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Dependency in Nineteenth-Century Latin America: An Historian Objects

Published online by Cambridge University Press:  24 October 2022

D. C. M. Platt
D. C. M. Platt*
Affiliation:
St. Antony's College, Oxford
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The dependency theory, under assault from Right and Left, is scarcely sustainable. Impatience with Prebisch's panacea, import-substitution industrialization, gave birth to dependency. A new bogeyman, the multinational corporation, now preoccupies the scholar and polemicist. Paradigms of Corporatism and Structuration supply the ongoing situation for further refinements in Confusionism. But this is the language of economics and political science. Students of chrono-politics (history) may still wish to inquire whether the historical evidence on which the dependency theory was based is more enduring than its currency in modern social science. The issues are very much alive. It was scarcely reassuring to be told, quite recently, that “radical writers on dependency are engaged in much productive and inventive research.”

Type
Research Article
Information
Latin American Research Review , Volume 15 , Issue 1 , 1980 , pp. 113 - 130
Copyright
Copyright © 1980 by Latin American Research Review

References

Notes

1. My italics: C. Richard Bath and Dilmus D. James, “Dependency Analysis of Latin America,” LARR 11, no. 3 (1976):33.

2. This definition is repeated in several of his works. The version quoted is from his conference paper “The Structure of Dependence,” American Economic Review (Papers and Proceedings) 60:2 (1970):231.

3. Philip O'Brien, “A Critique of Latin American Theories of Dependency,” in Ivar Oxaal, Tony Barnett, and David Booth (eds.), Beyond the Sociology of Development: Economy and Society in Latin America and Africa (London, 1975), p. 13.

4. O'Brien says as much in his conclusion, “A Critique,” p. 25.

5. David Ray, “The Dependency Model of Latin American Underdevelopment: Three Basic Fallacies,” Journal of Inter-American Studies 15:1 (1973):6.

6. James D. Cockcroft, André Gunder Frank, and Dale L. Johnson, Dependence and Underdevelopment: Latin American Political Economy (New York, 1972), p. 7.

7. Osvaldo Sunkel, “National Development Policy and External Dependency in Latin America,” Journal of Development Studies 6:1 (1969):23, 30.

8. Stanley and Barbara Stein, The Colonial Heritage of Latin America: Essays on Economic Dependence in Perspective (New York, 1970), p. 135.

9. Hernan Ramírez Necochea's Historia del imperialismo en Chile (Santiago, 1960), as quoted by André Gunder Frank, Capitalism and Underdevelopment in Latin America (London edn., 1971), p. 97.

10. Fernando H. Cardoso and Enzo Faletto, “Dependencia y desarrollo en América Latina,” in José Matos Mar (comp.), La Dominación de América Latina (Buenos Aires, 1968), p. 163.

11. Dos Santos, “The Structure of Dependence,” p. 232.

12. Charles W. Bergquist, “On Paradigms and the Pursuit of the Practical,” LARR 13, no. 2 (1978):247–48.

13. O'Brien, “A Critique,” p. 16.

14. Cockcroft, Frank, and Johnson, Dependence and Underdevelopment, p. 34.

15. Stein, Colonial Heritage, p. 137.

16. Frank Safford, “On Paradigms and the Pursuit of the Practical: A Response,” LARR 13, no. 2 (1978):255.

17. Stein, Colonial Heritage, p. 147. It may be that Stanley Stein's considerable knowledge of Brazil has tended to color his views for The Colonial Heritage of Latin America as a whole, perhaps to an unwarrantable extent.

18. Porter's Tables and General Statistical Abstract (United Kingdom); at this time the exchange was £1 sterling to $5 U.S.

19. Ibid.

20. Stein, Colonial Heritage, p. 135.

21. Trade and Navigation Accounts (United Kingdom).

22. Safford, “On Paradigms,” p. 256. Safford's material is derived from his recent book The Ideal of the Practical: Colombia's Struggle to Form a Technical Elite (Austin, 1976).

23. I have described this trend in some detail in my book Latin America and British Trade, 1806–1914 (London, 1972), pp. 47–61.

24. Stein, Colonial Heritage, p. 154.

25. Frank, Capitalism and Underdevelopment, p. 309.

26. The development of British commercial banking in Latin America, and its relationship with local business and national economies, is described by Charles Jones, “Commercial Banks and Mortgage Companies” in D. C. M. Platt (ed.), Business Imperialism, 1840–1930: An Inquiry Based on British Experience in Latin America (Oxford, 1977), pp. 17–52.

27. Report dated New Orleans, 26 July 1849, in the Guildhall Library, London (Baring archives, H.C. 4.5.25). Falconnet had just been in Mexico. The exchange stood at just under five silver dollars (Mexican) to £1 sterling.

