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Title:
Marxist Theories of Development, the New International Division of Labor, and the Third World
Journal Issue:
Berkeley Planning Journal, 9(1)
Author:
Parthasarathy, Balaji
Publication Date:
1994
Publication Info:
Berkeley Planning Journal
Permalink:
http://escholarship.org/uc/item/6d4039j5
Local Identifier:
ucb_crp_bpj_13075
Abstract:
What are the implications for development in the Third World in light of the widespread intellectual
retreat from Marxist theory and practice in recent years? This essay offers an answer to this
question by focusing on the current debate concerning the rise of a new inter national division of
labor (NIDL). The debate over the NIDL has much significance given the growing interpenetration
of various re gional and national economies in an increasingly integrated global economy. But
while one can safely argue that integration with the global economy is now essential to economic
growth, the terms of the debate over that process appear to have shifted to the mechanism and
conditions of integration for hitherto isolated economies. This essay will delineate the trajectory
taken by the NIDL debate to date and will suggest how an historical-structural approach in the
Marxist tradition, provides opportunities for furthering the discussion.
The essay first provides a brief overview of Marxist theories of Third World development, including
the ideas of Marx, Lenin and key post-World War II dependency theorists. Next, it highlights key
points of continuity and discontinuity between these older theories and the current debate on
the NIDL. The essay then concludes with a discus sion of both the structural and historically
determined economic and political constraints on the incorporation of the Third World into the
NIDL before setting out some questions for future research.
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Marxist Theories of Development, the New I nternational
Division of Labor, and the Third World
Balaji Parthasarathy
I ntroduction
What are the i mpl i cati ons for development in the Thi rd Worl d i n
l i ght of t he wi despread i ntel lectual retreat from Marxi st theory and
practi ce i n recent years? Thi s essay ofers an answer t o thi s questi on
by focusi ng on the current debate concerni ng the ri se of a new i nter
nati onal di vi si on of l abor ( NI DL) .
1
The debate over the NI DL has
much si gni fi cance given the growi ng i nterpenetrati on of vari ous re
gi onal and nati onal economi es in an i ncreasi ngl y i ntegrated gl obal
economy. But whi l e one can safel y argue that i ntegrati on wi th the
gl obal economy i s now essenti al to economi c growth, the terms of the
debate over that process appear to have shifed to the mechani sm and
condi ti ons of i ntegrati on for hi therto i sol ated economi es. Thi s essay
wi l l del i neate the trajectory taken by the NI DL debate to date and wi l l
suggest how an hi stori cal -structural approach i n the Marxi st tradi ti on,
provides opportuni ti es for furheri ng the di scussi on.
The essay fi rst provi des a bri ef overvi ew of Marxi st theor i es of
Thi rd Worl d development, i ncl udi ng the i deas of Marx, Leni n and key
post-Worl d War II dependency theori sts. Next, i t hi ghl i ghts key poi nts
of cont i nui ty and di scont i nui ty between these older theories and the
current debate on the NI DL. The essay then concl udes with a di scus
si on of both the structural and hi stori cal l y determi ned economi c and
pol i ti cal constrai nts on the i ncorporati on of the Thi rd Worl d i nto the
NI DL before setti ng out some questi ons for future reearch. 2
Marxist Theories and the Third World
Si nce much of what i s referred to as the Thi rd Worl d was under
col oni al domi nati on by the nati ons of Europe i n the mi d-1 9th century,
Marx's vi ews must be i nterpreted through his vi ews on col oni al i sm.
( Avi neri 1 968) . Because he saw capi tal i s m as a progressi ve force,
Marx thought that col oni al i sm woul d benefit the col oni es by i ntro
duci ng capi tal i st rel ati ons. Capi tal i sm was progressi ve because i t had
an endogenous dynami sm whi ch earl i er soci o-economi c systems
l acked. The very survi val of capi tal i sm hi nged on its conti nui ng abi l ity
to revol uti oni ze its means of producti on. As economi c acti vi ty pro
vi ded the bas i s for soci al structure, such dynami sm extended to the
Berkeley Planning )ournal 9 ( 1 994), 1 09-1 24 1 09
Berkeley Planning Journal
soci al real m too; even "tradi ti onal and unchangi ng" soci eti es and
peopl es were i nevi tabl y drawn i nto i ts fol d and rescued from the
"i di ocy of rural l i fe" and ol d prej udi ces. Thus, Marx di sti ngui shed
between what he saw as the objecti ve l aws of hi story and col oni al i sm
as a moral l y untenabl e practi ce.
Capi tal i sm' s soci o-economi c dynami sm was expl ai ned by the
l ogi c of its reproducti on. Thi s l ogi c requi red the conti nuous extracti on
of surpl us val ue from producti on. Essenti al l y, the producti on process
transformed nature i nto commodi ti es for sal e. The effi cacy of such
transformati on depended on the techni cal means at the di sposal of the
capi tal i st. More i mportant, i t depended on the rel ati ons of producti on,
si nce producti on al so requi red the use of l abor power. I ndeed, to
Marx, the l abor i nput was the source of val ue. Marx saw the extrac
tion of surpl us and the i mmi serati on of wage labor as the basi s for
cl ass confl i ct. Such confl i ct woul d resul t in the eventual overthrow of
the bourgeoi si e and the establ i shment of a system where pri vate
property and the extracti on of surpl us by the subjugati on of l abor
woul d be abol i shed.
