Dossier no. 67: Dependency and Super-exploitation: The Relationship between Foreign Capital and Social Struggles in Latin America

In the different countries of the world, capitalism is shaped and consolidated not only by the general logic of this mode of production, but also by the social, historical, and cultural conditions of each country. The way each country and region understand the forms of accumulation and expansion of capitalism is fundamental to the class struggle.

The dispute between capitalist and socialist projects in the twentieth century generated a rich environment for theoretical and political development in the context of the challenges that social inequality posed in countries on the periphery of capitalism. An important initiative in this regard was the creation of the Economic Commission for Latin America and the Caribbean (ECLAC) by the United Nations. Some sectors that found a way out of these challenges and devised a strategy based on social transformation, such as the communist parties, aligned with the orientation of the Third International or groups of leftist militants who sought to understand the dynamics of Latin American capitalism based on Karl Marx’s theory of value in order to build a socialist alternative. These orientations gave rise to what is known as Marxist dependency theory.

In the last two decades of the twentieth century, the world saw the development and expansion of commercial, productive, and financial globalisation. This new phase in the world economy was marked by increased trade in goods and services, greater international participation in the productive operations of transnational companies, and the intense circulation of capital at the international level in a new dynamic of world capitalism. Faced with the demands of financial capital—the dynamic centre of this new stage of capitalism—countries have increased the extent to which they have opened their economies externally and deregulated their markets, reducing state participation in the economy in pursuit of the ideal of a ‘minimal state’—despite the unsatisfied basic needs of a huge portion of the population. Neoliberal policies have been implemented in many countries. These policies seek to dismantle both the welfare state in Europe and the few advances that have been made in Latin America towards enshrining democracy and the rule of law in the constitution and are presented as necessary conditions for economic development and overcoming ‘underdevelopment’.

Faced with this new dynamic of contemporary capitalism, the Brazil office of Tricontinental: Institute for Social Research, in collaboration with Professor Renata Couto Moreira and the Research Group on Marxist Studies of Dependency Theory in Latin America—Anatália de Melo Collective of the Federal University of Espírito Santo (UFES), seeks to deepen the role of Marxist dependency theory today as an important scientific tool to understand the essence of the processes and current anti-democratic and fascist trends, as well as to identify emancipation processes throughout the twenty-first century.

We therefore seek to present a brief history of the debate on dependency in its various currents and perspectives. We will also reflect on the importance of understanding the super-exploitation of the workforce as a current reality in dependent countries. This is fundamental for understanding the form that the process of accumulation and appropriation of wealth takes in the Global South, and it makes no sense to separate the possibilities of overcoming the condition of super-exploitation of the working class from the structural elements that determine it.

Marxist Dependency Theory and Class Struggle in Latin America

The debate on underdevelopment and dependency arose in the 1960s, guided mainly by attempts to understand the reasons for the backwardness of Latin American countries in relation to the core countries. The international debate revolved around very different, and even contradicting, points of view. This was a period of intense dialogue that sought to develop Latin American thinking through institutions including the Economic Commission for Latin America and the Caribbean (ECLAC), the Latin American Institute for Economic and Social Planning (ILPES), the Latin American Faculty of Social Sciences (FLACSO), and university centres such as the University of Chile’s Centre of Socioeconomic Studies (CESO).

ECLAC economists such as Celso Furtado, Raúl Prebish, Fernando Henrique Cardoso, and Enzo Faletto viewed underdevelopment as a ‘delay’ in the development of markets and related institutions, a point supported by the World Bank at that time. This analysis maintained that it was necessary to overcome a series of structural conditions in these countries, especially through industrialisation, in a way that would favour the development of internal markets and improve the terms of trade in international relations, which would be possible through active state intervention. Though the unequal relationship between countries at the centre and on the periphery of capitalism in terms of development and underdevelopment was questioned, no consideration was given to the contradictions between the different social classes in peripheral countries.

