and especially with state capital can be facilitated.
With the decisive influence of the multinationals over Latin American industry we can say the phase of substitution of certain imports is over and that industrialisation by internationalisation of the domestic market is underway with an important role played by state capital associated with monopoly capital.
The state has also acquired a decisive role in the financial sector and in the process of building up the foreign debt. Today it does not just busy itself with issuing money and fixing credit levels through the intermediary of the central bank. It also speculates with strong currencies, it devalues and revalues the national currency as it likes, more often than not favouring the interests of the ruling class sector holding power. It controls and occasionally nationalises financial companies or it sets up 'mixed' private/public companies. Money capital manipulated by the state contributes to the process of capitalist accumulation and determines income redistribution.
The foreign debt and dependency in Latin America 43
The state has a determinant influence on developments around the foreign debt. It negotiates loans and in the last decade it has taken over loans granted to domestic private companies. It is therefore the sole guarantor for the multinational banks. As the expression of class domination it obtains and distributes foreign loans, favouring the most important sectors of the bourgeoisie. It therefore has the function of foreign debtor and internal creditor.
This new role for the state has led some writers and politicians to assert that we are seeing the birth of a Latin American state capitalism. In our opinion capitalism does not have a particular first name. It is a unique and indivisible mode of production, independently of the distinction between state capitalism and private capitalism. Indeed, under capitalist rule, state capital is always at the service of private capitalist accumulation. This is also true for Latin American states where there really is a significant state capital. But this capital is associated with multinationals in non-traditional export industries.
Over the last decade some writers have also pontificated about the existence of 'State Monopoly Capitalism'. Such a definition, wrong for the industrialised countries, becomes a complete illusion in the case of the semi-colonial countries. If the state only expresses the interests of monopoly capital it no longer accomplishes its role of representing the different sectors of the ruling class and being the mediator of their conflicts by losing its legitimacy in the eyes of non-monopolistic bourgeois sectors. The fact that a given government favours the interests of monopoly capital and that this sector becomes hegemonic is not sufficient for us to conclude that we have state monopoly capitalism. Such a characterisation would involve the rejection of the theory of the state according to which it represents the ruling class sectors as a whole. So there is no 'state capitalism' distinct from capitalism. What does exist is a difference between the free trade/laissez-faire capitalism of the 19th century and today's capitalism where the state actively intervenes in the economic field. The new character of dependency The quantitative and qualitative increase in the foreign debt, which in fact mortgages the future of our countries, has produced a significant change in the character of dependency. On top of the debt reinforcing our dependency with respect to multinational capital under a new form, a large part of our resources has been appropriated by foreign monopoly capital since the end of the 19th century. Before clarifying the specificity of this new form of dependency, it is useful to outline the concept of dependency. This concept, used by the classics of Marxism and particularly by Lenin to explain the forms of subordination of the colonies and semi-colonies to the industrial centres, became popular in the 1960s. On the one hand there were the desarrollistas like Sunkel, Pinto, Prebisch and more generally
44 International Marxist Review the CEPAL people, who wanted to change the system from the inside by illusory 'nationalist' type plans. On the other side there were those who put forward a revolutionary change by a socialist revolution like Andre Gunder Frank and Anibal Quijano. It would therefore be incorrect to overlook the deep differences which existed and put all those who supported dependency theory into the same bag.
In reality dependency is not a theory, as certain writers have claimed. but an analytical category. It is useful for analysing a part of Latin American history, particularly the period beginning with Spanish and Portuguese colonisation. We have to use it by taking into account the specificities of each region or of each country in a given period. On this condition it can enrich the theory of imperialism.
Much has been written on this theory starting from Hobson and Hilferding, but often the analysis was framed from the point of view of the industrial centres. Even if writers like Sweezy, Mandel, Gunder Frank and others have made new contributions to the study of the economic and political mechanisms which maintain the subordination of the oppressed countries the body of the theory remains insufficient. Lenin himself did not analyse the problem in depth, with the exception of comments and political judgements he made during discussions at the first four congresses of the Communist International.
