The development of underdevelopment

Clara Figueiredo, body research, digital photomontage, 2020


Most theoretical categories and guidelines for development policy come from historical experiences that do not fit underdeveloped countries


We cannot hope to formulate adequate theories and programs on development for the majority of the world's population that suffer from underdevelopment without first knowing how their past economic and social history gave rise to their current underdevelopment. However, most historians are dedicated only to developed metropolitan countries and pay little attention to colonial and underdeveloped regions. For this reason, most of our theoretical categories and guidelines for development policy come exclusively from the historical experience of the advanced capitalist nations of Europe and North America.

And since the historical experience of colonial and underdeveloped countries proved to be very different, the available theories completely fail to reflect the past of the underdeveloped part of the world. More importantly, our ignorance of the history of underdeveloped countries leads us to assume that their past, and even their present, resemble the early stages of the history of today's developed countries. This ignorance and acceptance led us to serious misconceptions about contemporary underdevelopment and development. Furthermore, most studies on development and underdevelopment fail to consider the economic and other relationships between the metropolis and its economic colonies throughout the history of world expansion and the development of the mercantilist and capitalist system. Consequently, most of our theories fail to explain the structure and development of the capitalist system as a whole and to account for its simultaneous generation of underdevelopment in some places and economic development in others.

It is generally considered that economic development occurs in a succession of capitalist stages and that the current underdeveloped countries are still in a stage, sometimes described as an original stage of history, through which the developed countries passed a long time ago. However, even the most modest knowledge of history shows that underdevelopment is neither original nor traditional, and that neither the past nor the present of underdeveloped countries resembles, in any important respect, the past of today's developed countries. The developed countries today were never underdeveloped, although they may have been not developed. It is also widely considered that the contemporary underdevelopment of a country can be understood as the exclusive product or reflection of its own characteristics or economic, political, social and cultural structure. But historical investigation shows that contemporary underdevelopment is, to a great extent, the historical product of the past and continuing economy and other relationships between the underdeveloped satellite and the metropolitan countries that are now developed. Furthermore, these relationships are an essential part of the structure and development of the capitalist system on a global scale as a whole. A related point of view, and also a widely erroneous one, is that the development of these underdeveloped countries and, within them, of their most underdeveloped domestic areas, must be and will be generated or stimulated by the diffusion of capital, institutions, values, etc. themselves from national and international capitalist metropolises. The historical perspective based on the past experience of underdeveloped countries suggests that, on the contrary, economic development in underdeveloped countries can now only occur independently of most of these diffusion relationships.

Evident income inequalities and cultural differences have led many observers to see “dual” societies and economies in underdeveloped countries. It is assumed that each of the two parts has its own history, structure and contemporary dynamics largely independent of the other. Supposedly, only a part of the economy and society has been significantly affected by close economic relations with the “outside” capitalist world, and this part has become modern, capitalist and relatively developed precisely because of this contact. The other part is considered variably isolated, subsistence-based, feudal or pre-capitalist and therefore more underdeveloped.

On the contrary, I believe that the whole “dual society” thesis is false and that the policy recommendations it leads to, if followed, only serve to intensify and perpetuate the very conditions of underdevelopment that they are supposed to remedy.

A growing body of evidence suggests, and I am confident will be confirmed by future historical investigation, that the expansion of the capitalist system over the past centuries has effectively and fully penetrated even the apparently most isolated sectors of the underdeveloped world. Consequently, the economic, political, social and cultural institutions and relations that we currently observe there are products of the historical development of the capitalist system as much as are the supposedly more modern, or capitalist, characteristics of the national metropolises of these underdeveloped countries. Analogously to the relations between development and underdevelopment at the international level, the contemporary underdeveloped institutions of the so-called backward or feudal domestic areas of an underdeveloped country are no less a product of the singular historical process of capitalist development than the so-called capitalist institutions of the allegedly more progressive areas. In this paper, I would like to outline the types of evidence that support this thesis and, at the same time, indicate some general lines that further study and research may fruitfully follow.


