Latin American history is the story of on-and-off again exploitation; from being a colonial possession to a neo-colonial inferior. There have been very few periods in time that the continent has been able to develop without interference. By examining the origins and events that have occurred during Latin America's history we see what 1970's and 80's intellectuals label the economic dependency theory at work, however upon critically analyzing the dependency theory we see certain flaws in both its content and solution to ending Latin American dependency.
[...] These ideas spread throughout Latin America safe in most Central states, which were still under the authority of US backed dictators (who had economic interests to protect) and foreign companies. Throughout the 1900- 1930 time period there is a rise of numerous new nationalist governments through both revolution (Mexico) and election (Uruguay and Argentina). These countries were not the only ones to undergo a transformation, but were among the first to change in the first phase of nationalism. Nationalist rhetoric promising land reforms and equality combined with its uneven relationship with the US (due to constant interventions in Latin America, including 2 during the Mexican revolution) would see the 1910 Mexican revolution take place. [...]
[...] Underdevelopment to Marxist dependency theorists is a product of capitalism, and after the rise of dictators in Latin America it was used as an explanation for Latin American “backwardness” and the wide wage gap that existed in societies. Despite the large element of truth that the dependency theory contains critics find flaws on certain points, and in its endorsement of socialism as a solution to underdevelopment. Despite the truth contained in the dependency theory there exist some flaws concerning certain points in the Marxist version that radical leftist Latin Americans adopted. [...]
[...] Under this system the terms of trade favor the developed states that comprise the ‘center' in the dependency theory, and Latin America as the periphery is fated to be exploited. Central American states under authoritarian dictators and the United Fruit Company did not partake in the export boom period. Not only did trade under the export system favor the developed states, but European's and American's essentially ran the system; they were the shippers, bankers, and builders. An export based economy like those in Southern Latin America do not require a complex infrastructure (only a large pool of wage workers, created by knocking peasants off the land) in order to function, and the elites who were raking in high profits and who controlled a non-inclusive political system felt no need to poor money into development that would threaten their social privileges. [...]
[...] With the American wartime economy demobilized and back to normal the US would be looking to Latin America to resume its role as a neo-colonial raw material provider. With the re-entry of the United States (and some of Europe) into the international economy the Latin American industries would suffer and as a result the economy would weaken. Nationalist governments would no longer be able to fund social reforms, inflation and unemployment would rise and the people's support would begin to swing back to the right with the old conservatives. [...]
[...] Import industrialization substitution would remain the dominant ideology in Latin America until the 1950's and 60's when America would come storming back from World War II wanting to re-institute the old system of neo-colonial exploitation. The developmental situation in Central America at the same time is a different story. There are a various amount of reasons as to why Central American states did not undergo any form of industrialization outside the fact that authoritarian dictators controlled them. The Central American population was too small to support ISI, and their wages were sub-survival. [...]
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