Undoubtedly Rosa Luxembourg went most deeply into this problematic. Apart from her contested analyses on the realisation of surplus value and capitalist development in the highly industrialised countries, we are especially interested in what she said about the functioning of the Latin American, African and Asian economies. She outlines very clearly the objectives of monopoly capital in the colonial and semi-colonial countries: • control of vital raw materials; • exploitation of cheap labour power by the liquidation of indian/aboriginal communities; • the integration of certain pre-capitalist relations within the world capitalist system in such a way as to be functional in this system; • the indiscriminate sale of manufactured products so as to stifle indigenous artisan businesses; • the extension of capitalism to regions of 'natural economy' with the introduction of railways and other means of modern transport in order to generalise the market economy.
We need to free dependency theory from the ideology of certain writers, dropping the functionalist, structuralist method, the concept of the duality of centre and periphery and above all overcome 'gaps' concerning the class struggle within each region and each country. The centre-periphery concept is less and less valid when we have a capitalist 'rationality' resulting in the transfer of certain types of industry (particularly polluting or electronic industries) from the centre to what is called the periphery.
Certain dependency theorists have developed unilateral analyses, emphasising the exogenous (externally determined) character of our economy
The foreign debt and dependency in Latin America 45 to the detriment of the study of the relations of production and the class struggle. The result is a byzantine polemic on the role of external and internal factors that has prevented an understanding that both are part of the same process which obviously takes place in each region in different forms of the class struggle. Internal phenomena are integrated and adapt to external processes which after all are produced in social formations which are part of the world capitalist system. Dependency is the expression of the subordination to the imperialist centres of the basis of various relations of production. This particular study has been neglected by the majority of the ideologues concerned. Relations of dependency are expressed as much by colonial and ethnic oppression as by class exploitation.
On the other hand we have those who have criticised this 'theory' by focusing their analyses on production in order to dismiss certain writers as circulationists (supporters of a theory centred on circulation). These writers have adopted a new form of 'reductionism' which claims to interpret history on the basis of an overestimation of the relations of production. They have replaced the 'reductionism' of certain dependency theorists with another form of reductionism reducing everything to the mode of production. Their work has not gone beyond methodological recommendations for the definition of a mode of production and so we have not progressed one iota in the concrete analysis of Latin American social formations.
Latin America has undergone dependency since the Portuguese and Spanish colonisation. But it is insufficient to explain that our continent has always been dependent. Such a generalisation only has a concrete content to the extent the specific features and qualitative changes at different stages of Latin American history are precisely analysed. These different stages are characterised by distinct 'situations of dependency'
In any case all analyses must start from the idea that since the 17th century Latin America has been part of a world system and it became clearly capitalist at the end of the 18th century. If this overall process is not grasped then neither the accumulation process nor the specific characteristics of colonial Latin America's dependency can be understood. We have to go beyond the uninteresting polemic of counterposing external factors to domestic factors. We should also reject the criticism of the so-called circulationistas by those who reduce everything to abstract modes of production. The latter attack writers like Andre G Frank, who have tried to emphasise the totality of world history and to overcome narrow regional and local criteria. The Latin American process of production, circulation and realisation has been a specific system, integrated into the developing world market. It is impossible to separate the relations of production from the concrete historic forms of circulation and realisation of capital without falling into an abstract analysis of the forms of servitude, slavery and wage labour-making them into same structures in every period. At the same time it is not enough to stress that Latin America produced for the external market, the relations of production existing at the
46 International Marxist Review time have also to be examined.
Emphasising the fact that everything was reduced to the unfair workings of the world market, as if this was a deus ex machina, has led to an overestimation of the importance of unequal exchange whereas the essential mechanism was the extraction of surplus value by both foreign and national capitalists. Explaining how the value was transferred abroad is insufficient, the process of its realisation in a dependent country is the key thing to analyse.
This analytical negligence has stood in the way of understanding phenomena of accumulation within each country. Blinded by the transfer of the surplus, which has undeniably contributed to primitive capitalist accumulation on a world scale, dependency theorists have made the serious error of underestimating the process of primitive accumulation that has taken place in Latin America during the colonial period and particularly in the 19th and 20th centuries, which paved the way for the formation of a bourgeoisie directly linked to production. This error is the consequence of an incorrect use of the metropolis/satellite opposition which obscures the specific analysis of the classes in each country and the concrete functioning of the relations of production. The processes of class struggle in Latin America are not only a reflection of the metropolis/satellite relationship. They are the result of a social dynamic that pits workers against their bosses whether the latter are national or foreign. Here we are not dealing with a confrontation between 'dominant' and 'dominated' structures but a conflict between classes.