The secretary general of the Latin American Center for Research in Social Sciences writes in the Centre's magazine: “The privileged position of the city has its origins in the colonial period. It was founded by the Conquistador to serve the same purposes it still serves today: to incorporate the indigenous population into the economy produced and developed by the Conquistador and his descendants. The regional city was an instrument of conquest and is still an instrument of domination today”[I]. The National Indigenist Institute of Mexico confirms this observation when it points out that “the mestizo population, in fact, always lives in the city, the center of an intercultural region, which acts as a metropolis for an area of ​​indigenous population and which maintains a close relationship with the indigenous communities. underdeveloped areas that unite the center with the satellite communities”[ii]. The Institute goes so far as to point out that “between the mestizos who live in the core city of the region and the Indians who live in the rural areas of the interior there is, in fact, a closer economic and social interdependence than can be appreciated at first sight” and that provincial metropolises “because they are centers of exchange, they are also centers of exploration”[iii].

Thus, these metropolis-satellite relationships are not limited by the imperial or international level, but penetrate and structure the very economic, political and social life of Latin American colonies and countries. Just as the national and colonial capital and its export sector became a satellite of the Iberian (and later other) metropolises of the world economic system, this satellite immediately became a colonial metropolis, and then a national one, in relation to the sectors of production and the population of the interior. Furthermore, the provincial capitals, which, in turn, are themselves satellites of the national metropolis – and, through it, of the foreign metropolis – are, at the same time, provincial centers around which their own local satellites orbit. In this way, a whole chain of constellations of metropolises and satellites links all parts of the entire system from its metropolitan center in Europe or the United States to the most distant points in Latin American countries.

When we examine the metropolis-satellite structure, we find that each of the satellites, including the now underdeveloped Spain and Portugal, serves as an instrument to extract capital or economic surpluses from its own satellites and transmit part of these surpluses to the foreign metropolis of which they are all satellites. In addition, each national or local metropolis serves to impose and maintain the monopolistic structure and exploitative relations of this system (as the Instituto Nacional Indigenista de Mexico calls it), while serving the interests of the metropolises that take advantage of this global, national and local structure. to promote its own development and the enrichment of its ruling class.

These are the main structural features that still endure and that were implanted in Latin America by the Conquest. In addition to examining the establishment of this colonial structure in its historical context, the proposed approach requires the study of the development – ​​and underdevelopment – ​​of these metropolises and satellites of Latin America through the subsequent historical process and still in force. In this way, we can understand why there were and still are trends in Latin American and world capitalist structures that seem to lead to the development of the metropolis and the underdevelopment of the satellites, and why, in particular, the national, regional and local satellite metropolises of Latin America find that its economic development is, at best, an underdeveloped development.


I believe I have demonstrated in my case studies on the economic and social history of Chile and Brazil[iv] that the current underdevelopment of Latin America is the result of its secular participation in the process of world capitalist development. My study of Chilean history suggests that the Conquest not only fully incorporated that country into the expansion and development of the mercantile world and later the industrial capitalist system, but also introduced the metropolis-satellite monopoly structure and the development of capitalism into the domestic and international economy. in Chilean society itself. This structure quickly penetrated and permeated all of Chile. Since then, and throughout Chilean and world history, during the periods of colonialism, free trade and imperialism, as well as today, Chile has been gradually marked by the social and political structure of satellite underdevelopment. This development of underdevelopment continues today both in the growing satelliteization of Chile by the foreign metropolis and through the increasingly sharp polarization of its domestic economy.

The history of Brazil is perhaps the clearest case of the development of national and regional underdevelopment. The expansion of the world economy since the beginning of the XNUMXth century has successively converted the Northeast, the interior of Minas Gerais, the North and the Center-South (Rio de Janeiro, São Paulo and Paraná) into export economies and incorporated them into the structure and development of the world capitalist system. Each of these regions experienced, in the period of their respective golden age, what might appear to be economic development. But it was a satellite development that was neither self-generated nor self-perpetuating. As the market or the productivity of the first three regions declined, the interest of the domestic and foreign economy in them diminished, being abandoned to develop the underdevelopment in which they currently live. In the fourth region, the coffee economy has experienced a similar albeit not as serious fate (but the development of a synthetic coffee substitute promises to deal a deathblow in the not-too-distant future). All this historical evidence contradicts the generally accepted thesis that Latin Americans experience a “dual society” or a survival of feudal institutions and that these are important obstacles to their economic development.


