Latin America: Underdevelopment or Revolution is a collection of essays by political economist Andre Gunder Frank, written primarily for the Monthly Review and other (although not exclusively) left-wing journals. While it is a dreary and exceedingly repetitive hook, it does make a point. North American writers (and some Latin Americans as well) are so anxious to emphasize political and economic development, democratic reform, and the growth of the middle sectors that they minimize the impediments to both development and reform which are implicit in the structure of the international system.
Much of the overall thesis of the book is summed up in Chapter 23, “Destroy Capitalism, Not Feudalism.” In it the author argues that Latin America’s socio-economic structure, rather than being feudal, is more accurately understood as constituting the underdeveloped sector of the exploitative capitalist world system, in which physical force, capital, and commerce are monopolized by the developed countries. “Power, like everything else in the ‘provincial’ rural sectors,” he states, “is intimately related to urban and international capitalist society through the economic (above all commercial), political (above all parliamentary hacked by force), and social relations that link them to each other. Surpluses, agricultural and otherwise, are the result not of efficiency in production but . . . along with the exploitation and the profits associated with them, are the product of the monopolization of the foregoing relations” (p. 355). This “imperialist” system is seen further in the fact that although postwar governments found their balance of payments problems intensified, they continued to make “concessions to imperialism, not only in mining and utilities, but also in the consumer goods and service industries catering mainly to the higher income recipients” (p. 356). The worsening underdevelopment of Latin America and its dependence upon the United States were hidden, Frank contends, by the increased production of consumer goods for the middle classes.
One of the more interesting sections of the book is the author’s treatment of North American economic policy in Latin America. With thin documentation he declares that the outflow of capital from Latin America is substantially greater than the combined amount of private investment and foreign aid. Then he shows how the very process of investment tends to retard a country’s development. It seems that in Brazil, for example, North American businesses often obtain a good deal of their capital from Latin American banks or from U.S. banks with Brazilian deposits, invest these funds in export, processing, and service industries (“Coca-colonization, in a word”), and either remit the profits to the United States or use the proceeds to buy into existing Brazilian businesses. Furthermore, Brazilian “expropriation” proposals offer American investors government aid in transferring their capital from less profitable enterprises into much more remunerative industries. Thus, Frank states, “American capital, with financial and technical advantages due to its inter-national connections and with additional special privileges granted by the Brazilian government ‘to attract foreign capital,’ progressively denationalizes Brazilian industry, misdirects Brazilian investment, integrates the weaker Brazilian economy increasingly with the stronger American one, . . . and thereby adds further to Brazil’s balance-of-payments difficulties” (p. 152).
Latin America: Underdevelopment or Revolution is not recommended for those who wish a well-researched book on the political economy of Latin America or who tire quickly of Marxist rhetoric. However, it does contain ideas—in particular an alternative framework within which to view contemporary reality. For those of us who have become habituated to looking at the region in essentially liberal democratic terms, it is a useful corrective.