We have to avoid a unilateral approach to dependency, approaching it solely from the point of view of the colonising country. With the exception of the colonial period dependency has been the result of a neo-colonial pact between European (and then North American) capital and the indigenous ruling classes, who were interested in continuing to exploit a primary goods exporting economy. Obviously the capitalists from colonial centres profited most from this arrangement-they fixed the prices of raw materials and manufactured goods at the same time eliminating any possibility of national industry developing (the indigenous bourgeoisie was also not interested in this). The state/nation functioned to reproduce the different forms of dependency. This dialectic of dependency highlights the close relationship between national and foreign exploiters. It also explains class struggles and the interaction between anti-imperialist and anticapitalist tasks.
The concept of structural dependency expresses the deepgoing subordination of our America to the imperialist centres. At the same time it clearly shows how colonialist oppression was and remains necessary for the development of European and North American capitalism. The integration of Latin America, Africa and Asia into the world market has not been an anomaly of the capitalist system but was an intrinsic part of its dynamic of development. A capitalist system uncontaminated by precapitalist forms and colonial economies has never existed. The dialectic
The foreign debt and dependency in Latin America 47 of dependency shows the interpenetration of the dominant imperialist centre and the dominated country. One needs the other even if the oppressor country always predominates. The relation of causality between the centres and the 'satellites' is not an external one. There is an intrinsic interdependence which facilititates the extraction of surplus value in the oppressed countries. Uneven and combined development The theory of uneven development, formulated first by Lenin and then completed by Trotsky who added to it the concept of 'combined' development, has become much more important over recent years. Indeed the most advanced technology of the multinational companies have been introduced into the industry of the semi-colonial countries while certain sectors of the agricultural economy and even the urban economy remain backward. But we think that the theory of uneven and combined development would be enriched by complementing it with the categories of 'articulated', 'specific-differentiated' and 'multilinear' development.
The concept of 'articulated' development means we can better understand the dialectical interaction between uneven and combined development to the extent that it eliminates any idea of coexistence or duality between what is modern and what is backward. At the same time it reinforces Rosa Luxemburg's contribution by emphasising that all relations of production are integrated and subordinated to the preponderant mode of production. By complementing the category of uneven and combined development it also means we can better come to grips with the interpenetration of different forms of integration of relations of production into the world no us understand mechanisms pralist system is universalised. It also beyond appearances, represent active elements in the internal dynamic of societies.
The category of unity of the historical process needs to be methodologically combined with the concepts of diversity and of uneven, articulated, combined and specific-differentiated development. This is particularly necessary since those who are the apologists for the idea of progress and the epigones of Marxism have represented any phenomenon that does not correspond to a narrow conception of historical unity as something exceptional and abnormal, normality being represented by the evolution of Western Europe. There is never unity without diversity nor general tendencies without specificities. These specificities are not a simple complement to the global development of the world capitalist social formation but are the result of this development at the local level. They are the concrete expression of various national social formations.
The specific differentiated character of peoples allows us to understand more precisely the multilinear development of history, which up to recent-
48 International Marxist Revien ly has been studied on the basis of a unilinear schema developed by positivists and dogmatists. Those writers have tried to impose on all societies the primitive communism-slavery-feudalism-capitalism sequence. Conversely a rigid application of the concept of multilinear development would lead one to deny the general tendencies of the contemporary epoque and to adopt a sort of 'cultural relativism' '. Furthermore these considerations are also valid for the process of transition to socialism, which is also characterised by an uneven, combined and specific-differentiated development as we can see in the experiences of the USSR, China, Indochina, North Korea, Eastern Europe, Cuba and more recently, Nicaragua.
To summarise: Latin America is a semi-colonial continent (in terms of its degree of dependency on imperialism) characterised by a backward, uneven, articulated and specific-differentiated development. Despite their backwardness the majority of our countries are not agricultural but urban, in some cases they are industrial urban and in others industrial-urbanmining. Certain Central American countries where plantation-type economies predominate are exceptions to the rule.