At the same time, a group of economists—professors Ruy Mauro Marini, Theotônio dos Santos, Vânia Bambirra, Luiz Fernando Victor, Teodoro Lamounier, Albertino Rodriguez, and Perseu Abramo—held their first studies on dependency theory in Brasília in an ongoing course based on reading Marx’s Capital. These studies sought to understand the essence of the phenomenon of the underdevelopment of the countries in the region by analysing the historical development and transformations of the Latin American reality using Marxist methodology. This effort also sought to formulate a strategy that would, on the one hand, address the political challenges that Brazil faced at the time—a time of effervescence for popular movements that existed alongside a government striving to carry out agrarian, urban, and educational reforms ¬— and, on the other hand, combat the offensive of the local ruling classes supported by the bourgeoisies of the core capitalist countries, especially the United States.

These were the first studies of what became known as Marxist dependency theory. Based on the Marxian categories of the general law of capitalist accumulation as well as absolute and relative surplus value, this group of economists stated that the root of underdevelopment was not to be found in the industrial backwardness of each economy, but rather in the historical process and in the way that the countries of Latin America had been incorporated into the world market through colonisation by Europe, and then by the international relations to which those countries were subjected, which were perpetuated after their political independence by means of economic dependence on the dictates of the division of labour in global capitalism.

From this perspective of the combined and unequal development of capitalist accumulation in its globalised totality, one begins to understand that the phenomenon of underdevelopment grips the dependent economy. Thus, a relationship of dependence is created and fed by the development of capitalist industry, which transforms some countries supplying raw materials into receptacles of wealth that drain into the industrialised core. The super-exploitation of the workforce is necessary for this drainage to be sustained, which exposes the real process of the production and reproduction of capital in Latin American countries.

The super-exploitation of labour refers to the intensified exploitation of the workforce, resulting in an extraction of surplus value that exceeds the limits historically established in core countries. This becomes a fundamental feature of the capitalist system in underdeveloped economies, since foreign capital and local ruling classes benefit from workers’ low wages and precarious working conditions as well as the absence of labour rights, thus maximising their profits and capital accumulation. This contributes to the reproduction of these countries’ dependence and subordination as part of the international order.

The super-exploitation and the dispossession of workers in Latin America, the Caribbean, Africa, and Asia have helped sustain welfare states in developed countries through the international division of labour. In the Global North, there is a sort of understanding between the state, capitalists, and workers. This understanding is focused on the expansion of productive methods, achieved by increasing profits and productivity, which is shared through real wage increases and the extension of social protection. Therefore, as the economist and popular activist Juliane Furno explains, Marxist dependency theory demonstrates that the capitalist mode of production on a global scale gives rise to two types of economies that develop at different paces, in which development and underdevelopment are not antagonistic but complementary, a dialectical unit, because they lead to the same logic of accumulation ¹. Thus, dependent capitalism is defined, first, by the transfer of value from the periphery to the core as a structural dynamic; second, by the super-exploitation of labour as compensatory for the local bourgeoisie; and, third, by a particular type of reproduction of capital in which production and consumption are separated.

From Latin America to the World

The advance of dictatorships in Latin America caused many intellectuals across the region to go into exile in Chile, facilitating the exchange of ideas during the Popular Unity government of Salvador Allende (1970—1973). The new political and social experiences that took place as structural changes developed—such as agrarian reform and new relations with foreign capital in terms of copper extraction—led to studies and analyses based on the concrete needs presented by the complex dynamics of a peaceful transition to socialism.

However, the 1973 military coup against the Popular Unity government promoted by the ruling classes and the United States government caused the Marxist dependency theory group to disperse. Nonetheless, only a few years later, many of them found themselves in Mexico, where they further developed their theoretical formulations (which was especially the case among exiled professors based at the National Autonomous University of Mexico). It was from not only a theoretical perspective, but also one rooted in transformative praxis, that Marxist dependency theory developed, produced by truly organic intellectuals linked to socialist organisations and the problems of their time.

