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European Studies Essays – Frank Underdevelopment Dependency

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Published: Mon, 5 Dec 2016

Frank Underdevelopment Dependency

1.0 Introduction

This project report looks to the theories, concepts and studies of the well-known German prolific and controversial development Economist and Sociologist of post-war era, ‘Andre Gunder Frank’. Frank was best known as an early exponent and founder of the dependency theory, which maintained that rich, developed countries gained from poor, under-developed countries; so long as they remained in the international capitalist system (Economy Professor, 2006).

This report will concentrate mainly on the understanding and analysis of the most significant concepts and theories of Frank on Underdevelopment; thereafter his concepts will be applied to countries of Latin America and Asia, which were the most affected from the plague of Underdevelopment.

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2.0 Preface of Andre G Frank theories

Frank is considered to be one of the major founders of the world system theory along with Immanuel Wallerstein, Samir Amin and Giovanni Arrighi. He is the author of many works in world system and world accumulation. Andre Gunder Frank was interested in the processes of capital accumulation in Latin America and other regions, such as Asia. These regions were analyzed by Frank within the world context.

The name of Frank is closely connected with the development and dependency theories. He is the author of very interesting publications and books devoted to the connection between economically developed countries and underdeveloped countries. When Andre Gunder Frank wrote his Capitalism and Underdevelopment in Latin America and The Development of Underdevelopment he was influenced by the revolutionary ideas in Latin America and some other countries at that period. Being a social scientist, Andre Gunder Frank was interested in multiple subjects, events, topics, but he is considered to be one of the major contributors to the topic ‘development of underdevelopment’ and world system theory. His analysis of contemporary position of some countries has influenced the sociology science.

He was one of the researchers who furthered the development and dependency theories. In his book Capitalism and Underdevelopment in Latin America Andre Frank has shown his radical position towards development and underdevelopment. He wrote that the world and national capitalism has generated underdevelopment in the past, and still produces underdevelopment at present. (Frank, 1967a) Andre Gunder Frank has expressed an opinion that the economically developed countries were undeveloped but not underdeveloped. He believed that the present underdevelopment of a country is the outcome of its historical development in the past and at present, and the result of its relations with metropolitan countries (Frank 1966, pp. 17-31).

Frank was the first scientist who realized the significance of the world economy. He understood that there is the possibility of autonomous development among the countries in the South:

‘The importance of the central theme of the world economy and of its interdependence … has become ever stronger. What has changed is my belief, which was largely implicit in the idea of dependence, that a state of independence, or at least non-dependence, could be achieved through de-linking from the world economy through concerted political actions in the Third World countries or regions. On this last issue, I suppose I have changed the most, especially since the coup in Chile. Experience has shown it to be extremely difficult, if not impossible, for voluntarist political action to de-link particular countries from world economy’ (Kay 1989, p.1181).

2.1 Development and Dependency theories

The development theory unites several theories, which state that some beneficial changes in a particular society are to be achieved for the common benefit. These theories (Modernization theory, Dependency theory, World Systems theory, and State theory) are based on a variety of social scientific approaches and disciplines.

Frank criticized the modernization theory, which was the key perspective in sociology at that period of time. He called in question the major premises of the modernization thesis elaborated by Talcott Parsons, Bert Hoselitz, Wilbert Moore, Everret Hagen, Daniel Lerner, David McClelland and Walt Whitman Rostow. Moreover, Frank criticized the thesis which stated that ‘the underdeveloped countries with their traditional societies would gradually become developed and modern countries by engaging with the developed capitalist economies and modern societies’ (Frank, 1967b, pp. 20–73). Therefore, he has presented the new analysis of the relationships between economically developed and underdeveloped countries.

Dependency theory is a part of the development theory, which was elaborated after the modernization theory. The dependency theory is based on the idea that the consequences of colonialism on undeveloped countries must be taken into consideration when further development is expected to take place. Dependency theory is tightly connected with Latin America. Scientists have recognized Frank’s contribution to dependency theory. Andre Gunder Frank was a scholar who developed and enriched the research of this theory. He stressed that the modernization theory was a process via which developing countries became more dependent upon economically developed countries. Moreover, the dependency theory divided all countries into several categories according to their level of development. This theory examines countries by dividing them into periphery and centre states: the centre consists of the already developed and colonizing countries, whereas the periphery consists of the developing and colonized countries.

