The state, it was argued, had become subservient to the multinational com-
panies that controlled the industrialization process. Greater sovereignty had
not been achieved. Rather than liberal democracy and pluralism developing,
politics became more authoritarian and repressive as governments tried to
cope with the social strains brought about by the industrializing process.
Managing the industrial labour-force as well as the marginalized masses
seemed to require military dictatorship rather than pluralist democracy.
The elements of dependency theory
The dependency theorizing of the late 1960s and 1970s attempted to explain
the consequences of industrialization and import substitution strategies. The
perception of what was happening was summed up by Cardoso (1972) as
‘dependent development’, a somewhat controversial label since the
main thrust of dependency theory was to argue that poor countries were being
underdeveloped, not developed. There are five main strands in dependency
theory: the idea of a hierarchy of states; the concept of ‘underdevelopment’; a
view about the nature of capitalism; propositions concerning ‘disarticulation’;
and the effect of economic dependency of the structure of political power.
Hierarchyfinds its expression in ‘centre–periphery’ or ‘metropolitan–
satellite’ models of relations between the great world centres of capital and
the economies that are dependent upon them. A hierarchy of centres and
peripheries is said to connect all levels of exploitation between one country
and another and within the countries of the periphery. There is a steady
extraction of surplus through the different levels in the hierarchy: from
peasant to landlord; from landlord to local merchant; merchant to subsidiary
of a multinational; subsidiary to headquarters of the MNC; headquarters to
the major financial institutions of the West. Mining, commercial, agricul-
tural and even military centres within the peripheral satellites constitute
‘micro-metropolises’ in relation to their hinterlands of small towns, mines
andlatifundiawhich themselves relate in the same way to isolated workers.
Similar relations of exploitation link industrial firms to the suppliers of
components; large merchants and financiers to small traders and money-
lenders; and city merchants and landowners to small rural producers and
consumers (Frank, 1966, p. 19; 1969a, pp. 16–17).
Underdevelopmentrefers to a continuing relationship of exploitation
where at any one level in the chain the full economic surplus is not available
for reinvestment. It is removed, ultimately accumulating in the metropolitan
centres: ‘the metropolis expropriates economic surplus from its satellites
88 Understanding Third World Politics