The second, in a limited series of micro-essays, thinking about the background and context of six development theories commonly taught by Geography teachers. If this is the first one you're reading, then I suggest starting here with Rostow and the theory of modernisation.

The Prebisch–Singer Hypothesis

Primary workers provide primary products, and secondary workers produce secondary products. We pay more for most secondary goods than we do primary goods. A washing machine costs more than a bag of potatoes. The value of the vehicle is higher than the value of gasoline. What we're saying, is we place a higher value on secondary commodities than we do on primary goods.

Prebisch gave lectures from 1945 to 1949 about the long term effects of countries being either primary-product-based or secondary-commodity-based. That tertiary-service-based doesn't feature in Prebisch's work helps us to understand the context of the time.

Prebisch made the case that the exports of secondary-commodity-based countries would have a higher value than the exports of a primary-product-based country. His theory was that as time went on, the secondary-commodity-based country would become more prosperous, and the primary-product-based countries would become more impoverished. Prebisch argued that because of the higher value of secondary commodities, countries exporting them would easily be able to afford to import primary products.

Prebisch had a theory, but no directly measurable evidence to back it up. Enter Singer, and his 1949 report 'Post-war Price Relations between Under-developed and Industrialised Countries'. Prebish and Singer, between them, had both a functioning hypothesis and were armed with statistical evidence to back it up.

The first criticisms would point to how overly-simplified the theory was. Early critics pointed out that it didn't take account of the costs of shipping, or how technological development changed the labour requirements of primary and secondary manufacturing. Later criticisms questioned the role of tariffs, quotas, exchange rates, inflation, transaction fees, government interference, and corruption. Across the short history of ideas in econometrics, the Prebisch–Singer Hypothesis has been amongst the most fiercely debated. 

However, we join our story before this flurry of criticism, back in the 1950s. Modernisation theory sits atop the intellectual throne of American academics, and the Prebisch–Singer Hypothesis is a young upstart contender hot off the press.

Splitting from the Chicago School

Andre Gunder Frank graduated from the University of Chicago in 1957 with his P.hD in Economics and a thesis on agricultural production in Soviet Ukraine under his belt. Born in Germany, to Jewish parents, his family fled first to Switzerland and then on to America as Hitler was appointed Chancellor. Frank graduated under the tutelage of Milton Freidman, even then a noted monetarist economist, whose work and ideas he would come to criticise harshly. 

It's hard to overstate the role that the Chicago School of Economics will come to play in development thinking, and it seems remarkable that this is where Frank studied given his opposition to the positions of advocated by the Chicago School of Economics. His former colleagues would eventually call him out as a renegade, but before we get to that, they offer him some postgraduate lecturing hours. As a young lecturer, Andre Gunder Frank met with Walt Whitman Rostow. Rostow was working on his noted Stages of Economic Growth model. It was at this meeting, Frank later claimed, that Rostow leant across and confided to him that he yearned to offer the world a better alternative than Karl Marx. 

Frank grew critical of Rostow's position. To Frank, Rostow's drive was exclusively the desire to win the cold war. He noted that any notion of development for people on the receiving end of aid flows was secondary to the desire to purchase allies. Frank's decision to resign came shortly after, writing a letter telling that he no longer felt he could continue to work on "development" as the U.S. was part of the problem, and not part of the solution. He understood that the cold war political climate conditioned everyone to ask the wrong questions, and so they were guaranteed to get the wrong answer for real development.

Frank headed first to Cuba, then on to Ghana and Guinea. He narrowly missed being on the ground during the Cuban Missile Crisis and relinquished his teaching post at the University of Brasilia in 1946 a month before the military coup. Recognising the use of American aid to buy the allegiance of third-world leaders, with little consideration for economic development, Frank turned his attention to the analysis of under-development and dependency. Teaching in 1965, at the National Autonomous University of Mexico, Frank's writing's were starting to have an impact. Frank shifted to being openly critical of modernisation theory and American foreign policy. Looking to move on from Mexico, the U.S.A. refused Frank permission to return because of his "further identification with the Communist Chinese position of world revolution and the destruction of the capitalist system". 

It's worth noting that Frank's publications at this time are exclusively critical of development aid programs originating from the then first-world. Frank is almost wholly silent on the subject of second-world developmental aid and regime support in third-world nations. Still, it seems a stretch to believe he wouldn't have known or understood what was happening in the Congo, Korea or Vietnam. Frank comments, in the late sixties that the Chinese seemed to have a good grip on third-world development. Whether he knew of the Cultural Revolution already underway, or the disastrous famines resulting from the Great Leap Forwards when Mao looked to implement his first five-year plan, is unclear. 

