THE TWO PHASES OF STRUCTURAL ADJUSTMENT/165millennium, to demonstrate that private capitalist management is
inefficient and corrupt.
Rather, there is a need for strict control of public administration.
This means building active social movements and carrying out
thoroughgoing political and legal reforms.
BOX 5 THE CAUSES OF UNDERDEVELOPMENT AND
THE STRATEGIC SIGNIFICANCE OF NEO-LIBERALISM
A hierarchical world economy was progressively established
between the sixteenth century and the beginning of the twentieth
century. The different regions of the planet were linked through
the violence that accompanied Western European expansion. At
the beginning of the twentieth century, three centres of power
emerged as the world's dominant powers: the European continent
with Britain on top; the US (former British colonies until the end of
the eighteenth century) and Japan. Together they constitute the
'centre', in contradistinction to the 'periphery' which they
dominate.
This process involved the pillage of entire peoples by Europe's
colonial powers; it also destroyed advanced civilisations which
could otherwise have evolved in a pluralistic framework, in a
potentially non-capitalist direction. The Inca, Aztec (Galeano,
19 70), Indian (South Asia) and African civilisations were partially
or totally destroyed. It was not, however, for lack of resistance.
Karl Marx described Indian and Chinese resistance in the following
terms:The obstacles that the internal solidity and articulation of pre
capitalist national modes of production oppose to the solvent
effect of trade are strikingly apparent in the English commerce
with India and China. There the broad basis of the mode of
production is formed by the union between small-scale
agriculture and domestic industry, on top of which we have in
the Indian case the form of village communities based on
common property in the soil, which was also the original form
in China. In India, moreover, the English applied their direct
political and economic power, as masters and landlords, to
destroying these small economic communities. In so far as
English trade has had a revolutionary effect on the mode of