However, during World War I and even more during the Great Depression and World War II, São Paulo began to build an industrial apparatus that is currently the largest in Latin America. The question that emerges is whether industrial development removed or could remove Brazil from the satellite development and underdevelopment cycle that until now characterized its other regions and its national history within the capitalist system. I believe the answer is negative. Domestically, the evidence is pretty clear so far. Industrial development in São Paulo did not produce great wealth for other regions of Brazil. Instead, it turned them into internal colonial satellites, further decapitalized them, and consolidated and even deepened their underdevelopment. There is little evidence to suggest that this process is likely to be reversed in the foreseeable future, except that the provincial poor migrate and become the metropolitan city poor. Externally, the evidence is that, although the initial development of São Paulo's industry was relatively autonomous, it is being little by little satelliteied by the foreign capitalist metropolis and its possibilities for future development are being progressively reduced.[v]. This development, my studies lead me to believe, also seems destined to be a limited or underdeveloped development given that it takes place in the current economic, political and social framework.

In summary, we must conclude that underdevelopment is not due to the survival of archaic institutions or the existence of a shortage of capital in regions that have remained isolated from the stream of world history. On the contrary, underdevelopment was and still is generated by the same historical process that also generates economic development: the development of capitalism itself. This vision, I am pleased to say, is gaining adherents among students in Latin America, and is proving its worth in shedding new light on the region's problems and offering a better perspective for the formulation of theories and programs.[vi]


The same historical and structural approach can also lead to better theories and programs of development, generating a series of hypotheses about development and underdevelopment, like the ones I am verifying in my current research. The hypotheses derive from empirical observations and theoretical assumptions that within this metropolis-satellite structure, which encompasses the whole world, metropolises tend to develop and satellites to underdevelop. The first hypothesis has already been mentioned above: that, in contrast to the development of the foreign metropolis which is nobody's satellite, the development of the national and other subordinate metropolises is limited by their satellite status. Perhaps it is more difficult to verify this hypothesis than the subsequent ones, since part of its confirmation depends on the verification of the others. However, this hypothesis seems to be generally confirmed by the non-autonomous and unsatisfactory economic and especially industrial development of the national metropolises of Latin America, as documented in the aforementioned studies. The most important and at the same time most confirming examples are the metropolitan regions of Buenos Aires and São Paulo, whose growth only started in the XNUMXth century, and was not hampered by any colonial heritage, but was and remains a satellite development largely dependent on the metropolis. abroad, first from Great Britain and then from the United States.

A second hypothesis is that the satellites experience their greatest economic development, and especially their classic industrial capitalist development, when and where their ties with the mother country are weakest. This hypothesis is almost diametrically opposed to the generally accepted thesis that the development of underdeveloped countries is a consequence of a greater degree of contact with and greater diffusion from metropolitan developed countries. This hypothesis seems to be confirmed by two types of relative isolation that Latin America has experienced in the course of its history. One is the temporary isolation caused by war crises or depressions in foreign metropolises. With the exception of some of lesser importance, five periods of major crises stand out that seem to confirm the hypothesis. They are: the European depression (especially the Spanish one) of the 1930th century, the Napoleonic wars, the First World War, the depression of the XNUMXs and the Second World War. It is clearly established and generally recognized that the most important recent industrial development – ​​especially in Argentina, Brazil and Mexico, but also in other countries such as Chile – took place precisely during the periods of the two great world wars and the intermediate depression. Thanks to the consequent weakening of commercial ties and investment during these periods, the satellites initiated a sharp growth of autonomous industrialization. Historical research shows that the same thing happened in Latin America during the European depression of the XNUMXth century. Manufacturing grew in Latin American countries and many of them, like Chile, became exporters of manufactured goods. The Napoleonic wars gave rise to independence movements in Latin America, and this should perhaps be interpreted as confirming, in part, the development hypothesis.