The work of Ruy Mauro Marini, to name but one example, would become well-known among the fundamental readings for the political education of militants from many socialist organisations and social movements, such as Chile’s Movement of the Revolutionary Left (MIR) and Nicaragua’s Sandinista National Liberation Front (FSLN). Furthermore, Marxist dependency theory influenced the programmes of the Popular Unity government in Chile and the revolutionary military government in Peru, as well as the liberation theology of Christian militants across the continent. In her autobiography The Country Under My Skin: A Memoir of Love and War, the poet Gioconda Belli recalls that in 1973:

Reading and studying were duties of every Sandinista rank and file, and I took them to heart. I devoured all the Latin American revolutionary literature that was coming out then: books on Che, the Uruguayan Tupamaros, Ruy Mauro Marini’s theory of dependence, Lukács’s thesis on ethics, debates about art and political commitment, and Freire’s education for liberation.²

Although conceived in Latin America in a specific context of revolution and counter-revolution in the 1960s and 70s, Marxist dependency theory was not restricted to its Latin American version. On the contrary, it has become a necessary tool for understanding the manifestations of imperialism across the Global South.

One of the main developers of Marxist dependency theory, Theotônio dos Santos, recalls how Norman Girvan applied the concept of dependency to the reality of the Caribbean and had some degree of influence on the Manley government in Jamaica, initiating what dos Santos called a ‘Caribbean, English-speaking school of dependency’.³ In Africa, Marxist dependency theory underwent ‘a very fruitful fusion’, dos Santos wrote, thanks to Samir Amin’s efforts to bring together Latin American and African social thought in Dakar in 1970.⁴ The Third World Economists’ Congress in Algiers in 1974 was also part of this process, as were the publications of Kwame Nkrumah (Neo-colonialism: The Last Stage of Imperialism, 1965), Walter Rodney (How Europe Underdeveloped Africa, 1972), and Issa Shivji (Class Struggles in Tanzania, 1976).

Dos Santos also wrote of the long tradition of anti-imperialist criticism and the formulation of unique paths of development in India, where Marxist dependency theory had become part of the analytical repertoire (as seen in the work Unreal Growth, edited by Ngo Manh-Lan).⁵ Marxist dependency theory would also influence international fora such as the Third United Nations Conference on Trade and Development (UNCTAD) in Santiago de Chile in 1972 and the formulation of the New International Economic Order.

Super-exploitation as the Essence of Dependency

The category of the super-exploitation of the workforce was developed by Ruy Mauro Marini in the 1970s. Despite the transformations in the logic and dynamics of capital accumulation over the last fifty years, this formulation is still useful for understanding the class struggle in the countries of the Global South. It is important, however, to reinterpret it and to take into consideration how the dependent development model has unfolded historically and in the current reality of these economies. Thinking about super-exploitation only makes sense if it is understood as being inextricably tied to the processes of the production, accumulation, and appropriation of wealth on the continent, both historically and in the present.

Marini understands super-exploitation as a qualitative change in the specific social relations of production in Latin America, combining in a dynamic way three mechanisms that amplify the expropriation of the surplus value produced in the working day: the prolongation of the working day; the intensification of the working day by accelerating the production process and the work itself; and the possibility of expropriating part of the socially necessary work for the reproduction of the working class.⁶ In other words, the average salary remains below the value that is socially necessary for working families to reproduce their living conditions and ability to work.

This becomes possible due to the submission of dependent economies to the configuration of the international division of labour, which satisfies imperialist economies’ demands for raw materials and food at low costs. Marini thus characterises the evolution of capitalism in Latin American countries based on the disruption of the cycle of capital realisation in domestic markets.⁷ In the framework of relations of dependency, the economy remains subordinated to the specialisation of the economy toward production of commodities for the export market. This productive specialisation in the export of primary and low-technology-incorporated products represents the other side of the relations of dependency and creates the conditions for internal wage inequalities and the intensified super-exploitation of workers.