Whi l e the i ssue of col oni al i sm was never central to Marx' s wri t
i ngs, Leni n ( 1 939) wrote more speci fi cal l y on the subject in the earl y
20th century. I n doi ng so, Leni n made an i mportant departure from
Marx, argui ng that col oni al i sm woul d retard deel opment in the
col oni es. To Leni n, col oni al i sm was the outcome of i mper i al i sm, the
hi ghest stage of capi tal i sm. Thi s stage was characteri zed by the for
mati on of monopol i es and a concentrati on of fi nance capi tal and pro
ducti on. Seeki ng new i nvestment opportuni ti es for capi tal and new
sources of raw materi al s, the strongest capi tal i st nati ons parti ti oned
the worl d i nto col oni es. Thus, col oni al i sm brought much of the non
capi tal i st worl d under the control of i nternati onal capi tal and l ocked
the new col oni es i nto the i nternati onal di vi si on of l abor as suppl i ers
of raw materi al .
By the 1 960s, however, i t was not cl ear that the worl d-wide spread
of capi tal i sm had l ed to the progressi ve transformati on of al l soci eti es.
Nor had pol i ti cal i ndependence si gni fi cantl y i mproved the condi ti ons
of the former col oni es. On the contrary, by most economi c and we l
fare measures, much of the Thi rd Worl d was not fari ng wel l . I t was i n
thi s context that dependency theory arose. Frank ( 1 967) , i ts most i m
portant spokesperon, drew on studi es of Brazi l and Chi l e t o argue
that si nce the si xteenth century, an expandi ng worl d economy cen
tered in cerai n core regi ons had i ncorporated an unevel oped p
ri phery in the form of col oni es. But i ncorporati on i nto the worl d
economy had l ed to a systemat i c economi c underevel opment of the
1 1 0
Marxist Theories of Development, Parthasarathy
peri phery; col oni es were drai ned of surpl us as they exchanged pri
mary products for manufactured goods from the i ndustr i al i zed core
regi ons. Frank and others argued that pol i ti cal i ndepen dence did not
al ter thi s state of affai rs si nce the i nterests of the domi nant cl asses i n
the peri phery were cl osel y ti ed wi th those i n the core.
I n one sense, Frank' s thesi s l i nki ng retarded growth in the peri ph
ery to the spread of capi tal i sm, conti nued Leni n' s l i ne of thought.
However, the argument that devel opment i n the core woul d onl y l ead
to underdevel opment i n the peri phery was a probl emati c di sconti nu
i ty. To begi n wi th, i t had onl y l i mi ted empi ri cal val i di ty. For i nstance,
Brazi l i ndustr i al i zed extensi vel y si nce Worl d War I I; the 1 960s was a
peri od of rapi d economi c growth ( Evans 1 979) . Evans showed how
t hi s growth was made possi bl e by an al l i ance between the Brazi l i an
State, l ocal capi tal and mul ti nati onal corporati ons ( MNCs) ; he argued
that devel opment was not i nconcei vabl e even under condi ti ons of
dependency. The i nabi l i ty of Frank' s thesi s to account for such con
tradi ctory evidence hi ghl i ghts two broader probl ems in hi s arguments.
F i rst, i t presented a stati c pi cture of rel ati ons i n a changi ng worl d
economy. Second, by maki ng rel ati ons wi th the core the engi ne of al l
devel opment, i t fai l ed t o consi der whether and how changi ng condi
ti ons wi thi n the peri phery, such as shi fti ng soci al al l i ances, coul d af
fect economi c devel opment.
These probl ems were a poi nt of departure for Cardoso and Fal etto
( 1 979) who cal l ed for a more nuanced understandi ng of dependency.
They and other authors acknowl edged that dependency constrai ns
devel opment, representi ng "asymmetri cal structural rel ati ons between
soci al formati ons, such that the dependent soci ety( i es) is shaped to a
l arge extent by the soci al dynami cs and i nterests generated in the
domi nant soci ety( i es) " (Castel l s and Laserna 1 989: 535) . However,
Cardoso and Fal etto argued that a si mpl e core-peri phery formul ati on
coul d not account for the wi de vari ati on i n the condi ti ons of depend
ency even among Lati n Ameri can soci eti es. I nstead, they cal l ed for an
"hi stori cal -structural " approach that "emphasi zes not j ust the struc
tural condi ti oni ng of soci al l i fe but al so the hi stori cal transformati ons
of structures by confl i ct, soci al movements, and cl ass struggl es"
(Cardoso and Fal etto 1 979 : x) . I n other words, dependency i s not so
much a formal theory as i t i s a methode l ogy for the anal ysi s of con
crete si tuati ons of underdevel opment ( Pal ma 1 978) . The di scredi ti ng
of dependency theory di d not, however, prevent i ts rei ncarnati on i n a
di fferent for m: theori es of the New I nternati onal Di vi si on of Labor
( NI DL) .
1 1 1
Berkeley Planning Journal
Marxism and the New I nternational Division of Labor
One of the stri ki ng features of the post-Worl d War II gl obal econ
omy has been the emergence of a new i nternati onal di vi si on of l abor,
in whi ch many countries that previ ousl y exchanged pri mary products
for manufactured goods from advanced i ndustri al regi ons are now
emergi ng as manufacturi ng centers in thei r own right. Though the
emergence of a NI DL i s widely acknowl edged among schol ars, thei r
efforts to theori ze further changes i n the worl d economy have
adopted a l ogi c si mi l ar to dependency theory, reproduci ng its fl aws i n
the bargai n.