Dependency theory became a tool for political commentary and a framework of explanations. Frank was a scientist who has found the basic concepts for the dependency theory. His innovation to the world system theory and to the development theory was based on the incorporation and the connection between economically developed and underdeveloped countries with the help of the notion of capitalism and all the economic, political, social and cultural changes which became the consequences of the appearance of capitalism relations.

2.2 The Development of Underdevelopment Theory

In his book The Development of Underdevelopment (Development Studies, 1966, p. 27) Frank stated: “Since the historical experience of the colonial and underdeveloped countries has demonstrably been quite different, available theory therefore fails to reflect the past of the underdeveloped part of the world entirely, and reflects the past of the world as a whole only in part. More important, our ignorance of the history of these underdeveloped countries leads us to assume that their past and indeed their present resemble earlier stages of the history of the now economically developed countries. More studies of development and underdevelopment fail to take account of the economic and other relations between the metropolis and its economic colonies throughout the history of the mercantilist and capitalist system.”

Frank gave emphasis to the fact that, in his belief every country passes through all the stages of development, and every stage of this process will vary in time, depending on the position of the country. Besides, he stressed that there is no concept of ‘an underdeveloped country’ if we talk about the economically developed countries – these are countries which were at one point merely undeveloped, but not underdeveloped: “… economic development occurs in a succession of capitalist stages and … today’s underdeveloped countries are still in a stage … of history through which the now developed countries passed long ago. … underdevelopment is not original or traditional and that neither the past nor the present of the underdeveloped countries resembles in any important respect the past of the now developed countries. The now developed countries were never underdeveloped, though they may have been undeveloped” (Development Studies p. 28). The notion of ‘the development of underdevelopment’ which he has elaborated during the research is the main concept in the development theory (Kay, 1989, p. 1180).

Frank pointed out that the contemporary underdevelopment position of a country is the result of its economic, cultural, political and social characteristic features. Moreover, the underdevelopment as the result of past and present relations is an integral part of the world structure: “… present underdevelopment of Latin America is the result of its centuries-long participation in the process of world capitalist development…” (Development Studies, p. 30). He pointed out that the capitalist system has developed rapidly during the last centuries and its effect has reached the most isolated parts of the underdeveloped world. Moreover, the metropolis-satellite relations have been spread in the Latin American colonies and countries, having structured the economic, political, and social life of these countries. Frank has come to a very interesting conclusion that underdevelopment is generated by the historical process which has generated economic development and the development of capitalism. “The other kind of isolation which tends to confirm the second hypothesis is the geographic and economic isolation of regions which at one time were relatively weakly tied to and poorly integrated into the mercantilist and capitalist system” (Development Studies, p. 31-33). Therefore, the two types of countries are connected with each other through exploitation and colonization. Frank has found the connection between the development of the centre and the periphery countries.

Besides this, Andre Gunder Frank explained in his book The Development of Underdevelopment, that Latin America and other similar countries are underdeveloped countries owing to the foreign competition, and the introduction of free trade, which is in the interest of the ruling groups of the economically developed countries: “… in Latin America it was these regions, which initiated and experienced the most promising self-generating economic development of the classical industrial capitalist type. The most important regional cases probably are Tucuman and Asuncion, as well as … Mendoza and Rosario…” (Development Studies, p. 33). The now underdeveloped countries have not had the opportunity to continue developing in the conditions of growing capitalism. Consequently, the development of these countries has had to be sacrificed for that of others. Therefore, the contemporary underdevelopment of certain countries is connected with their close ties with now economically developed countries, which have become economically developed owing to these underdeveloped countries in the past, and which have abandoned them when the wealth of their mines, raw materials and natural resources disappeared.

3.0 Frank’s Underdevelopment Theories with Relation to Latin America and Asia

3.1 Introduction

The concepts of Frank’s studies on Development of Underdevelopment and mainly his Dependency Theory are known for the way Frank applied them to Latin American countries, with relation to Western European Countries and the United States.

3.2 Latin America

Frank (1966) believed Latin America to be a victim of capitalism; having been integrated into the world capitalist system since the beginning of the sixteenth century. Although Sao Paolo has established the largest in Latin America, this has not helped the rest of Brazil to develop, but has deepened their underdevelopment. Furthermore, Frank maintained that although the development and industrialisation of Sao Paolo may have been carried out independently in the beginning, it is increasingly beginning to come in the clasp of the world capitalist system, which is posing a rising number of restrictions for possibilities of further development of the city.