Within dependent countries, super-exploitation also serves as a form of compensation to the local bourgeoisie for sending part of its surplus value to the centres of capital, on which it depends financially and technologically. Another decisive factor is the existence and maintenance of an enormous industrial reserve army of labour, which constrains salary demands. Therefore, super-exploitation should not be understood merely as an increase in the degree of exploitation, which could be resolved by increases in wages achieved through union struggles, but rather as a dynamic for the extraction of value in dependent countries.

Dependence must be understood in the context of the roles and limits established by the development of the productive forces and the social relations of production with the aim of ensuring both the expanded reproduction of global capital overall, and of dependence in particular. The accumulation in imperialist centres of the wealth produced in the global economy sustains and is sustained by relations of dependency. Thus, super-exploitation and dependency are two sides of the same coin that limit and maintain dependent countries within the dynamics of accumulation of capitalism overall. In this way, they can only be overcome together: overcoming the super-exploitation of the workforce will only be possible by overcoming dependence in international relations in the world market and, therefore, in the capitalist system of accumulation itself.

Indian economists Utsa Patnaik and Prabhat Patnaik point out that the ‘old’ imperialism used the colonial state to impose income deflation on workers in the periphery through the colonial taxation system and the generation of unemployment.⁸ In its contemporary phase, the adoption of global value chains enabled the creation of a global reserve army of labour, which acts alongside the dispossession of the peasantry from their land and the imposition of income deflation to play a global role in keeping the wage vector low in all countries, including in the imperial core. In addition to the dispossession of peasants from their land and the rural exodus, policies favouring outsourcing and the precarisation of work contribute to the formation of this global army.

Such contributions reaffirm the relevance of Marxist dependency theory today while demanding the revitalisation of some of its categories of analysis in order to understand the mechanisms that shape the pattern of accumulation and dependence that are now under the yoke of fictitious capital, the financial system, and neoliberal policies. In this arena, it is also worth mentioning the theoretical efforts of Jaime Osorio, Claudio Katz, John Smith, and Intan Suwandi, among others.

Super-exploitation, the Agrarian Question, and Class Struggle in Latin America Today

Understanding the paths that Marxist dependency theory has taken up to the present brings us to the specific changes in political processes and the class struggle in Latin America. We can understand the relevance of the category ‘super-exploitation’ in the analysis of the dependence of Latin American economies by understanding the system as a whole.

In response to the 2008 global financial crisis, capitalist economies have acted along two axes to compensate for losses and keep the dynamics of the financial system unchanged: first, expanding the exploitation of labour by reducing labour rights and, second, destroying natural public goods in an accelerated manner. One of the immediate consequences has been the deepening of capitalist relations in agriculture and the inequalities between large transnational agricultural capitalist companies and peasant family production units.

The polarisation of this class contradiction in the countryside has led to a drop in how much family farmers are paid for agricultural products, in stark contrast to the upward trend in commodity prices. This drop is also seen in the price of their land, giving rise to a process of constant indebtedness and the expulsion of peasant families from their territories. At the same time, there has been widespread destruction of the material base used to produce wealth and develop productive forces under a model that relies on the predatory extraction of natural resources and requires the employment of ever fewer workers. This furthers the super-exploitation of the workforce and the depletion of natural resources, which are the bases for the production of social wealth.

The limitations imposed by the logic of the valorisation of profit and speculative income on the development of the capitalist system as a whole have ceased to exist. Examples of this logic appear in the investment portfolios of large transnational companies operating in agricultural and mineral commodity markets, in the acquisitions and mergers of companies in the agrifood complex, and in large agricultural land investment funds in dependent countries. In their incessant search for profits, big international investors seek to realise ever-increasing returns. In some instances, this manifests in the purchase of physical assets, from land to refineries, which are abundant in countries on the periphery of the system. In others, it manifests in speculation in financial markets through such instruments as derivatives, which are derived—for example—from calculations about the current and future prices of agricultural commodities, allowing financial speculation to shape the agricultural market’s influence on commodity prices.