The other type of isolation that tends to confirm the second hypothesis is the geographic and economic isolation of regions that once had a relatively weak connection and were little integrated into the mercantilist and capitalist system. My preliminary research suggests that in Latin America it was these regions that initiated and experienced the most promising self-generated economic development of the classic industrial capitalist type. The most important regional cases are probably Tucumã and Asunción, as well as other cities such as Mendoza and Rosario, in the interior of Argentina and Paraguay, during the late XNUMXth and early XNUMXth centuries. The XNUMXth and XNUMXth centuries in São Paulo, well before the beginning of coffee cultivation, is another example. Perhaps Antioquia in Colombia and Puebla and Querétaro in Mexico are other examples. In its own way, Chile was also an example, since, before the opening of the sea route around Hornos, this country was relatively isolated, at the end of a long journey from Europe via Panama. All these regions became manufacturing centers and even exporters, generally of textiles, during the period that preceded their effective incorporation as satellites of the world, colonial and national capitalist system.

It is clear that, internationally, the classic case of industrialization through non-participation as a satellite of the world capitalist system is obviously that of Japan after the Meiji Restoration. Why, we may ask, was resource-poor, non-satellite Japan able to industrialize rapidly at the end of the century, while resource-rich Latin American countries and Russia were unable to do so, and this was easily defeated by Japan in the War of 1904, after the same 40 years of development efforts? The second hypothesis suggests that the fundamental reason is that Japan was not satelliteized in the Tokugawa period nor in the Meiji period and, therefore, did not have its development structurally limited like the countries that were satelliteized.


A corollary of the second hypothesis is that, when the metropolis recovered from its crises and reestablished the commercial and investment ties that fully reincorporated the satellites into the system, or when it expanded to incorporate previously isolated regions into the world system, development and previous industrializations of these regions were strangled or channeled in directions that are neither self-perpetuating nor promising. This happened after each of the five crises mentioned above. The renewed expansion of trade and the spread of economic liberalism in the XNUMXth and XNUMXth centuries strangled and reversed the manufacturing development that Latin America had experienced during the XNUMXth and, in some places, early XNUMXth centuries. After the First World War, Brazil's new national industry suffered serious consequences from the North American economic invasion. The rising rate of growth of the Gross National Product, and particularly of industrialization across Latin America, was again reversed, and industry became increasingly satelliteized after World War II, and especially after the recovery and expansion of the metropolis. with the end of the Korean War. Far from having become much more developed since then, industrial sectors in Brazil, and more conspicuously in Argentina, have become structurally increasingly underdeveloped and less and less capable of generating continued industrialization and/or sustained development of the economy. This process, which India is also suffering from, is reflected in a wide range of difficulties with the balance of payments, inflation and other economic and political issues, and promises not to give in to any solution that does not result in far-reaching structural changes.

Our hypotheses suggest that fundamentally the same process occurred, even more dramatically, with the incorporation of previously non-satellite regions into the system. The expansion of Buenos Aires as a satellite of Great Britain and the introduction of free trade in the interests of ruling groups in both metropolises almost entirely destroyed manufacturing and much of what remained of the formerly prosperous economic base of the interior. Manufacturing was destroyed by foreign competition, land was usurped and converted into latifundia by the voracious growth of the export economy, intraregional income distribution became much more unequal, and previously developing regions became mere satellites of Buenos Aires, and , through this one, from London. The provincial centers did not succumb to satelliteization without a fight. This metropolis-satellite conflict was an important cause of the long armed and political struggle between the Unitarians of Buenos Aires and the Federalists of the provinces, and it can be said that it was the only determining cause of the War of the Triple Alliance, in which Buenos Aires, Montevideo and Rio de Janeiro, encouraged and helped by London, not only destroyed the autonomous development of Paraguay's economy, but killed almost the entirety of its population that did not accept surrender. While this is arguably the most spectacular example that tends to confirm the hypothesis, I believe that historical research on the satelliteization of previous, relatively independent agricultural activities and incipient manufacturing regions, such as the Caribbean islands, will further confirm it in the future.[vii]. These regions did not stand a chance against the developing and expanding forces of capitalism, and their own development had to be sacrificed to that of others. The economy and industry of Argentina, Brazil and other countries that experienced the effects of the recovery of the metropolises since the Second World War are today following the same fate, albeit, fortunately, to a lesser extent.