Frobel et a/ . ( 1 980) argue that a NI DL emerged out of cha'i ng
market and producti on condi ti ons in ad- anced i ndustri al rei ons. The
changes led MNCs from those countri es to try to l ower costs by relo
cat i ng l abor-i ntensi ve producti on processes to regi ons suppl yi ng
cheap, unski l l ed l abor. Many of these l ocati ons were i n the Thi rd
Worl d. MNCs were abl e to rel ocate producti on in part because of
technol ogi cal changes that si mul taneousl y al lowed for the reducti on
of transportati on costs and the l i nki ng and coordi nati ng of producti on
across segmented si tes by telecommuni cati ons and computers. Such
rel ocati ons began to generate a worl d market for l abor and i ndustri al
si tes, as di fferent regi ons competed wi th one another to offer the best
condi ti ons for the reproducti on of capi tal . These efforts occured to the
detri ment of i mportant Thi rd World devel opmental goal s such as re
duci ng unempl oyment ( s i nce there was a vi rtual l y i nexhausti bl e
gl obal l abor pool ) ; rai si ng ski l l l evel s of the work-force; reduci ng envi
ronmental damage; and so on.
Whi l e Frobel et a/. emphasi ze the changi ng technol ogi cal condi
ti ons of producti on, Li pi etz ( 1 982) pl aces the NI DL i n the context of
broader i nstituti onal changes wi thi n capi tal i sm. To Li pietz, wri ti ng i n
the tradi ti on of the French Regul ati on school , the manufacturi ng dy
nami c in the Thi rd Worl d was dri ven by the cri si s of Fordi sm in ad
vanced i ndustri al regi ons.
3
Whi l e there were many reasons behi nd the
sl owi ng growth in post-war prosper i ty, to are parti cul arl y rel evant
for ri se of the NI DL: sl ackeni ng producti vity and the i nsuffi ci ent sur
pl us bei ng extracted from i nvested capi tal . To i ncrease its surpl us,
capi tal sought locati ons wi th cheap l abor to such an extent that l abor
processes under mass producti on were di chotomi zed between con
ception and producti on, between hi gh-ski l led and unski l l ed jobs.
The rel ocati on of manufacturi ng fi ts wel l i nto the agenda of Thi rd
World el i tes seeki ng to expl oi t thei r comparative advantage in cheap
l abor markets. Li pi etz sees the NI DL as the outcome of a col l abora
ti on between capi tal from the core and di ctatori al States that suppor
1 1 2
Marxist Theories of Development, Parthasarathy
"bl oody-Tayl ori zati on, " or the repeti ti ve performance of unski l l ed
tasks under repressi ve condi ti ons. Though Li pi etz acknowl edges the
efforts of newl y i ndustri al i zi ng countri es ( NI Cs) i n the peri phery to
i mprove thei r technol ogi cal capabi l i ty and go beyond expl oi t i ng a
comparati ve advantage in cheap, unski l l ed l abor, he is pessi mi st i c
about thei r prospects. Whi l e Li pi etz posi ts a "gl obal Fordi sm, " or the
i ncorporati on of the peri phery i nto Ford i sm of the core, he argues that
Fordi st i nsti tuti ons do not devel op i n the peri phery i tsel f. The cri si s of
Fordi sm in the core wi l l i nhi bi t efforts by NI Cs to expand exports. At
the same ti me, i nadequate producti vity growth wi l l precl ude the de
vel opment of i nternal markets, as was the case with previ ous attempts
to spur i ndustri al i zati on through i mpo-substi tuti on.
The l i mitati ons of NI DL theory become cl ear as we exami ne some
of the empi ri cal features of the phenomenon. For i nstance, evi dence
suggests that unski l l ed, l ow-wage l abor al one does not adequatel y
expl ai n what happens once MNCs rel ocate to the Thi rd Worl d. Cer
tai nl y, there has been si gni fi cant rel ocati on in sectors l i ke el ectroni cs
assembl y and texti l es whi ch use such l abor. But as Sal i h, Young, and
Rasi ah ( 1 988) poi nt out, MNCs runni ng semi conductor pl ants i n Pe
nang, Mal aysi a, have not rstri cted thei r operati ons to unski l l ed as
sembl y or packi ng. I nstead, over ti me, they have i nvested heavi l y and
automated the producti on process. As a resul t, they have moved away
from unski l l ed l abor toward more expensi ve ski l l ed l abor. In hi ri ng
ski l l ed l abor, t he key i ssue has been not costs but di sci pl i ne, t he abi l
i ty t o l earn, and producti vity. Shai ken ( 1 994) al so shows that produc
t i vi ty l evel s i n J apanese- and U. S. -owned automobi l e factori es i n
Mexi co compare favorabl y t o those i n Japan and the U. S. , owi ng to
the use of sophi sti cated technology.