That Frank is a Marxist seems a position held only by the C.I.A. and a minority of American academics. Frank never identifies as the Marxist he is portrayed as; he goes to great lengths to describe himself as neither Marxist nor a non-Marxist in his publications. As we'll come to understand, many of Frank's structuralist positions in dependency theory will contradict many core tenets of Leninist-Marxist Thought. In his final works, Frank goes as far as to say there's little point in bothering to distinguish between communism, socialist, capitalism or feudalism - that the idea of a global core and periphery exists beyond the internal systems of nation-state administration.

The Latin New Left, the Nixon Shock, and the C.I.A. 

Taking a lecturing position at the Unversity of Chile in 1967, Frank published his most celebrated work: Capitalism and Underdevelopment in Latin America. Although Frank continued to publish throughout his life, Capitalism and Underdevelopment in Latin America is considered his best and most well-read work on dependency theory. His experiences living in Latin America during the rise of the Latin New Left reinforced his standpoint of the developed core exploiting the underdeveloped periphery.

Frank stayed in Chile as Salvador Allende rose to power, acting as an economic advisor alongside his lecturing duties. A lifelong socialist, Salvador Allende was the first Latin American Marxist to be freely elected in a liberal democracy. Allende nationalised industries, repeatedly raised the minimum wage for blue-collar workers, and during his first year, he oversaw G.D.P. grow and inflation stabilise. It was not to last. 

Since 1944, the world's economy had remained stable, controlled and limited by the mechanisms put in place at the Bretton Woods conference. As calm as the global economy had stayed, the system was straining and it was not without its critics. Facing demands from NATO partners that the whole system be drawn to a close, and in some cases withdrawing unilaterally, President Nixon pulled the plug on August 15th, 1971. 

Debates over the Nixon shock continue to this day. Some argue Nixon had no choice in the face of the Brezhnev Doctrine. General Secretary of the Soviet Union, Leonid Brezhnev, had declared that any invasion was justified if a country tried to replace Marxism–Leninism with capitalism. Some say it was a calculated economic move in the face of mounting debt from fighting foreign wars. Some argue that the Nixon Shock led us to the inflation and lost decade of development to come in the 1980s, and some can trace a clear path from the Nixon Shock to the 2008 financial crisis. There are arguments that the creation of the single European currency was, in part, a response to the Nixon shock ending the Bretton Woods accord. On the domestic front, Nixon's actions were hailed as a great success; the New York Times editorial reporting that they "unhesitatingly applaud the boldness with which the President has moved." 

As Chile nationalised its copper industry in line with the Allende reforms in 1970, the U.S. cut its line of credit claiming it was competing unfairly. As the Nixon shock played out through across the world in 1971, the global price of copper drastically fell. The Chilean government had overspent, and with no line of U.S. credit to help, it was caught vulnerable and overexposed. The Soviet Union and China couldn't, or wouldn't, offer enough to help, and inflation began to take its toll. When the Chilean crisis ended and the dust settled in 1973, Allende had met his end at the hands of a bullet, and the C.I.A. backed military coup had taken control. Andre Gunder Frank became a political exile and fled to Berlin. 

The Theory of Dependency

At the risk of being over-reductive, dependency theory lives wrapped in the life experiences of Andre Gunder Frank. Unlike Rostow and the advocates of modernisation, Frank undertook a radical approach to fieldwork. He travelled widely and saw first hand the impacts of foreign policies drafted to crush an opposing hegemonic force. Dependency theory was born of lived experience draped over the Prebisch–Singer Hypothesis.

For most advocates of dependency theory, world history from 1500 to the 1960s was a process. Wealthier European nations accumulated wealth through extracting natural resources from poorer nations. The profits from this extraction paid for the industrialisation and social development of European powers while leaving the developing countries destitute; the Prebisch–Singer Hypothesis played out.

Dependency theory became very influential; African and Latin American delegates quoted Frank's work at U.N. Development meetings. The impact of colonial and post-colonial actions was now firmly established in the dialogue of international development. The theory challenged many assumptions of modernisation. It explained Moyo's assessment that "by the beginning of the 1970s, there was still not much infrastructure to speak of'. What followed was a switch to focus support on the poorest, away from big infrastructural projects. Dependency theory can be credited with significant changes to the focus of the World Bank, influencing Robert McNamara to start to address issues of global poverty.

Dependency theory is not, however, without its shortcomings. First among these is that it homogenises nations; an issue it shares with the modernisation theories it came to supplant. Countries are either industrialised or not. Dependency theory gives no allowance for a middle ground; it is a theory organised around the actuality of a gap. Frank was confident of the existence of this development gap; his life had given him all the anecdotal evidence he needed to be sure.