28. Guildhall Library, London (Baring archives, letter of 24 December 1843. H.C. 4.1.14).

29. The Times, 8 September 1836.

30. This was actually true, but I realize that we are not supposed to mention such things! To cover myself against the charge of Euro-centered jingoism, I should add that there were seventy-four Ministers of Finance in Spain during the minority and reign of Isabel II (1834–68), and fourteen more in the few years before the Restoration. The effect on short-term borrowing was much the same.

31. The rates of issue (and hence interest) were published. Some confusion may have arisen from the practice of issuing loans at nominal rates of interest well below the actual market rate. If a government preferred, for example, to issue 3 percent stock while its credit was no better than 6 percent, the load had to be sold to the public at half its nominal value. The first Mexican loan, the Goldschmidt loan of 1824, was expensive; the new Government sold the loan of £3.2 million nominal in 5 percents at 58. The second was issued by Barclay, Herring, Richardson & Co. in 1825, also for £3.2 million nominal. This time the loan was in 6 percents sold at 85.75; it was relatively cheap. Both were within the market rates current at the time. One of the few historians to make sense of the early borrowing practices of Latin America is Jan Bazant, Historia de la Deuda Exterior de México, 1823–1946 (México, 1968), pp. 32–37.

32. Stein, Colonial Heritage, p. 135.

33. Ibid., p. 154.

34. Ibid., p. 155.

35. Dos Santos, “The Structure of Dependence,” p. 232.

36. H. S. Ferns, Argentina (London, 1967), p. 125.

37. Stein, Colonial Heritage, p. 155. The Steins are drawing, somewhat uncritically, on the classic article by J. Gallagher and R. Robinson, “The Imperialism of Free Trade,” Economic History Review, 2nd ser., 6:1 (1953):1–15. It is not unchallenged. I myself have tried to show some of the difficulties in two articles: “The Imperialism of Free Trade: Some Reservations,” Economic History Review, 2nd ser., 21:2 (1968):296–306, and “Further Objections to an ‘Imperialism of Free Trade,‘ 1830–60,” Economic History Review, 2nd ser., 26:1 (1973): 77–91. W. M. Mathew has reviewed the Peruvian case in his valuable article “The Imperialism of Free Trade: Peru, 1820–70,” Economic History Review, 2nd ser., 21:4 (1968):562–79.

38. The later figures are for the city itself, not for Greater Buenos Aires. They are reproduced by Nathan Lake, “Argentina,” in Richard Morse (ed.), The Urban Development of Latin America, 1750–1920 (Stanford, 1971), p. 23.

39. The variety of motives for the creation of the Central Argentine Railway has recently been described by Paul B. Goodwin, Jr., in his article “The Central Argentine Railway and the Economic Development of Argentina, 1854–1881,” Hispanic American Historical Review 57:4 (Nov. 1977):613–32. The argument is further extended in Sylvester Damus' critique of Goodwin's article in the Hispanic American Historical Review 58:3 (Aug. 1978):468–73, and in Goodwin's reply, ibid., 474–76.

40. Stein, Colonial Heritage, p. 135.

41. The phrase is from Stein, Colonial Heritage, p. 155.

42. Fenn on the Funds (London, 1876 edn.), p. 242.

43. Trade and Navigation Accounts (United Kingdom).

44. George Paish, “Great Britain's Capital Investments in Individual Colonial and Foreign Countries,” Journal of the Royal Statistical Society 74 (1911): 182. Paish's conclusions are supported by the more recent research of J. F. Rippy and Irving Stone. But it should be said that the totals are unreliable not only because they omit investment outside the Stock Exchange (which is understandable, since the figures are inaccessible), but because neither Paish nor his successors take account of the fact that London (at that time) was a truly international market—much of the capital quoted on the London Stock Exchange was actually held abroad. Thomas Skinner, in his preface to the first volume of The Stock Exchange Yearbook (1875), calculated that nearly half of the securities known on the Stock Exchange (foreign and native) were owned by foreigners.

45. Trade and Navigation Accounts (United Kingdom). These are the comparable figures for exports: British exports (declared values) to the whole of Latin America rose from £17.23 million in 1880 to £52.99 million in 1913. British exports to the whole of Latin America less Argentina and Brazil, which were £8.10 million in 1880, were £17.88 million in 1913. British exports to all parts of the world were £223.06 million in 1880; they were £525.25 million in 1913. The export figures for 1880 and 1913 are not strictly comparable since, amongst other changes, the 1913 figures included a relatively small element of “foreign and colonial” re-exports.

46. O'Brien, “A Critique,” p. 13.