Conflicts

Between Development Theories

 Capitalism Socialism
Marxist stages of social development
Stage Characteristics
Ancient/primitive communism, Ancient tribal societies; communal ownership of land, tools
Feudalism or Asiatic and other basic economic resources

Feudalism: found in ‘Western’ societies; based on agricultural

production organized around large estates; land owned by a
few, but tenants able to keep their produce once they had
paid the landlord

Asiatic: found in ‘Eastern’ societies, e.g. India, China, Turkey, Persia;

different classes dominated the economy and the state apparatus;
needed to ensure centralized control of important technologies
such as irrigation systems

Capitalism Society divided into those who own the means of production
and those who do not; those who do not have to earn a
living by selling their labour; key role of the market in allocating
resources

Socialism Communal ownership of means of production by state or the

people; industrialization means that people no longer have
to struggle for a living and individual needs can be met by
the distribution systems of the collective
The Flow of Dev’t… according to Marx

 Follow Linear Stages Models

“The country tha is more developed industrially only shows to the
less developed, the image of its own future”

 Same Urban and Industrial Life BUT different Social and

Political

 Pre Capitalist Capitalism Socialism

( FASIATIC, ANCIENT, FEUDAL) LAISSEZ- FAIRE - WORK ACCORDING TO ABILITY
- PROVIDED ACCORDING TO NEED
MORE…according to Marx

 Pre-Capitalist Capitalist
Peasant work to provide Proletariat work to provide
Basic need of family Basic need of family + Profit to
add to Capital of the Bourgeois

 Capitalism as Necessary stage towards Socialism

 Capitalism inherently Unstable and Vulnerable to crises
 Capitalism to be Overthrown (Usurped) by Socialism
(has better Organization and Production)
 Capitalism expanded to other countries – Colonialism /Imperialism
 Imperialism helped defuse crises of Capitalism in Europe
 Imperialism is the highest stage of Capitalism
 Imperialism is needed to supply Markets, Raw Mats, Labor
 Capitalism needs ever increasing opportunities to make profit to
Survive
 Once Opportunities is exhausted, Capitalism would collapse- Lenin
Neo-Marxism
 Classical Marxist focused only in W. Europe and assumed all
countries would follow same path
 Neo-Marxist questioned (1950-600) Lenin’s theory that
Imperialism was the highest form of Caitalism, next is Collapse
 Carribean, Africa, Asia did not collapse despite de-colonization
 Paul Baran (1960) draw Marxist ideas applied to world conditions
in 20 th century
- Capitalism to Monopoly Capitalism : Big Companies dominated
world economy and exploited poor nations
 Gov’ts of poor countries should intervene and prevent funds
coming out of the country siphoned as profit
-Unfortunately poor countries are corrupt and lacked power to
prevent exploitation
 SOLUTION: Leave the Capitalist System in favor of the Socialist
System
Structuralist
• Capitalism and Socialism are Eurocentric
• Global economic structure was very different from that which existed when
the European began and progressed on their industrialization

 Raul Prebisch “Free Trade” acted as an Obstacle for Latin American dev’t
 ECLA: National Development strategies should involve greater state
intervention to protect national industries
- Allow them to establish without competition from foreign firms
 “Infant Industries” – Friedrich List
 ISI – Import Substitution Industrialization
- Erecting Tarrif Barriers – to protect national manufacturing from
more efficient foreign firms who can sell products more cheaply
Conflict of ISI in Latin America
• Brazil imposed tariffs to limit competition from foreign goods
• Increased subsidies to encourage more production

 Brazil has large population (market) which can absorb domestic production
 But their cost of production is high which cannot be competitive when
exported
 OTHER LATIN AMERICAN COUNTRIES WHICH HAVE SMALLER POPULATION
CANNOT DO THIS!
Conflicting Intentions – Land Reform
• Latifundia – vast landholdings of few owners – Colonial period
• Minifundia- marginal landholdings – majority of peasants
• Political solution – Land Reform
• 1950 -64 51% increased in agricultural land
• BUT yield increase only by 24%
• Government support and Investment were lacking

