Andre Gunter Frank: Theorist of underdevelopment

...I recently went back to read Frank’s theory of dependency. While many trash it and would point to the miracles of India and China as proof that ‘low-income’ nations can take a magic path to development, there is a lot to learn from Frank.

Frank is defined as a ‘development theorist’, and argued that development and underdevelopment are essentially two sides of the same coin. This is because underdevelopment results from a development that occurs through exploitation and suppression: which are a necessary component of the West's wealth accumulation and development.

On that point, by the way, there is a bunch of reasons while parts of China and India are doing so well – and in many ways, Frank’s arguments provide us insights around the satellite/centre reliance that has occurred within both China.

So, here is a solute to Frank and his work – done my reminding us of some of the important insights that he has provided us.

Frank’s analysis evolves around colonialism and imperialism – but he also stressed that it was not about substituting this ahead or in replacement of class analysis – rather a compliment to it.


Part 1: history

Frank begins his analysis by arguing that capitalism brings inevitably creates under-development: this is a systematic feature of capitalism that must be confronted. Frank’s project is to look the limitations of capitalism and how the demands to industrialise and develop lead to continued under-development of satellite nations. To do this, he looks at the ‘so-called’ inefficient and poor Brazilian Agricultural economy and argues that it is caused by international capitalist flows that place demands on poorer nations.

Frank then turns to remind us of the history and historical economic, colonialist and imperialist processes that have created the current capitalism-satellite relationships between nations: that is, we have powerful, wealthy nations in the centre (US and Europe), and smaller nations on the semi-periphery (such as Australia) and poor nations as satellites on the periphery. It is the exploitation of the satellite states that allows the wealthy to stay wealthy. Noting this, Frank states:

…it is fruitless to expect underdeveloped countries of today to respect the stages of economic growth passed through developed societies (p. xii)

Frank also argues that language is important – more implicitly than explicitly – noting that there is damage done when we describe people from the ‘third world’ and say that they are ‘backward’.

Importantly, Frank believes that the process of imperialism have concentrated wealthy within poorer nations – a concentration that continues to ensure that they stay on the periphery.

Combining these various streams, Frank’s key conclusion is that national capitalism together with the high level of concentration of wealth means that capitalism offers little, if any, way out of Latin America’s underdevelopment

So, given this colonial past, we cannot expect this capitalist structure to ever liberate the low-income world – rather, the role of promoting real development has fallen to the people alone. Frank argued that it was the responsibility of the intellectual to support these struggles. But to understand what people in low-income nations really need and want, Frank notes her had to “free myself of the liberal maxim” (p. xiv).

Frank then notes that we he first started his work, he believed that the problems of development were largely domestic – but for many, the problems are cased by liberal ideology that puts pressure on individual development and wealth.


Part 2: Internal colonialist development and capitalist underdevelopment

In this section Frank turns to expand his point that the imperialist project also led to internal colonialism. Imperialism should be viewed not as a specific series of events but fundamental to capitalism itself.

The internal colonialism has led to a concentration of wealth and power which leads to a polarisation of wealth because of the:

1. Concentration of investment in both the public and private sphere;
2. The emergence of a regressive taxation structure; and
3. A transfer of capitalism from poor to wealth areas.

Analysing this, Frank argues that we get similar patterns internally as emerge in the international satellite structures. There is an exploitation that occurs between the national ‘centres’ and the periphery – especially the rural areas. This leads to single crop production that can lead to further reliance by the periphery.

Colonialism also gave rise to a structure that benefited a specific landed class. This resulted in a concentration of income to a few individuals and families. In this way, ‘development’ leads to a loss of land for many. Farmers, therefore, move from tenants to agricultural wage earners – which ultimately leads to a fall in the quality of life.

This is cemented by tax concessions and subsidies that assist in the concentration: monetary and fiscal policies that assist wealthy farmers at the expense of farmers. The system is unlikely to change as it benefits those in charge.


Part 3: Imperialist development and capitalist under-development

One idea that Frank continues to come back to in his arguments is that under-development is driven by structural cause. In an insight that many of those theorists that are concerned about the excess of free markets – including me of course – that when the markets fail the solution is more access to markets, Frank argued that the very policies that have caused problems are the ones that are re-introduced.

He also argued that there are many important economic issues, such as terms of trade, which are used take the focus away from the real structural problems causing under-development.

He then turns to make two broad arguments that I suppose would be dismissed today. The first is the argument for ‘import substitution’. Importantly, Frank states that it has to be a specific form and around specific goods, can work. In its current form, however, it does not work and mainly aggravates the problems of development.

The second point that Frank makes is that technology continues to be expensive and continues to keep the periphery reliant on the core. This has changed somewhat, but access to technology that is both affordable and appropriate continues to be a problem 40 plus years after Frank wrote this work.

In finishing this section, Frank argues that there is little chance in overcoming the crisis of under-development within the very system that produces it (p.213).


Conclusion

Frank concludes by returning to the issue of Brazil – which he sees as continually becoming ever more integrated in the metropolis/satellite structure of the world capitalist system. Within this system, there is little chance to act independently: for those who though that the left leaning president, Lulu, would change this have seen just how integrated Brazil is in this periphery/core system. Frank concludes by saying that to change this, we must see the system changed the masses of people rather than the elites who have been captured (p.217).


Frank, A.G. (1967) Capitalism and underdevelopment in Latin America; historical studies of Chile and Brazil, New York, Monthly Review Press