This book consists of a series of essays designed to show the various ways in which Latin America’s economic relations with the rest of the world, especially with the industrial countries, have either hampered its economic development or distorted it, and how various countries have tried to counteract negative foreign influence.
The first two chapters examine economic dependency in historical perspective, i.e. the emergence of the Latin American economies from colonial status to their integration into the nineteenth-century world trading community as suppliers of primary products, and the various ways in which the major countries of the region attempted to achieve greater economic independence through industrialization in the twentieth century. This is followed by chapters dealing with special contemporary topics—the attempts at regional integration, changes in the structure of trade since World War II, the nature of international lending to Latin America, changes in foreign investment patterns since the nineteenth century, control of natural resources and attempts at commodity agreements in products exported by Latin America.
While the book touches on many important topics related to the region’s international economic relations and its economic development, the treatment they receive often lacks in descriptive and analytical depth. For example, Tancer observes that multinational enterprises “. . . quickly realized that one way to increase profits would be to take equipment, capital goods, and technology which had become obsolete in the most advanced societies because of refinements or improvements, and use them in the less developed countries, where they would still be useful. By so doing, the manufacturer was charged with selling second-class goods . . .” (p. 29). Yet, given the large amount of open unemployment and underemployment in Latin American cities, it could be argued that the use of older technologies makes more sense than the importation of the latest labor-saving techniques. Further on, we learn that multinationals “. . . have traditionally issued licenses to, or created, manufacturing subsidiaries . . . on the condition that the products are intended for local use only” (p. 34). In the sixties and seventies, however, most of Latin America’s industrializing countries have made great strides in export diversification and multinationals have actually been accused of benefitting too much from export incentives.
Analytical confusion abounds. For instance, Tancer states that “. . . the size of the existing market is a fraction of the size of total population, for the average populations are composed of approximately forty-five percent who are fifteen years or under” (p. 43). I always thought that younger people are also consumers. Or, when speaking of international lending, we learn that “. . . the World Bank was viewed as little more than another commercial bank . . .” (p. 100). No one ever thought of that bank as anything but a development bank.
Although Tancer raises some interesting issues in the area of economic dependency, a more carefully researched and analyzed approach would have substantially enhanced the value of this book.
