The restricted sovereignty

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By JOSÉ RAIMUNDO TRINDADE*

Latin American structural dependency, and more specifically Brazil, has deepened in recent decades, imposing a path of industrial regression

The capitalist world economy has the character of uneven and combined development[I], which materializes in an international pattern of division of labor in which the world economy is divided into three large zones of sovereignty and technological, geopolitical and financial control arrangements: the center, the semi-periphery and the periphery, and this division appears functional to guarantee the appropriation of surplus value by the centers and new-centers, allowing the accumulation of economic power in regions of technological, military and financial leadership and underdevelopment ( in conditions of dependence) in regions with less technological progress, geopolitical and financial subordination.

The global expansion of capital and the configuration of capitalism as a world-economy is unevenly processed in territorial terms, with no “convergence” as an economic process, but the establishment of different geoeconomic hierarchies, in accordance with the referred dynamics of uneven and combined development. The world economy is established, therefore, as several overlapping and integrated reproductive circuits of capital, and this relationship is what constitutes the imperialist logic, on the one hand, and dependence on the other. What is called national sovereignty must be understood as the greater or lesser degree of national autonomy in relation to four central axes: technological, financial, geopolitical and social reproduction of populations.

Latin America is in the peripheral spatial region of proximity to the US, and as a result, the sovereignty of Latin American national states is extremely fragile in the four central points that constitute or determine national sovereignty as an order of power in the international division of labor:

i) Regarding the capacity for technological mastery and control over the main segments of the technical reproduction of capital. In this regard, both the dependence on transplanted industrial plants and the fact that technology is non-neutral and its anthropocentric reason, a series of negative consequences for Latin American societies can be observed, including aspects of the formation of a gigantic relative overpopulation and the consequences of pockets of poverty, unemployment and informality[ii].

ii) The greater or lesser influence on the international financial circuit, and how the conditions of national control over its credit system and monetary base are established, a component of financial sovereignty. this factor implies the ability, in terms of national currency, to manage both international commercial exchanges based on its national currency, as well as control over capital flows (Direct Foreign Investment) and the consequent transfers of income (profits and interest) to the central countries, in the case of Latin America centrally to the US[iii].

(iii) The geopolitical control of the territory and the capacity for extraterritorial intervention. Here, three elements are integrated: on the one hand, autonomous military power, which has a greater or lesser capacity to deter offensives by other belligerent states, autonomous and sovereign use of territory in accordance with the interests of a national project and, finally, the capacity to discretion and influence in the international multilateral decision-making order. Latin America shows enormous dependence and subordination in this aspect, either because of the inability to participate in international multilateral agreements, or because of the management of its territories, largely subject to the intervention of the US imperial power[iv].

(iv) Finally, more central and of great consequence, the factors of social order considering the economic, educational and health quality of the population, the exercise of citizenship as a power of organization and collective coexistence, the power to exercise democratic interaction in State decisions .

In this regard, we must emphasize that the different national conditions for the reproduction of capitalism in Latin America are largely based on what Ruy Mauro Marini called the super-exploitation of labor.[v]. One of the direct consequences of this form of exploitation, in which the reproduction of workers takes place at a wage rate lower than the value of the labor force, is that the population's quality of life is very precarious, subjecting workers to enormous precariousness.

Considering, for example, the Brazilian case, we have magnified the sense of maintaining dependence and restricting national sovereignty: in technological terms we have a structural dependence on the US; in the financial case, the Brazilian credit system constitutes a screen of the US system. Visible in the public debt system, which basically functions as a means of transferring national wealth to external or international debt controllers, something around 5% of annual GDP; as for the geopolitical aspects, fully linked to the foreign relations of the North American empire; finally, the aspect of quality of life, where the logic of overexploitation of work imposes precarious living conditions for most of the Brazilian population.

The process of globalization and the passive economic dynamics of Latin America from the 1990s onwards deepened the precarious conditions of autonomous development of their national economies, either through the denationalization of expressive segments of the industry, or through the increase of external vulnerability in the main aspects to be addressed. considered: in productive capacity (greater dependence on foreign direct investment), technological (low capacity to structure a national innovation system and low technological dynamics) and financial capacity (financial investments, loans and financing), factors that relate to the restriction of conditions sovereignty of national states[vi].

The relations between central and peripheral capitalist economies are maintained by the transfer or net flow of value to the central countries, either through the classic mechanisms of remittance of dividends, interest and wages paid to the directors of the great imperialist companies and the growing debts of the underdeveloped countries, but also by the worsening of unequal exchange, especially established since the growing technological gap consolidated from the 2000s.