Whi l e l abor in Mal aysi a and Mexi co, whether ski l l ed or unski l l ed,
certai nl y costs much l ess than that i n the U . 5. , these exampl es hi gh
l i ght the i mportance of technol ogy and producti vity in deter mi ni ng
l ocati on. Technol ogi cal change, such as t he i ncreasi ng tendency t
ward automated producti on, si gni fi cantl y decreases the need for l ow
wage l abor and the expl anatory power of any s i mpl e cost
mi ni mi zati on argument. Jenki ns ( 1 984) argues that the mai n fl aw wi th
expl anati ons for the NI DL i s the assumpti on that absol ute surpl us e
tracti on-i n whi ch producers force l aborers to work l ong hours i n di f
fi cul t conditi ons-i s the pri nci pal basi s for capi tal accumul ati on. I n
real i ty, rel ati ve surpl us extracti on, through technol ogi cal i nnovati on,
i s the "general basi s for accumul ati on i n the capi tal i st mode of pro
ducti on. " Consequentl y, "rel ocati on can be seen as a speci fi c re
sponse whi ch ari ses i n ci rcumstances when there are major obstacl es
1 1 3
Berkeley Planning Journal
to i ncreasi ng rel at i ve sur pl us val ue" {Jenki ns 1 984: 43) . Castel l s
( 1 989b) goes even further when he suggests that wi th growi ng tech
nol ogi cal sophi sti cati on, unski l l ed, l ow-wage l abor no l onger pro
vi des comparati ve advantage for a regi on. Producti vi ty gai ns that
come wi th appl yi ng better technol ogy far outwei gh the cost benefits
of usi ng unski l led low wage l abor.
Nei ther jenki ns nor Castel l s suggests that the cost of ski l l ed l abor,
as opposed to unski l led l abor, i s now becomi ng the determi ni ng fac
tor for MNCs. Such an argument woul d onl y conti nue narrowl y to
emphasi ze producti on and supply factors to the excl usi on of demand
and competi ti ve strategi es. I nstead, as Schoenberger ( 1 988) argues,
the l ocati on of MNCs i s dete rmi ned s i mul taneousl y by revenue
maxi mi zati on and cost mi ni mi zati on, producti on and compet i t i on.
The deci si on to l ocate i n the Thi rd Worl d i s often dri ven by t he desi re
to gai n access to new, and often protected, markets in an i ncreasi ngl y
competi ti ve envi ronment. Further, as i ncomes ri se, nati onal/regi onal
markets become more di scerni ng and di fferenti ated. Under these ci r
cumstances, technol ogy and product di ferenti ati on are as cruci al i n
determi ni ng competi ti ve outcomes as pri ce. And l i nki ng producti on to
research and marketi ng functi ons becomes an effecti ve means of en
sur i ng that the vari ous demands of di fferenti ated markets are met.
Thus, i nstead of a si mpl e geographi c separ ati on of functi ons that al
l ows one t o " read" an economy from t he functi ons i t hosts, t he l oca
ti onal deci si ons of MNCs in the NI DL must be seen as a dynami c
trade-off between suppl y, competi ti on and technol ogi cal change.
Whi l e the cri ti que of the NI DL thus far has focused on the rol e of
MNCs, there remai ns the l arger questi on of the extent to whi ch MNCs
have been actual l y responsi bl e for the emergence of the NI DL.
Schoenberger ( 1 988) suggests that NI DL theori sts may exaggerate the
rol e of MNCs. Whi l e U. S. di rect forei gn i nvestment ( DFI ) , for i nstance,
has been i ncreasi ngl y di rected toward the Thi rd Worl d, cl ose to three
quarters of i t is sti l l di rected to hi gh-cost areas in the core, where the
major markets are. The U. S. i tsel f has become an attracti ve l ocati on
for DFI from other countri es. However, among Thi rd Worl d countri es,
onl y a handful of NI Cs in East As i a and Lat i n Ameri ca account for
most of the U. S. DFI .
I n a more powerful cri ti que, Amsden ( 1 990) uses t he i nstance of
South Korea' s ri se as a major worl d exporter to chal l enge the vi ew
that endogenous devel opment is not possi bl e i n the Thi rd Worl d.
Amsden speci fi cal l y cr i t i ci zes Li pi etz' s thes i s . She argues that the
MNC-dri ven, export- l ed growth i s too modest to expl ai n the eco
nomi c devel opment and spread of manufacturi ng capabi l ity in the
1 1 4
Marxist Theories of Development, Parthasarathy
Thi rd Worl d. I nstead, she suggests a theory of government i nterven
ti on to enabl e l ate i ndustri al i zati on i n the l atter hal f of the 20th cen
tury. I n thi s peri od, she argues, the key to i ndustri al i zati on has been i n
rai si ng producti vi ty and i nternati onal competi ti veness, wi th State i n
sti tuti ons pl ayi ng a central rol e. Whi l e Li pi etz' s noti on of gl obal Ford
i sm al so has an i nsti tuti onal bent, i ts focus on the probl em of under
consumpti on and on a narrow concepti on of the rel ati ve autonomy of
the State di sti ngui shes i t from Amsden' s argument.