A third main hypothesis, derived from the metropolis-satellite structure, is that the regions that are most underdeveloped today and with the greatest feudal appearance are those that had the closest ties with the metropolis in the past. They are the regions which were the greatest exporters of primary products, and the main sources of capital for the foreign metropolis, and which were abandoned by it when, for one reason or another, business declined. This hypothesis also contradicts the widely held thesis that the source of regional underdevelopment is its isolation and its pre-capitalist institutions.

This hypothesis seems to be amply confirmed by the preceding supersatellite development and current ultra-underdevelopment of the former sugar exporters – Antilles, northeastern Brazil, former mining districts of Minas Gerais in Brazil, the highlands of Peru and Bolivia, and the central Mexican states of Guanajuato. , Zacatecas and others, whose names became famous worldwide centuries ago for their silver. There are certainly no important regions in Latin America that are more cursed by underdevelopment and poverty today; although, all these regions, like Bengal in India, provided in the past the vital blood flow of mercantile and industrial capitalist development – ​​in the metropolis. The participation of these regions in the development of the world capitalist system provided them, already in its golden age, with the typical structures of underdevelopment of a capitalist export economy. When the market for their sugar or for the wealth of their mines disappeared and the metropolis abandoned them to their own devices, their already existing economic, political and social structure prevented the autonomous generation of economic development and left them no alternative but to turn to for themselves and degenerate into the ultra-underdevelopment that we currently find in them.


These considerations suggest two other related hypotheses. One is that the latifundio, regardless of the fact that today it presents itself to us as a planting or a farm, was born typically as a commercial enterprise that created its own institutions, which allowed it to respond to increased demand in the national and world market, by expanding its land, capital and labor, and increasing the supply of its products. . The fifth hypothesis is that the apparently isolated, subsistence-based and semi-feudal latifundia have now seen the demand for their products, or for their productive capacity, decrease, and can be found mainly in the former exporting regions of ores and agricultural products above mentioned, whose economic activities have generally declined. These two hypotheses run counter to the notions of many people, and even the opinions of some historians and other scholars on the subject, according to which the historical roots and socioeconomic causes of latifundia and agrarian institutions in Latin America can be found in the transfer of feudal institutions of Europe and/or economic depressions.

Evidence to verify these hypotheses does not easily open to general inspection and requires a detailed analysis of many cases. However, it is possible to obtain some important confirmatory evidence. The growth of large estates in Argentina and Cuba in the nineteenth century is a clear case in support of the fourth hypothesis, and in no way can be attributed to the transfer of feudal institutions during colonial times. It is evidently the same case with the post-revolutionary and contemporary resurgence of large estates, particularly in northern Mexico, which produce for the North American market, and similar ones on the coast of Peru and in the new coffee regions of Brazil. The conversion of former small farms on Caribbean islands such as Barbados into sugar-exporting economies at different times between the XNUMXth and XNUMXth centuries, and the consequent increase in large estates on these islands, also seems to confirm the fourth hypothesis. In Chile, the growth of latifundia and the creation of institutions of serfdom, which were later called feudal, took place in the eighteenth century, and it has been definitively demonstrated that they were the result of and the response to the opening of a market for Chilean wheat in Lima.[viii]. Even the growth and consolidation of latifundio in seventeenth-century Mexico – which most scholars have attributed to a depression of the economy caused by the decline of mining and the shortage of indigenous labor and the consequent introversion and ruralization of the economy – took place at a time when As urban population and demand grew, shortages of food products became acute, food prices soared, and the profitability of other economic activities such as mining and foreign trade declined.[ix]. These and other factors have made farming on farms more profitable. Thus, even this case seems to confirm the hypothesis that the growth of large landholdings and their apparently feudal servitude conditions has always been and still is, in Latin America, the commercial response to increased demand, and that this does not represent the transfer or survival of exotic institutions that remained beyond the reach of capitalist development. The appearance of the latifundia, which today are really more or less (though not quite) isolated, can be attributed to the causes advanced in the fifth hypothesis - namely, the decline of previously established profitable agricultural enterprises, whose capital was, and whose economic surplus currently produced is still, transferred elsewhere by owners and traders who are often the same people or families. Verification of this hypothesis requires an even more detailed analysis, part of which I began to develop in a study of Brazilian agriculture.[X].