The four phases of dependency we have outlined have been followed by a new phase following the exponential growth of the foreign debt. The multinational banks and the imperialist states controlling the international institutions responsible for allocating loans have succeeded, thanks to the complicity of the indigenous ruling classes in subordinating us to the system of world credit which imposes its own law of the capitalist jungle.
It is an objective fact that Latin America's present dependency is no longer attributable to unequal exchange or the control of our raw materials and industries, but is also expressed by the alienation of our national currencies-pawns in a 'dollarised' world economy-and by a gigantic debt that indefinitely mortgages away the exports and resources of the debtor countries. At the present time multinational capitalism reaps in more dollars from the servicing of the foreign debt than through the transfer of profits derived from the productive sector.
This new form of dependency has several political consequences. It increases the United States government's blackmail and pressure. On the pretext that the debt is not being repaid it demands a greater slice of our resources and unconditional support for its foreign policies. The most pro-imperialist currents are in favour of an agreement with the multinationals. Other currents, reflecting a rebirth of nationalist tendendencies think it is necessary to negotiate but from a position of strength and even propose a moratorium or a suspension of repayments. They criticise in various ways US imperialism but consciously or unconsciously cover up the responsibilities of the national ruling class in the process of getting into such debt.
Dependency theory, which had partially fallen into disuse is now back in favour. The aim of much of this new dependency theory is to emphasise the centre/periphery opposition and the criticism of foreign monopoly capital thereby blurring over class contradictions within the country. The
The foreign debt and dependency in Latin America 49 anti-imperialist struggle has to be combined with the anti-capitalist struggle. Any stagist and gradualist strategy which tries to impose mediations on the specific and immediate demands of the workers, peasants and masses of the shanty towns, indian communities, women etc. not only falls short of what is needed but is also at the end of the day pro-capitalist. This is because it does not incorporate the understanding that national liberation and social-revolutionary change is a single, uninterrupted and permanent process.
Finally, the build of the debt gives us a new dimension to the national question and sets the workers movement and revolutionaries new tasks. Traditional demands have been nationalisation of foreign companies and the ending of all economic and military pacts infringing national sovereignty. Today we need to add a new anti-imperialist demand-the non-payment of the foreign debt or any other demand concretising the breaking of the age-old semi-colonial chains that bind our countries.
The enormous problem of the foreign debt in the last decade has stimulated important theoretical discussion. However there is still not yet a theory of the Latin American political economy which explains the specificities of our sub-continent. We do not have a theory of the history of our societies, their phases of transition, the particularity of the relations between ethnic group and class in Indo/Afro/Latin societies, particular modes of production and particular social formations, the origin and development of classes, class consciousness, the specificity of our class struggle and the formation and development of the national state. Neither do we have a political economic analysis of the overall development of Latin America and notably the importance of foreign debt as a factor expropriating our national sovereignty.
How do we account for the fact that the importance of the debt as one of the factors in the process of primitive and permanent accumulation of capital and as one of the main obstles to the development of Latin America has been ignored for more than a century? Particularly since we think we have demonstrated in other works that the payment of loans and interest amounted in the last century to between 20 and 30% of exports and this percentage reached 40% in the 20th century and more than 60% in the 1975-85 period. In other words throughout nearly all our republican history Latin American peoples have had to support a debt of which the interest corresponded to nearly half their exports.
Fundamentally it is the constant reference to the European model of development which has blocked the majority of our researchers who transferred their unilinear historical schema to the 'New World'. Unfortunately the Europeans did not have a theory of political economy of universal value either-their framework remains euro-centric. This gap can only be overcome by the contribution of researchers from Asia, Africa and Latin America and by a theoretical exchange between the former and their colleagues in the United States, West and East Europe.
50 International Marxist Review
Notes 1. See Ch. A. Michalet, le Capitalisme mondial, PUF, Paris, p. 199. 2. See F. Chesnais, Algunas observaciones sobre el contexto mundial de la deuda. 3. See José Benitez, Las Antillas: colonización, azúcar e imperialismo, Casa de las Americas, Havana 1977, p.111. 4. Andre G. Frank, Accumulación dependiente y subdesarrollo, Era, Mexico, p.77. 5. Comisión economica para America Latina (Economic commission for Latin
America).
SERGIO RODRIGUEZ LASCANO