Fast forward to 2020, and although the language of a development gap remains entrenched, the statistical evidence made available to us paints a different picture. Hans Rosling refers to our tendency to divide things into two distinct groups with an imagined gap between them as the gap instinct. "Dividing countries into two groups no longer make sense," says Rosling, with statistical evidence showing that 85% of humans are now in living comparable conditions to the developed world of the 1960s.

The homogenisation of nations in dependency theory makes no allowance for the intersection of culture, coastlines, civil wars, or quality of governance. For Frank, there is only the core and the periphery. Frank’s position of the exploiters and the exploited reads like the opening to Anna Karenina. All core countries are alike in their industrialisation, all periphery countries alike in their underdevelopment. That Capitalism and Underdevelopment in Latin America was published three years before Boserup's Woman's Role in Economic Development made it to print, might help to explain the absence of 50% of the population from his thinking. Frank forms the latest link in a long chain of male development thinkers overlooking the contributions of women.

For Frank, the development gap is timeless, ever-present, and unchangeable. Dependency theory offers no mechanism by which a peripheral nation can industrialise. Marxist theories criticise this, arguing that insurgency would lead to industrialisation following the establishment of a worker-state. Further criticism comes from advocates of free-markets, advocates of the Chicago School of Economics point to the growth of secondary-commodity-production in the global periphery brought about by economic patterns like outsourcing, free trade areas, and economic processing zones.

Jeffrey Sachs criticises the economic assertions of Prebisch–Singer Hypothesis in his 2005 book, The End of Poverty. Sachs presents dependency theory as the assumption that "Europe and the United States used military force and political strength during and after the era of colonialism to extract wealth from the poorest regions, and thereby to grow rich." He states that "this interpretation of events would be plausible if gross world product had remained roughly constant." Sachs goes on to state that "the key fact of modern times is not the transfer of income from one region to another, by force or otherwise, but rather the overall increase in world income, but at a different rate in different regions." Sachs finds that those nations ascribed to Franks periphery have seen both industrialisation and economic development.

Frank's radical approach to fieldwork and the recognition of modernisation theories failure to deliver any real development in the 1960s gave rise to dependency theory's notoriety and prominence in development thinking in the 1970s. Teaching it without this context risks overlooking how ideas are supplanted in popular opinion. It can also reduce the complexity of the world economic system to a two-way exchange of diminishing returns. It can go as far as to remove the very sense of place that makes nation-states what they are. Homogenising the peoples of entire continents is culturally reductive and robs people of their heritage, identity, and agency. 

Not teaching it, risks taking away our understanding of the role that fieldwork and lived experience can play in how we construct our standpoints and how the discipline of Geography has developed over time. Dependency theory matters; it forever changed our discourse on development and repurposed the World Bank and the I.M.F. Dependency theory provides a satisfyingly intuitive explanation for much of the world's inequality. That it doesn't stand up well to statistical analysis doesn't detract from its enduring popularity among neo-Marxist groups or its resurgence among commentators of the post-2008 financial landscape. 

On to the 80's

The 1980s saw two challenges to the authority of dependency theory in development narratives from which it never recovered. In America, Reagan swore his oath and took his seat in the oval office. He brought with him the most influential economist of the 20th Century, Milton Friedman, and heralded the era of 'Reaganomics' and the global influence of the Chicago School of Economics. At the same time across the Pacific, a miracle had been taking place on the Han River; the four Asian Tigers had industrialised. 

TL;DR

Andre Gunter Frank experienced first-hand the exploitation of third-world nations by American Imperialism during the Cold War. He saw this as a continuation of colonial patterns of exploitation and, based on the Prebish-Singer Hypothesis, saw that the global periphery would be kept forever dependent on the industrialised core.

A thought on positionality

I think about development with the words of Andre Frank, Dambisa Moyo, Jeffrey Sachs, Swaminathan S. Anklesaria Aiyar, Milton Friedman, Thomas Piketty, John Maynard Keynes, Frantz Omar Fanon, Daron Acemoglu, James Robinson, Mahmood Mamdani, Deepak Lal, Peter Frankopan, Paul Collier, William Easterly, Jong-Dae Park, Thomas Sowell, and Albert Memmi. 

I also think with what I've made from all the people I've met, the conversations I've had, the countries I've lived in, and the languages I've learnt. We think with what we know. 

Our standpoints on development discourse are constructive. Mine is imperfect. I’m consenting to learn in public. Ancora Imparo.