All these hypotheses and studies suggest that the global extent and unity of the capitalist system, its monopoly structure and uneven development throughout its history, and the consequent persistence of commercial rather than industrial capitalism in the underdeveloped world (including its most industrially advanced countries ) deserve far more attention in the study of economic development and cultural change than they have received to date. Although science and truth do not recognize national borders, it is probably the new generations of scientists from underdeveloped countries themselves who most need, and are best able to, dedicate the necessary attention to these problems and clarify the process of underdevelopment and development. It is up to them, ultimately, to change this no longer acceptable process and eliminate this miserable reality.

They will not be able to achieve these goals by importing sterile stereotypes of the metropolis, which do not correspond to the economic reality of their satellite and do not respond to their needs for political liberation. To change your reality, you must first understand it. Therefore, I hope that a better confirmation of these hypotheses and a greater commitment to the proposed historical, holistic and structural approach can help the people of underdeveloped countries to understand the causes and eliminate the reality of their development of underdevelopment and their underdevelopment of development.

*Andre Gunder Frank (1929-2005) was a professor from the National School of Economics at the National Autonomous University of Mexico (UNAM). Author, among other books, of World Accumulation 1492-1789 (Zahar).

Translation: Fernando Lima das Neves.

Originally published on Monthly Review, v. 18, no.o. 04, September 1966.


[I] Latin America, year 6, no. 4 (October-December 1963), p. 8.

[ii] National Indigenous Institute, The indigenist coordinating centers (Mexico, 1962), p. 34.

[iii] Ibid., p. 33-34, 88.

[iv] “Capitalist development of underdevelopment in Chile” and “Capitalist development of underdevelopment in Brazil”, in Capitalism and underdevelopment in Latin America (New York, London: Monthly Review Press, 1967 and 1969).

[v] See also “The growth and decline of import substitution”, Economic bulletin for Latin America, v. 9, no. 1 (March, 1964); and Celso Furtado, development dialectic (Rio de Janeiro: Fundo de Cultura, 1964).

[vi] Others who use a similar approach, although their ideologies do not allow them to draw the logical conclusions involved, are Anibal Pinto, Chile: a case of frustrated development (Santiago: Editorial Universitaria, 1957); Celso Furtado, The economic formation of Brazil (Rio de Janeiro: Fundo de Cultura, 1959), which was recently translated into English and published as The economic growth of Brazil by the University of California Press; and Caio Prado Junior, Economic history of Brazil, 7 ed. (São Paulo: Editora Brasiliense, 1962).

[vii] See, for example, Ramiro Guerra y Sanchez, Sugar and population in the Antilles, 2 ed. (Havana, 1942), also published as Sugar and society in the Caribbean (New Haven: Yale University, 1964).

[viii] Mario Gongora, Origin of the “tenants” of central Chile (Santiago: Editorial Universitaria, 1960); Jean Borde and Mario Góngora, Evolution of rural property in the Puango Valley (Santiago: Instituto de Sociología de la Universidad de Chile); Sergio Sepúlveda, Chilean wheat on the world market (Santiago: Editorial Universitaria, 1959).

[ix] Woodrow Borah makes depression the main theme of his explanation in “New Spain's century of depression”, Ibero-American (Berkeley), n. 35, 1951. François Chevalier speaks of introversion in the most authoritative study on the subject, “La formación de los grande latifundios en México”, Agricultural and Industrial Problems in Mexico, v. 8, no. 1, 1956 (translated from the original French and recently published by the University of California Press). The data that support my contrary interpretation are provided by these same authors. This issue is discussed in my “¿Con qué modo de producción convert la gallina maíz en huevos de oro?”, which originally appeared in Latin America: underdevelopment or revolution (New York and Londo: Monthly Review Press, 1969); and its deeper analysis in a study of Mexican agriculture still in preparation.

[X] “Capitalism and the myth of feudalism in Brazilian agriculture”, in Capitalism and underdevelopment in Latin America.

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