It should be remembered that dependency from the second half of the twentieth century would be based on a situation of compromise between the interests that move the internal structures of dependent countries and those of big international capital, which implies a profound internalization of the interests of transnational companies and new limitation to the degree of autonomy of peripheral economies and societies with regard to the components of sovereignty already mentioned.

Two major trends are established in the world capitalist system at the beginning of the XNUMXst century:

i) The development of the scientific-technical revolution determines the intensification of the contradiction between the increase in productivity and extraordinary surplus value, this by reducing the mass of value employed in the workforce to an increasingly smaller part of the production process, making the economy of work established by the exiguous technological innovation to value the amount of goods generated by the increase in productivity.

ii) Technology in national economies significantly lowers prices, due to higher levels of productivity, and the growing adoption of automation has drastically reduced industrial employment, further aggravating the conditions for the expansion of the industrial reserve army and the underutilization of the workforce, alongside the intensification of the exploitation of workers.

It will be in this context that the Latin American economies and, especially, the most industrialized countries in the region (Brazil, Mexico and Argentina) will impose an agenda that will consolidate a trajectory of industrial disorganization or reprimarization of their export bases. The core of the policies established, from the Santa Fé group, will be the exchange rate appreciation of the currencies of peripheral economies, privatization of state resources to generate liquidity and raising interest rates, to pass on to international financial capital.

As Theotônio dos Santos[vii] drew attention, few analysts noticed the sensitive alterations that the new US economic policy for Latin American peripheral economies reserved: “it paved the way for a new phase of the region’s economies, based on strong currencies, trade deficits and attraction of financial capital”. This tripod of international trade policy constitutes an important explanatory element for a possible deepening of Brazilian and Latin American external vulnerability in general, mainly considering the exhaustion of the primary-export cycle, either by the decline in international prices, or by the changes that will be triggered in the after the Covid-19 crisis.

Thus, structural dependency in Latin America, and more specifically in Brazil, has deepened in recent decades, imposing a trajectory of industrial regression. The interaction with the two largest growing economies in the last three decades conditioned the subjection to the international market by the export of primary goods (iron and soybeans) and the import of goods of high technological intensity, during the 1990s having the center of foreign trade Brazilian the US and; from the 2000s to China, regressively replicating the export ratio of basic goods vis-à-vis the import of goods with greater technological content.

It should be noted that this process includes mechanisms for appropriating wealth based on imbalances in the trade balance, whether through production that exhausts nature – as is the case with mineral exports – or through the transfer of differential income obtained through the use of planting techniques to new lands. exploited – as is the case with soybeans – or through the mechanism of overexploitation of the workforce, which guarantees the transfer of income from the periphery to the center.

It is worth noting that, as the world economy overcomes the current crisis – albeit gradually –, the trend is for Brazil and Latin America to expand their role as a world supplier of primary products and have their economies increasingly centered on into basic products, re-establishing a historical pattern of dependency and underdevelopment. In short, the question raised here needs to be deepened and serve as a reflection and action, if more industrialized, technologically integrated and sustainably developed societies are wanted, as well as a continent with less social and spatial inequality, we have to establish a Latin American agenda of rupture with an economy dominated by agro-mining businesses focused on the export of primary products.

*Jose Raimundo Trinidad He is a professor at the Graduate Program in Economics at UFPA.

[I] TROTSKY, Leon. The theory of the permanent revolution (compilation). Buenos Aires: CEIP Leon Trotsky, 2000.

[ii] DOS SANTOS, Theotônio. Lessons from Our History. Brazilian Society of Political Economy Magazine, São Paulo, nº 30, p. 19-32, October 2011.

[iii] TRINDADE, José Raimundo Barreto. Criticism of the Political Economy of the Public Debt and the Capitalist Credit System: a Marxist approach. Curitiba: Editora CRV, 2017.

[iv] FIORI, Jose Luiz. American power. Rio de Janeiro: Editora Vozes, 2007.

[v] MARINI, Ruy Mauro. Dialectics of Dependence (A). In: SADER, E. Dialectics of Dependence. 1st edition. Petropolis: Voices, 2000.

[vi] OSÓRIO, J. Latin America: the new export pattern of productive specialization: a study of five economies in the region. In: FERREIRA, C.; OSÓRIO, J.; LUCE, M. (Orgs.). Capital reproduction patterns: contributions from the Marxist dependency theory. São Paulo: Boitempo, 2012.

[vii] DOS SANTOS, Theotônio. World economy, regional integration and sustainable development: new trends in the world economy and Latin American integration. Petrópolis (RJ): Editora Vozes, 1993.

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