Neoliberal agricultural policy for Latin American countries continues to prioritise the primary export sector, whose ownership is extremely concentrated and under the control of large corporations and international investment funds. Eighty-three percent of Brazilian agribusiness exports are concentrated in just five agro-industrial complexes: 46% in soybean production, 14.3% in the meat sector, 12.7% in forestry products (such as monocultures for pulp mills), 4.5% in the sugar and alcohol sector, and 5.4% in coffee production.⁹

The influx of foreign direct investment in the dependent countries of Latin America, especially Brazil, thereby establishes an efficient compensation mechanism for the growing declines in profit rates in the crisis of global capitalism. The ruling classes have found a way out of economic crisis that entails the deepening of their own existential crisis. This perspective enables us to understand the movement in Brazil’s National Congress aimed at regulating foreigners’ acquisition of land in Brazil.

With priority being given to agribusiness as the flagship of the Brazilian agro-export economy, public policies and resources are increasingly being appropriated by the large international oligopolies of agrifood chains. This enables both the increasing appropriation of the wealth produced and the deepening of the economic dependence and super-exploitation of the working class in Latin America. This logic guides the decisions of the global players of the capitalist system through investments and can push the crisis to an extreme, where food and natural resources are even more scarce, and it could even lead to the very destruction of the conditions necessary for human existence on the planet.

Data collated and published by GRAIN in 2012 provides evidence of the expansion of foreigners’ acquisition of land in Latin American countries. In Brazil, for example, 2.9 million hectares of land have been acquired by foreign legal entities. Of these, 30.9% (907,000 hectares) are in the hands of companies in the financial sector. Another 65.4% are controlled by agribusiness and agro-industrial companies, demonstrating the relationship between financial and agrarian capital in the financialisation process of contemporary capitalism. Most of this capital comes from transnational companies headquartered in the United States, which control 35.4% of agricultural land acquisitions in Brazil.¹⁰

According to the Land Struggle Database, the number of properties owned by international capital in the agribusiness sector is concentrated in pulp mills, totalling 1,402 properties acquired between 2013 and 2018.¹¹
The permanent remittance of profits and dividends to these investments’ countries of origin expands the process of valorisation and the growing appropriation of the wealth produced in Latin America and from its natural resources. This places the large transnational pulp and paper oligopolies at the centre of the class struggle and the agrarian question in Latin America.

The ruling classes of countries with dependent economies are thus subordinated to the interests of imperialist countries and their large transnational corporations, which are increasingly orienting their investments towards land and natural resources in Latin America. Nowadays this reorientation of the ruling classes, even more dependent and subordinated to U.S. imperialism, is reflected in their withdrawal of funds and weakening of public policies for agrarian reform and family farming. One such example is the Bolsonaro government’s 2020 Annual Budget Law, which instituted significant cuts for land reform. These cuts added up to a 94% reduction in land acquisition for land reform, 99.9% for technical assistance, 99.8% for promoting rural education, and 82% for monitoring agrarian conflicts and ‘pacifying’ the countryside.¹²

Final Considerations

The struggle for agrarian reform is no longer what it had been in an earlier period, when it was shaped by the needs of bourgeois revolutionary developments and when rural reforms were largely undertaken on behalf of agricultural capitalism. The current demand for agrarian reform is starting to have a strong revolutionary character that opposes the mechanisms of power and super-exploitation established under the conditions of dependent capitalism. In the face of the institutionalised violence that is inflicted upon any effort by the peasantry to alter the status quo, any form of resistance by popular social movements requires a combination of broad fronts of struggle that further both the possibilities of democratic advances within the bourgeois order and actions against it.

In accordance with the Marxist dependency theory analysis, the necessary transformations are only possible by transgressing the logic imposed by the financialisation of globalised capitalism. This brings us to the need to build a revolution against this order as both a strategy of and a challenge for the working class in the countryside and in cities. We therefore reaffirm the importance of Marxist dependency theory as a scientific instrument that can both weave together reflections and indicate actions that address the financialisation of capital and its contemporary crisis, especially in Latin American countries. As such, it is crucial to revisit the Marxist dependency theory debate, historically and in the present moment, which is dialectically related to the class struggle today in Brazil, Latin America, and the world.