When writing about Latin America, Frank (1969, p. 432) made reference to a “metropolis-satellite” structure. This, he believed, is what the world market for goods, capital, and the international division of labour, have produced. This description portrays Frank’s belief that the developed, metropolitan countries take, or “suck” all of the capital or economic surplus from the other countries, or ‘satellites,’ in order to “feed” and increase their own development, but push the development of these other countries further down, eventually into an underdeveloped state. Although these countries may only have been undeveloped to begin with, the interference of the more developed countries has proved to be further detrimental than had they not interfered, or ‘helped,’ at all.

There are several reasons for which the countries of Latin America are being exploited by developed countries. This exploitation began in the 18th century, and some of the reasons for exploitation included their natural resources; gold and silver, from Mexico, Peru, and Brazil; and the sugar and coffee also produced in Brazil. The sugar production by slaves in Brazil benefited Europe both at home, and when in competition with others abroad, such as Asia. During the 19th century, particularly towards the end of it, Brazil continued to increasingly export sugar and coffee, while Mexico, Peru, and Chile resumed mining, and Argentina exported wheat and meat for Britain and Europe (Frank, 1992). With so many raw materials and produced goods to offer, such an underdeveloped country is susceptible to being taken advantage of by those countries which need them, and have the money and power to exploit whoever or whatever gets in the way of them obtaining what they want or need.

The underdevelopment of Latin America can also be seen to benefit developed countries in the form of labour; this includes labour which has been brought to the developed countries, as well as labour in the underdeveloped country. Specifically Latapi and Martin (no date) mentioned Mexican immigrants attempting to escape their world of underdevelopment by migrating to the United States, but being used by the United States for cheap labour. These high numbers of immigrants lead to an increase in the United States’ productivity, and also the net benefit received due to higher numbers of immigrants lowering the wages of other immigrant workers.

3.3 Asia

As well as Latin America, the underdevelopment of countries in central Asia had also been the subject of much of Frank’s theories on underdevelopment. One such country specifically was China, which was believed to be one of the leading economically developed countries between 1400 and 1800 (Frank, 2005). Since its decolonisation and liberation in 1949, China has been predicted to regain its high position in the world economy, and this is the reason behind Frank’s book ‘ReOrient: Global Economy in the Asian Age.’ In the book, Frank draws upon the words of Smith (1776); “China is a much richer country than any part of Europe” (Frank, 1998, p. 13). As Frank believed that Asia, and in particular China, is beginning to reclaim its place amongst the top players of the economically developed world; he also believed that the history of Asia should also be correctly portrayed, hence the above book was written.

Frank was outspoken in that his thoughts of world history, in particular concerning Asia, were that they have been incorrectly portrayed by Europe. The alleged history of economic development is believed to be a Eurocentric portrayal which Frank claimed denies the real history of the world and neglects most of human reality; as well as altering the perception of Europe’s history. That is to say, history has been portrayed in such a way so as to focus on the people and culture of Europe, making it appear almost superior to others, including that of Asia. China’s drop from its high rates of development, to its current undeveloped situation, is seen to be the result of exploitation on behalf of already developed countries, such as those of Europe (Frank, 2005).

Furthermore, Frank stated that “underdevelopment is not traditional… it is the result of dependent capitalist development of underdevelopment” (Frank, 2005). Frank’s belief again stems from the arguments and evidence which imply that China was no more traditional than Europe between its period of peak economy (from 1400 to 1800), and that it was in fact greater, and more developed than Europe. The above quote could be interpreted to mean that underdevelopment is not the result of a lack of development of certain countries; but the result of the interference of developed countries which are dependent on undeveloped countries. These developed countries can only remain so if the undeveloped countries remain undeveloped; therefore they encourage the development of their undevelopment. This consequently causes the undeveloped countries to become classed as underdeveloped countries, as their efforts to become developed are actually hindered by developed countries, diminishing any hope they may have had of becoming modern.

At the same time, Frank (2005) argued to the effect that capitalism does not in fact have any actual existence in the world, but is just an ideology. Although this contradicts his earlier work, he now states that the ideology of capitalism was simply created in order to make unclear world economical history, and it continues to do so for modern-day world economics. Frank shared in the views of Samir Amin, in that they both believed the way for China, as well as any other country, to be released from all forms of dependence, was to break all links and connections from the external world capitalist economy, and to break free from the internal socialism which were believed to be the root causes of dependence.

This theory however was only possible, so to speak, in theory. Frank continued to reflect on his own beliefs by claiming that to the present day no country has managed to become fully free from dependence, only the South East Asian Tigers had managed to do so partially, and even they were still subject to financial problems. Frank concluded that there has not been a definite and clear answer given as to what to do if and when freedom from dependence would ever occur.