Amsden argues that whi l e the Fi rst I ndustri al Revol uti on was based
on i nventi on of new products and the i ndi vi dual entrepreneur, the
Second was based on i nnovati ons that commerci al i zed processes and
products for mass markets. I n the l ate 20th century, i n countri es wi th
no new products or technol ogi es, borrowi ng and l earni ng became
cruci al . I n Korea, expl i ci t State pol i cy took the form of subsi di es to
busi ness ( i nputs and government i nvestment to promote technol ogi cal
and economi c l i nkages, forei gn currency l oans, etc. ), whereas the
pol i ci es behi nd the Fi rst and Second I ndustri al Revol uti ons were lais
sez-faire and i nfant i ndustry protecti on respecti vel y. Nei ther of these
pol i ci es woul d have promoted l earni ng to the extent that the Korean
pol i ci es have done.
In emphasi zi ng the rol e of subsi di es, Amsden al so di rectl y chal
l enges neo-cl assi cal economi sts [for exampl e, Lal ( 1 984) ] , who assert
that economi c devel opment wi l l automati cal l y come from "getti ng the
pri ces ri ght. " I n exchange for subsi di es to busi ness, the Korean gov
ernment extracted certai n performance standards, pri mari l y in terms
of expors. The strategy has not l ed to dependence because i t i nvol ved
more than expl oi ti ng an earl y comparative advantage in cheap l abor.
I nstead of bei ng bogged down by "peri pheral Fordi sm, " Korean fi rms
have rapi dl y ascended the technol ogi cal l adder. They have done so
by usi ng a growi ng proporti on of ski l l ed l abor suppl i ed by an excel
l ent hi gher educati on system, and by constantl y trai ni ng producti on
workers and i nvol vi ng them i n shop-floor probl em sol vi ng.
Whi l e i ntol erance for l abor di ssent i n Korea mi ght l ead one to
j ump to Li pi etz' s concl usi ons, l abor control in itsel f proves an i nade
quate expl anati on for Korea' s economi c success. Labor co ntrol was
practi ced al ong wi th ri si ng l abor producti vity-si mul taneous absol ute
and rel ati ve surpl us extracti on. But even in a context of repressi ve l a
bor l aws and ri si ng wages, whi ch reflected the producti vi ty gai ns, di s
sent was hardl y unknown ( Cho 1 985) . Though never offi ci al l y ac
knowl edged, the number of stri kes steadi l y rose through the 1 970s.
The State was cerai nl y authori tari an and repressi ve, but the State' s
developmental rol eharnessi ng resources for hi gher producti vity and
1 1 5
Berkeley Planning Journal
for export success through l ocal fi rms (and not MNCsl-was the cru
ci al var i abl e i n expl ai ni ng economi c growth.
In sum, Frobel et a/. and li pi etz have merel y reproduced the l ogi c
of dependency theory, al ong wi th its fl aws, as they theori zed new re
al i ti es in the worl d economy. Fi rst, they present a stati c pi cture of the
NI DL, i gnori ng countri es l i ke Korea that have rapi dl y ascended the
technol ogi cal l adder. Second, they have been too pessi mi sti c about
the abi l i ty of the Thi rd Worl d to take the i ni ti ati ve to change i ts posi
ti on wi thi n the NI DL. They ti e aci on taken i n the Thi rd Worl d to ac
ti ons in the core, and the onl y Thi rd World actors they menti on are
States and el i tes. NI DL theori sts i gnore other el ements wi thi n Thi rd
Worl d soci eti es and deny thei r capaci ty ei ther to act or to resi st the
expl oi tati on to whi ch they are subject. They cont i nue to vi ew Thi rd
Worl d workers as no more than sources of cheap l abor to meet the
demands of capi tal . Further, no di sti ncti on has been made among
di fferent Thi rd Worl d soci eti es and States, and consquentl y l i ttl e
thought has been gi ven t o how such di ferences mi ght l ead t o di ver
gent devel opment outcomes.
A Discussion
I f the NI DL i s a contemporary real ity, what al ternati ves are there to
the expl anati ons di scussed in the previ ous secti on? Whi l e the cri
ti ques of the NI DL theori es above certai nl y provi de l eads, thi s con
cl udi ng secti on of the essay wi l l show how an hi stori cal -structural ap
proach (Cardoso and Fal etto 1 979) offers an effecti ve means for
studyi ng the NI DL. Thi s secti on argues for such an approach and dis
cusses its i mpl i cati ons for devel opment pol i cy.
The emergence of an NI DL i n the postwar era has been accompa
ni ed by rapid technol ogi cal change, parti cul arl y in mi cro-electroni cs
and i nformati on processi ng. As the abi l ity to harness such technol o
gi es i ncreasi ngl y determi nes l evel s of producti vi ty and economi c de
vel opment, technol ogy has become a key structural determi nant of
economi c growth. I ndeed, the gap between regi onal economi es that
have access to new technol ogi es and those that do not i s l eadi ng to
what Castel l s and laserna ( 1 989) term as the "new dependency. " Un
der these condi ti ons, regi onal economi es whose pol i ci es are based
sol el y on suppl yi ng unski l l ed, l ow-wage l abor and i ndustri al i nfra
structure face the danger of bei ng bypassed, as the technol ogi cal basi s
of manufacturi ng changes. Whi l e such a pol i cy mi ght wel l be used to
gai n an i ni ti al foothol d in the worl d economy, i ts sustai ned appl i ca
ti on wi l l most l i kel y ensure bei ng trapped in the l ow val ue-added
ni ches of the NI DL (Castel l s 1 989b).