Image credits:

The illustrations in this dossier feature visual adaptations of book and journal covers including:

Marini, Ruy Mauro. Ruy Mauro Marini: “Dialética da dependência” e outros escritos [Ruy Mauro Marini: ‘The Dialectics of Dependency’ and Other Writings]. Organised by Roberta Traspadini and João Pedro Stedile. São Paulo: Expressão Popular, 2005.
Dos Santos, Theotônio. Imperialismo y dependencia [Imperialism and Dependency]. Caracas: Fundación Biblioteca Ayacucho, 2011.
Rodney, Walter. How Europe Underdeveloped Africa. New York and London: Verso, 2018.
Shivji, Issa. Class Struggles in Tanzania. New York and London: Monthly Review Press, 1976.
Bambirra, Vania. El capitalismo dependiente latinoamericano [Dependent Latin American Capitalism]. Mexico City: Siglo Veintiuno Editores, 1977.
Katz, Claudio. La teoría de la dependencia, cincuenta años después [Dependency Theory After Fifty Years]. Buenos Aires: Editorial Batalla de Ideas, 2019.

Notes:

↩ Furno, Imperialismo.
↩ Belli, The Country Under My Skin, 62—63.
↩ Dos Santos, A teoria de dependencia, 24, our translation.
↩ Dos Santos, A teroria de dependencia, 24, our translation.
↩ Manh-Lan (ed.), Unreal Growth.
↩ Marini, ‘Dialéctica de la dependencia: la economía exportadora’.
↩ Marini, ‘Dialética da dependência’.
↩ Patnaik and Patnaik, ‘Imperialism in the Era of Globalisation’.
↩ Ministry of Agriculture, Nota técnica: Balança Comercial do Agronegócio—Março/2019.
↩ RAIN, Acaparamiento de tierras.
↩ DATALUTA, Relatório DATALUTA Brasil.
↩ Bragon, ‘Bolsonaro incrementa verba para ruralistas’.

Bibliography:

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Belli, Gioconda. The Country Under My Skin: A Memoir of Love and War. New York: Knopf, 2002.
Dataluta—Banco de Dados da Luta pela Terra [Land Struggle Database]. Relatório Dataluta Brasil [Dataluta Brazil Report]. Presidente Prudente: UNESP, 2020. https://www.scribd.com/document/517852910/Relatorio-Dataluta-Brasil-Publi-2020#.
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Manh-Lan, Ngo, ed. Unreal Growth: Critical Studies in Asian Development. Volume 1 & 2. New Delhi: Hindustan Publishing Corporation Press, 1984.
Marini, Ruy Mauro. ‘Dialéctica de la dependencia: la economía exportadora’ [Dialectic of Dependency: The Export Economy]. Sociedad y Desarrollo, no. 1 (January—March 1972): 35—51.
Marini, Ruy Mauro. ‘Dialética da dependência’ [Dialectic of Dependency]. In Ruy Mauro Marini—vida e obra, organised by Roberta Traspadini and João Pedro Stedile, 137—180. São Paulo: Expressão Popular, 2005.
Ministério da Agricultura, Pecuária e Abastecimento [Ministry of Agriculture, Animal Husbandry and Supply]. Nota técnica: Balança Comercial do Agronegócio—Março/2019. [Technical Note: Agribusiness Trade Balance—March 2019]. Government of Brazil, 12 April 2019. https://www.gov.br/agricultura/pt-br/assuntos/noticias/participacao-do-agronegocio-nas-exportacoes-brasileiras-cresce-1-5-em-marco.
Patnaik, Utsa and Prabhat Patnaik. ‘Imperialism in the Era of Globalisation’. In The Veins of the South Are Still Open: Debates Around the Imperialism of Our Time, edited by Emiliano López, 14—51. New Delhi: LeftWord Books, 2020.