 Land Reform was not seriously implemented (except in Cuba and

Nicaragua, where there was revolutionary change)
- Farmers were given “new” land in settlement projects, rather than lands
appropriated from large landholders
 Land Reform was an Undecisive program as gov’t was either too weak to
implement substantial agrarian reform OR was eyeing promoting Capitalist
(Large scale) plantation type farming.
ALLIENCE FOR PROGRESS – Help or…
• US program aimed at social and economic development in Latin America
• Individual nation had to present “Development” plans to a panel of US
Economic and Technical Experts
• US $20 B funding for 10 years
Plus commitment of multilateral and private investment
• “Support” Counter Insurgency program for Public Safety
• Counter Insurgency and AFP were coordinated by USAID

 Social and Economic progress following US liberal model failed

 BUT Brazilian gov’t was overthrown by the Military but Brazil continued to
receive US funding.
Weaknesses of Structuralist theories
• Protecting domestic infant industries was able to establish many companies
• BUT continued progress was limited by:
A. Low national demand because of low incomes
B. Need to import machineries and high-tech equipments as production
process became more complex
• The Latin American situation was worsened by the oil crisis in 1970s

 ADJUSTMENTS:
a) Shift to Export oriented industrialization
b) Less state involvement
c) Opening up to foreign investment

 ISI was seen as fostering inefficiencies in the operation of economy and

stifling growth and development
DEPENDENCY THEORIES
 Andre Gunder Frank and other Dependistas saw that Latin America was
underdeveloped because of the Capitalist System

 Core Industrialized countries experienced growth because of the

expoitation of the non-industrialized peripheral countries

- Differed from Classical Marxist and Modernization theorists who saw

non-
industrialized countries as merely lagging in the development ladder
- Latin American development situation is a result of Capitalist dev’t

 Dependency theorists saw exploitation even on individual level:

Peasants land owner pay them less than full value Merchants in
Urban Markets at a Higher Price SURPLUS taken out of country to CORE

 SOLUTIONS DIFFER:
Structuralists = Reform Capitalist system thru State intervention
Neo-Marxist= Overthrow Capitalist System

 G. Frank – Within Capitalist System, Peripheral Regions would always be

DEPENDENCY THEORY APPLIED IN AFRICA
• DEPENDENCY AND MODERNIZATION THEORY FAILED IN AFRICA
• The drastic demand to influence to change culture and values of the Metropolis
states forced Africa to lose its identity and unity
- The linear model of socio-economic development in Modernization theory
prescribe that changes are initiated externally. This premise encourages the
foreign powers to prescribe the route to African development
- The Dependency character served to make the Metropolis states influence
greatly the African governments in the process influencing the seat of
government to exploit rural communities.
Thanks also to corruption

• Poverty reduction policies and strategies have tended to be influenced by the

Theories of development.
- Modernistic policies and strategies tend to be top-down in approach
- They see the development of Africa as the reponsibility of metropolitan states
- The strategies and finances are produced, packaged and sent to Africa by the
economically powerful states
DEPENDENCY THEORY APPLIED IN AFRICA
• SOLUTION BY THE AUTHOR (J. Matunhu-Dept. of Dev’t Studies, Midland
State U, Zimbabwe):

• African Rennaissance Theory of Development:

 The Dependency Theory attributes rural poverty to the unabated pillage of

human and non-human resources

 Because of its strategic and technological advantage over Africa, it was also
able to choke and subdue Africa’s culture and value system.

 In the process Africa lost its right to determine its way to development

 THE WAY TO AFRICA’S TRUE LIBERATION COMES WITH DISENGAGEMENT

WITH THE NORTH IN POLITICAL AND ECONOMIC TERMS