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Marxist Theories of Development, Parthasarathy
Access to technol ogy can take two routes. One opti on is to gener
ate new technol ogi es, though this can be expensi ve and ri sky. For i n
stance, as Sri dharan ( 1 989) poi nts out, whi l e the I ndi an State has i n
vested heavi l y i n research and i n trai ni ng s ki l l ed researchers i n
el ectroni cs, most of the research has fi zzl ed out. Resources were
spread t hi nl y over many ambi ti ous projects and the government fai l ed
to i nsi st on commerci al i zati on. In the absence of major technol ogi cal
breakthroughs, the other opti on, as the case of Korea shows, i s to ab
sorb and adapt technol ogy for hi gher producti vi ty and growth. Thi s
l atter opti on seems t o be t he more vi abl e one for regi ons or countri es
faci ng a huge technol ogi cal barri er. However, autarki c economi c
pol i ci es of sel f-contai nment, practi ced t o varyi ng degrees by both so
ci al i st and non-soci al i st Thi rd Worl d countri es, hi nder exposure to
and absorpti on of rapi dl y changi ng technol ogi es.
I ndeed, one coul d argue that al ong wi th the col l apse of the Second
World, the rel ati ve fai l ure of autarki c model s of deve l opment has
pl ayed no smal l rol e i n di mi ni shi ng the rel evance of Marxi st anal ysi s.
Autarki c pol i ci es resul ted i n part from the anal ysi s offered by Fi rst
Worl d devel opment economi sts of the features perpetuat i ng eco
nomi c backwardness.
5
Such pol i ci es were al so i nfl uenced by the So
viet model of i ndustr i al i zati on and by dependency theori sts who ar
gued that i sol ati on was the onl y way to overcome underdevel opment.
I ndi a, for i nstance, adopted pol i ci es based on Mahal anobi s' Sovi et
styl e economi c model under Pri me Mi ni ster J awaharl al Nehru, who
admi red the U. S. S. R. ' s success with rapi d i ndustr i al i zati on through
central pl anni ng ( Chakravarty 1 987) . But I ndi a' s pol i ci es yi el ded a
sl uggi sh economi c performance; the l ack of technol ogi cal dynami sm
i n a hi ghl y protected economy was an i mportant factor. As Wal ker
and Storper ( 1 989) argue, a cruci al i nadequacy of Marxi st anal ysi s has
been i ts general tendency to underesti mate the rol e of technol ogi cal
change i n sustai ni ng capi tal i sm by creati ng new products and mar
kets, as opposed to thei r mere quanti tative expansi on. I roni cal l y, Marx
hi msel f bel i eved that capi tal i s m woul d survi ve onl y by constantl y
revol uti oni zi ng the means of producti on. As technology changes rap
i dl y, pl anni ng wi th stati c i nput-output model s becomes meani ngl ess.
Though autarki c pol i ci es are not conduci ve to technol ogi cal
change, hi story al so suggests t hat t he absorpti on and adaptati on of
technol ogy wi l l not happen wi thout coordi nated effort. Whether i n
l ate 1 9th century Germany (Gerschenkron 1 962) , i n 20th century J a
pan (Johnson 1 982) , or i n l ate 20th century Korea (Amsden 1 990), the
State has pl ayed an i mportant devel opmental rol e. Expl i ci t i nterven
ti on becomes necessary si nce an open economy l i nked to the NI DL
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Berkeley Planning Journal
does not automati cal l y guarantee that the owners of sophi sti cated
technol ogy wi l l part with it. Castel l s ( 1 989b) argues that Thi rd Worl d
States coul d bargai n wi th MNCs, provi di ng them market access onl y
i n exchange for technology. Though capi tal may be i ncreasi ngl y mo
bi l e, it remai ns dependent on markets for i ts reproducti on. Si mi l arl y,
i n the absence of i nterventi on, there i s no guarantee that access to ad
vanced technol ogy wi l l necessar i l y l ead to i ts bei ng absorbed and
used as a means of furtheri ng technol ogi cal capabi l i ty. Thi s is cl ear
from the very di fferent i mpacts of i mpori ng and l i censi ng of el ec
troni cs i n I ndi a and Korea ( Sri dharan 1 989) . I n the protected I ndi an
market, access to new technology became l i ttl e more than a source of
rent. In Korea, on the other hand, the subsequent research efforts of
the chaebols were cruci al in maki ng Korea a l eadi ng exporter of
products rangi ng from consumer el ectroni cs to dynami c random ac
cess memory chi ps. The Korean State pl ayed a central rol e in thi s suc
cess by brokeri ng technol ogy and capital i n exchange for expor per
formance.
Why are not al l States successful i n the rol e of devel opi ng a tech
nol ogi cal base for sustai ned i mprovement of a regi on' s posi ti on in the
NI DL? Thi s question i s pari cul arl y relevant in l i ght of the very di ffer
ent devel opment paths that Thi rd Worl d countri es have taken. The
term "Thi rd Worl d" ori gi nal l y appl ied to a l arge and di verse group of
rel ati vel y poor countri es that had been formerl y col oni zed by Fi rst
Worl d nati ons. The extreme contrast in the 1 990s between the hunger
and poverty of Sub-Saharan Afri ca and the export- led prosperi ty of the
East Asi an NI Cs, however, suggests that Thi rd World countri es need
not fol l ow s i mi l ar hi stori cal trajectori es wi thi n capi tal i sm, as Marx
bel i eved they woul d. Nor does devel opment i n the core have to come
at the expense of the peri phery, as suggested by dependency theory.
