In this chapter explain about debating between neo-marxist theories as framework of capitalism and the other expert’s theories which try to explain the causes of underdevelopment and dependency. In this context, Marx arrived at the conclusion that imperialism would probably destroy important elements, including local small-scale manufacturing, and set in motion a significant exploitation of the colonial areas; but, on the other hand, he believed that the European penetration would at the same time remove basic obstacles to the development of capitalism. First, discussing about Neo-Marxist mainstream and second, focus on some of several theorists who have rejected this interpretation and instead asserted that imprealism has actively underdeveloped the peripheral societies or at the very least obstructed their development. These theories as proponents of dependency theory argue that economic domination, as exerted by the highly industrialized countries, is a much more important development-impeding factor than all the internal conditions in the backward countries that feature so prominently in the growth and modernization theories (Bagchi, 1982).
Causes of underdevelopment of Baran
Although Baran belongs to Marxist but he refused the Marx view about development in the Third World. According to Baran that capitalism can make the Third World will remain in underdevelopment. Baran emphasized that the backward countries were characterised by dual economies: on the one hand they comprised large agricultural sectors: on the other, they had small industrial sectors with a high level of productivity. Baran uses economic theories with emphasis on class relation and their impact upon the utilization of the economic surplus to explain why the backward societies remained underdevelopment. Baran emphasizes about extraction of economic surplus on four main classes. Capital does exists on feudal landowners, moneylenders, traders and also capital owners. Baran’s is focused on internal factors of backward societies. It is caused by internal conditions and more in the distribution of power and control over the economic surplus. Therefore countries governed the international economic system, the underdeveloped countries remained trapped in poverty (cf. Palma, 1978, in Meier, 1989).
Metropolles and Satellites: Frank
Frank argued that the crucial mechanism for extraction of the surplus was trade and other kinds of exchange of goods and service not only international trade, but also exchange internally in the peripheral societies. The exchange relations and the network were described by Frank as pyramidal structure with metropoles and satellites. The agricultural labourers and the small farmers in the rural regions of the periphery were satellites at the bottom. They were linked, through trade, to the landowners and local centres of surplus extraction. World centres of capitalism in the USA as metropole gets economic surplus from satellite.
Frank more focused on politic aspects from political economy relations between foreign capital and classes in satellite country. The explanation of underdevelopment lay primarily in the metropole-satellite relations, which not only blocked economic progress, but also often actively underdeveloped the backward areas. Because of that Third World countries would be better off if they disassociated themselves from metropoles and it is de-linking from the world market was the best development strategy.
Centre and Periphery: Amin
Amin, was more concerned with the conditions and relations of production to explain underdevelopment. One model described an autocentric centre economy; the other a dependent peripheral economy. Explanation as following:
a. The autocentric reproduction structure is characterized by the manufacturing of both means of production and goods for mass consumption, it has self reliant but it does not have self sufficiency. Peripheral economy is dominated by an over-developed export sector and a sector that produces goods for luxury consumption.
b. The peripheral economy is not self reliant, but heavily dependent on the world market and the links to production and centres of capital accumulation in the centre countries.
Amin endorsed the thesis that capitalism dominates the periphery within the sphere of circulation, but he asserted at the same time that pre-capitalist modes of production continue to exist and that they exert considerable influence on the total structure of reproduction. The distorted production structure in the peripheral countries and their dependence is a result of the dominance of the centre countries. In these areas the rich countries continue to have a vital interest in selling their goods in the peripheral markets. In its place they must expand regional co-operation and internally pursue a socialist development strategy.
Theories of Unequal Exchange: Emmanuel and Kay
On the other hand, Emmanuel tried to explain the deteriorating terms of trade with reference to Karl Marx’s labour theory of value. Kay’s analyses of the causes of underdevelopment, he argued that unequal exchange was the preferred mechanism for extracting economic surplus of a particular social class.
Dependent Development: Cardoso, Senghass and Menzel
Cardoso refuse the theories that try to explain problem of dependency by quantitative because according to him that we have to know the historical structure and symptoms of more complex about dependency. Cardoso claimed instead that the external factors would have very different impacts, depending on the dissimilar internal conditions. According to Senghass and Menzel extracted a list of conditions could be explained the occurrence of autocentric development by the important socio-economic and political variables.
The Capitalist World System: Wallerstein
Wallerstein is reaction which tries to explain the symptomps of development because dependency theory is assumed that only explain the causes of underdevelopment. He reflects the very complicated and constanly changing structures in the international economy. It is also that he has related the economic analysis to investigation of the international political system and the power relations that permeate it.
Elimination of Dependency: Warren
Also Warren’s main point was certainly imprealism has led to the creation of a system characterised by inequality and exploitation, but at the same time this imprealism has created the conditions for the spreading of capitalism to the Third World. Warren argued that in the long run it would lead to elimination of dependency.
Based on the debating afore mentioned, dependency of peripheral countries toward centre countries is nature that will occur as impact of capitalism spreading and capitalism became world system. In this case, according to the conditions of our country that we have to balance readiness of internal factors with effort to include the world system. We can not ignore about our need to the capital to support our capability to compete in world market and get the better position in world system. Failure some countries to develop their country depend on their internal factors. Paper based on Book “Society, State and Market” by John Martinussen