Moreover, Frank highlighted his criticism of the Modernisation Theory, which stated that any country could become modernised with the help of those countries which are already modernised. He quoted; “The Europeans did not do anything – let alone ‘modernize’ – by themselves” (Frank, 2005). Using Europe as an example, he argued that the modernisation theory only applies to certain countries; shown by the fact that although Europe was receiving very cheap money in the form of dollars from America, this type of help was not made available to Asia. He continued to enforce the Dependency Theory which states that developed countries have become so, by depending on underdeveloped countries; as Europe has come to depend on the cheap labour it uses from Asia. Frank’s emphasis was that Europe uses underdeveloped countries like China as a step ladder in order to gain, and maintain, a good foot-hold in the modern world (Frank, 2005).

The exploitation of China by developed countries can also be seen by looking at the United States. An example given by The National Labor Committee (2006) is the findings of an investigation of 16 factories in China, producing a large number of different items, such as car stereos, TVs, bikes, shoes, sneakers, clothing, hats, and bags, for some of the largest companies in the United States, namely Wal-Mart, Nike, Huffy, and others. The findings highlight the appalling conditions under which some people have to work, such as one factory where workers forced to work 12 to 14 hours a day, 7 days a week, with only one day off a month, at an average wage of 3 cents an hour. The low wages did not give workers any benefit, as they still ended up in debt to the company. Workers were fed two meals a day, and 16 workers were housed in one small dorm. Some workers could not even afford the bus fare to leave the factory in order to look for another job, and in the past any protest about the working conditions has led to 800 workers losing their jobs.

This is a prime example of what Frank has referred to as the exploitation of underdeveloped countries by developed countries. Without this type of exploitation, countries like those of the United States would not be able to increase their profit margins and become as rich as they are.

Another example in Asia is Japan, which is believed a rapidly modernising country, particularly towards the end of the 19th century. This was done particularly with the use of “technical and scientific training and research,” and this type of education is what is believed to be an essential factor for developing countries. The effects of this can be seen by the South East Asian Tigers, as mentioned by Frank, who are increasing in levels of modernisation and economic development due to this type of training and education. Australia, as a developed country, has been thought to have benefit by providing some of this training for countries like Japan, as well as others. However, it has been argued that unless Australia improves its infrastructure, countries in Asia will rightly decide that they no longer need the help of developed countries like Australia, and can do a better job themselves. In relation to Frank’s theories, this can be seen support to his views of the Dependency Theory. Blakey (1997) stated that Australia is benefiting from the underdeveloped countries; but as these underdeveloped countries are becoming more and more independent and modernised, they may no longer need the so-called ‘help’ of these countries.

Blakey (1997) also claims that Great Britain’s industrial society is no longer as advanced as it used to be; manufacturing and science are now believed to be in decline. This could be said to be the result of underdeveloping countries becoming more independent; the consequence of which is the economy of the developed countries falling to those levels which the underdeveloped countries have had to deal with for years.

Another social theorist who agrees with Frank is Glyn who, as highlighted in an interview by Hoveman (2006), claims that Japan’s lack of economic improvement in the last 15 years has been welcomed by Europe and the US. In addition, Glyn states that China’s dramatic rise in economic development could prove to be dangerous for already developed countries, such as the United States, due to the fact that the Chinese monetary authorities buy large amounts of dollars. Should they ever stop, the value of the dollar would fall dramatically; this would result in the United States having to increase interest rates to prevent inflation rates from rising dramatically. This could then in turn lead to, at the very least, the danger of rising economic development coming to an abrupt halt for the United States; the threat of ‘stagnation.

4.0 Conclusion / Discussion

On the whole, what is made evident in this report is that in Andre Gunder Frank’s thesis, the development of the centre not only involves, but requires the underdevelopment of the previously undeveloped periphery. This is because development has depended upon resources which are stolen from the periphery, and resources which are exploited; as well as people which are exploited. At the same time the periphery becomes increasingly dependent upon the centre for certain crucial “modern” resources, including technology and knowledge (Bronferbenner, 1972). Frank’s early speculation on The Development of Underdevelopment was brilliant and crucial for the emergence of both the dependency theory and the world-system paradigm. His efforts at systematically linking the external economic behaviour of the socialist alliance to the larger capitalist division of labour, has been instrumental in our understanding of not only the nature and role of existing socialisms, but the overall dynamics of the world economy (Bergesen, 1982). In his view, Asia and Latin America have actually developed underdevelopment; whereas Europe, North America, and Australia have accumulated capital at the expense of the periphery. This accumulation of capital has been made possible through the process of unequal exchange between regions, and the transformation internally of regions at the productive, social, and political levels.