I n other words, al l opti ons are not structural l y bound. There is room
for agency and maneuveri ng in economi c devel opment, the parame
ters of whi ch wi l l depend on how structural condi ti ons i nteract with
the speci fi c hi stori cal condi ti ons of a soci ety and its State.
In an attempt to speci fy the characteri sti cs of a State that wi l l pl ay
a devel opmental rol e, Evans (forthcomi ng) argues that "embedded
autonomy" i s essent i al . Evans defi nes embedded autonomy as a con
tradi ctory combi nati on of a corporate coherence wi thi n the State that
al l ows it to formul ate a developmental project, and a set of ti es to so
ci al groups that al l ows i t to negot i ate and i mpl ement that project.
Evans suggests that di fferent States have varyi ng degrees of embedded
autonomy. Those l acki ng i t compl etely he cal l s "predatory States." i n
di rect contrast t o "devel opmental States. " As i nstances of t he l atter,
1 1 8
Marxist Theories of Development, Parthasarathy
Evans poi nts to J apan, South Korea and Tai wan: powerful bureaucra
ci es wi th a tradi ti on of meri tocracy that are neverthel ess ti ed to pr i
vate capi tal through a vari ety of formal and i nformal networks, al
l owi ng executi on of a devel opmental project.
The Mi ni stry of Trade and I ndustry ( MI TI ) , for i nstance, is credi ted
wi th coordi nati ng J apan' s r i se as a worl d i ndustri al power (J ohnson
1 982) . MI TI was a powerful organi zati on control l i ng i nvestment l oans
and access to forei gn technol ogy and currency that pri vate capi tal
sought. I t was al so presti gi ous, attracti ng tal ented graduates from the
best uni versi ti es through a tough ci vi l servi ce exam. These aspects
gave MITI i ts autonomy and corporate coherence, however, i t was
al so cl osel y l i nked to pri vate capi tal . MI TI and representati ves of
busi ness and fi nance met on j oi nt pol i cy formul ati on organi zati ons
and, on reti rement, MI TI ' s staff went to work wi th the corporati ons
they had previ ousl y regul ated.
The underl yi ng premi se of the embedded autonomy concept i s
that successful economi c transformati on i s most l i kel y when carri ed
out in partnershi p between States and thei r soci eti es. Consequentl y, a
State that is autonomous wi thout bei ng embedded, in the sense of
bei ng di sconnected from ci vi l soci ety, wi l l not have the soci al back
i ng needed to l egi ti mi ze a project. I t now becomes easy to appreci ate
the l i mi ts of the di ctatori al State that Li pi etz sees as vi tal to repress l a
bor i n order to i ncorporate a soci ety i nto the NI DL. I n any event,
autonomy does not guarantee corporate coherence. Evans poi nts to
the Mobuto regi me i n Zai re, whi ch he sees as the predatory arche
type, to show how an autonomous State can al so take the form of a
mere group of i ndi vi dual s pursui ng thei r own agendas.
I f autonomy wi thout embeddedness i s i ns uffi ci ent, so i s em
beddedness wi th i nsuffi ci ent autonomy. I n the l atter case, the State
may be unabl e to formul ate a coherent devel opmental project. Even if
i t di d, i t may lack the capaci ty to i mpl ement the project. Rudol ph and
Rudol ph ( 1 987) , for i nstance, poi nt out that though the I ndi an State
has demonstrated a capaci ty to formul ate devel opmental pol i ci es, i t
has become capti ve over the years to "demand pol i ti cs. " As a resul t, i t
merel y reacts to the demands forced on i t by di verse soci al groups,
unabl e to sustai n the pursui t of a project.
Whi l e embedded autonomy is a val uabl e anal yti cal concept, as
Evans hi msel f defi nes i t, i t i s a contradi ctory conj uncture i n State
soci ety rel ati ons, suggesti ng that i t need not be a stabl e confi gurati on.
Thi s consi derati on rai ses a questi ons requi r i ng furher i nvesti gati on.
Fi rst, under what condi ti ons does embedded autonomy come about?
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Berkeley Planning Journal
Second, how does thi s characteri sti c change over ti me? In answeri ng
these questi ons, an hi stori cal approach i s cruci al .
As far as t he fi rst questi on i s concerned, one needs t o spedfy the
condi ti ons under whi ch the State i s abl e to l egi ti mi ze a parti cul ar
project by bui l di ng t i es wi th speci fi c groups wi thout chal l enges from
others. Si mi l arl y, in the case of the second questi on, the i ssue i s how
the role of the State changes wi th i ncorporati on i nto the NI DL . One
possi bi l i ty, as Evans suggests, i s that the relevance of a State's devel
opmental rol e may di mi ni sh once i t s soci ety i s fi rml y enmeshed i nto
the technol ogi cal hi gh-nd of the Nl DL. But there are al so other as
pects to ponder.
In bui l di ng a competitive economy, developmental States not onl y
create the condi ti ons of accumul ati on but al so determi ne how surpl us
i s i nvested. I f i ncorporati on i nto the NI DL occurs because of an al l i
ance between the State and speci fi c soci al groups, what rol es have
other groups pl ayed i n determi ni ng the outcome, and how has the
State l egi ti mi zed i ts acti ons i n thei r eyes? Such questi ons seem par
ti cul arl y relevant as the technol ogi cal basi s of economi c acti vi ty in a
soci ety changes, as Castel l s ( 1 989a) argues of the ri se of the duaki ty
in the U. S. A.