Frank applied his theories of development to various countries affected by underdevelopment; specifically those of Latin America and Asia. These however are just to name a few; his theories could be applied to many other underdeveloped countries. Frank viewed the present world as a manifestation of the dominance the centre metropolis has over the dependent periphery; involving unequal exchange and exploitation.

The exploitation of the people, and of the natural resources and raw materials of these countries, is what Frank believed to be the key behind his Dependency Theory. He asserted that developed countries such as Britain, Australia, have only received the labels of being ‘developed countries’ because of their dependence on these underdeveloped countries. The low wages given to workers of these underdeveloped countries, together with the natural resources and raw material which are either stolen or bought at extortionately low prices, are all a combination of what allow the developed countries to have such large margins of profit. These high amounts of profit can then be reinvested in order to increase the riches of the countries further; all at the expense of underdeveloped countries.

That is to say, if developed countries did not exploit underdeveloped countries, then in Frank’s views they would not be such a thing as an ‘underdeveloped county;’ all countries which have not become economically developed, would simply be undeveloped. The term undeveloped at least allows a country the opportunity to become developed; whereas underdeveloped implies it can never become developed due to the continuing exploitation of these developed countries.

References

Bergesen, A. (1982) Reviewed Work: ‘Crisis: In the World Economy,’ by Andre Gunder Frank. Contemporary Sociology. 11 (1), pp. 55-56.

Blakey, L. (1997) ‘The Death of Australian Science and Technology,’ ABC Radio National [online]. Available at: http://abc.net.au/rn/ockhamsrazor/stories/1997/22.htm (Accessed 27 April 2007).

Bronfenbrenner, M. (1979) World Accumulation, 1492-1789. By Andre Gunder Frank. Journal of Economic Literature. 17 (4), pp. 1460-1461.

Development Studies: Thinking about Development, reprinted in full from Monthly Review September (1966), pp. 27-37.

Economy Professor (2006) Andre Gunder Frank. Available at: http://www.economyprofessor.com/theorists/andregunderfrank.php (Accessed 17 April 2007).

Frank, A. G. (1966) The Development of Underdevelopment. Monthly Review 18(4), pp. 17–37.

Frank, A.G. (1967a) Capitalism and Underdevelopment in Latin America: Historical Studies of Chile and Brazil, New York, Monthly Review Press.

Frank, A.G. (1967b) Sociology of Development and Underdevelopment of Sociology, Catalyst 3: pp. 20–73.

Frank, A. G. (1969) ‘Latin America: Underdevelopment or Revolution,’ The Economic Journal, 81 (322), pp. 432-434.

Frank, A.G. (1992) ‘Latin America at the Margin of World System History,’ The Andre Gunder Frank Official Website. Available at: http://www.rrojasdatabank.org/agfrank/latin_margin.html (Accessed 29 April 2007).

Frank, A. G. (1998) ReOrient: Global Economy in the Asian Age. Berkeley, University of California Press.

Frank, A. G. (2005) ‘Personal Research Interests for Public Policy Practice,’ The Andre Gunder Frank Official Website. Available at: http://www.rrojasdatabank.org/agfrank/research.html (Accessed 26 March 2007).

Hoveman, R. (2006) The Socialist Review. Available at: http://www.socialistreview.org.uk/article.php?articlenumber=9792 (Accessed 27 April 2007).

Kay, C. (1989) ‘Andre Gunder Frank: From the ‘Development of Underdevelopment’ to the ‘World System.’ ’ Development and Change, vol. 36, no. 6, pp. 1177-1183 Blackwell Synergy [Online]. Available at:

http://www.blackwell-synergy.com/doi/pdf/10.1111/j.0012-155X.2005.00455.x (Accessed 14th April 2007).

Latapi, A. E. and Martin, S. (no date) Mexico – U.S. Migration Management A Binational Approach. Available at: http://www.hewlett.org/NR/rdonlyres/E7D5BD75-AB6E-4780-A354-EB4D4BBA9779/0/USMexicoMigration.pdf (Accessed 29 April).

The National Labor Committee (2006) The Role of US Companies in Denying Human and Worker Rights. Available at: http://www.nlcnet.org/campaigns/archive/chinareport/introduction.shtml (Accessed 30 April).


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