The dual -ci ty i s a speci fi c soci o-spati al phenomenon that has re
sul ted from the soci o-economi c restructuri ng accompanyi ng the i n
venti on of new i nformati on technol ogy. The new technol ogi es gener
ate thei r share of low-ski l l manufacturi ng and servi ce jobs al ong wi th
the hi gh ski l l jobs. A pol ari zati on of ski l l requi rements has l ed to the
segmentati on of l abor markets, wi th the pol i ti cal l y and economi cal l y
vul nerabl e, and ethni cal l y fragmented, i mmi grants and mi nori ti es
domi nati ng l ow-wage jobs. I n the broader context of a shr i nki ng
Keynesi an wel fare State and the growi ng asserti on of capi tal over la
bor, the prospects for upward mobi l i ty across segments are gl oomy;
groups wi th wi del y di fferi ng i ncomes have become more spati al l y
segregated, rei nforci ng pol ari zati on by provi di ng di ferenti al access to
opportuni ti es for ski l l enhancement. Such di spari ti es produce a di fe
enti al i ncorporati on of soci al groups i nto the worl d economy. Whi l e
Castel l s draws hi s empi ri cal materi al from the U. S. A. , one can al so
rai se the possi bi l i ty of an i roni c i nternal i zi ng of the "new depend
ency" i n Thi rd World countries as they move up the NI DL.
To avoi d suggesti ng that events i n the U. S. A. foretel l what i s to
happen el sewhere, requi res a cl ose study of how soci al struggles over
the control of resources determi ne pol i ti cal and economi c outcomes
in other soci eti es. Struggl es may take pl ace on the basi s of more than
1 20
Marxist Theories of Development, Parthasarathy
the economi c or cl ass i denti ti es suggested by Marx, but al so gender,
rel i gi on or race. For i nstance, Cho ( 1 985) poi nts out that young, un
marri ed femal e facory workers, whose doci l i ty was taken for granted
in a patr i arhal soci ety, acti vel y part i ci pated in the Korean l abor
movement. They became aware of thei r cl ass posi ti on and gender
subordi nati on i n the boardi ng houses they shared cl ose to thei r facto
ri es. Unl i ke marri ed women, these women were away from t hei r
fami l i es i n t he countrysi de and had spare t i me after work t o exchange
notes about worki ng condi ti ons, i nformati on about stri kes i n other
pl ants and the reasons behi nd the success or fai l ure of such stri kes.
These women expl oi ted the shortages of femal e l abor, to contest l abor
control , far more than mal es i n supervi sory or techni cal pos i t i ons.
Cho contrasts t he consci ousness of these women wi t h the compl ete
control exerci sed over femal e i mmi grant l abor in a J apanese el e
troni cs assembl y pl ant i n Cal i forni a. Under these ci rcumstances, Cho
argues that l ocati ng i n Korea becomes a much l ess atractive opti on to
capi tal . Such unforeseen chal l enges to surpl us extracti on and l egi ti
macy make di fferent demands on the capaci ti es of State to respond,
potent i al l y al ter i ng the structural constrai nts of devel opment i n par
ti cul ar countri es and regi ons, and affecti ng subsequent posi ti on i n the
i nternati onal di vi si on of l abor.
ACKNOWLEDGEMENTS
The author would like to thank Ted Egan, Melanie Feakins
and Rolf Penda/1 for helpful and insightful comments on
earlier drafs of this essay. While they deserve credit for
improving the essay, the author remains solely responsible
for any flaws or errors that remain.
NOTES
1 Gi ven the focus on the NI DL, the term development i n thi s essay wi l l refer to capi tal
i st i ndustri al development.
2
At this pi nt, i t must b emphasi zed that the purpse of this essay i s not to provide an
exhausti ve or even an extensive survey of the l i terature on Marxi st theori es of devel
opment; nor i s t he i ntent here t o debate broader questions prtai ni ng t o hi stori cal mate
ri al i sm.
3
To the Regul ati on School , whi ch has a di sti nct Marxi st l i neage, capi tal i sm goes
through di ferent phases of regul ati on. Each phase i s characteri zed by a regi me of ac
cumul ati on or a pattern of economi c activi ty and a mode of regul ati on or a set of i nsti
tuti ons governi ng the regi me of accumul ati on. The post Wor l d War I I economi c pros
1 21
Berkeley Planning Journal
perity in advanced i ndustri al regions i s attributed to Fordi sm. Fordi sm was characer
i zed by mass prouction with verical l y i ntegrated firms catering to mass markets. Mass
markets were created as capi tal and labor (unions) reached a pact where capital was
gi ven control of the work process to ensure steady produci vi ty gai ns. In return, l abr
was guaranteed wage increases whi ch, i n turn, sustai ned the demand fr mass markets.
The l abor process was itself di vided btween ski l l e workers in charge of conception
and unski l led workers on the production l i nes wi th wel l defined tasks. The Keynesi an
welfare State al so pl ayed a key role-it mediated btwen capi tal and labr, provided
appropriate macrconomic pl i ci es to mai ntai n the bal ance btwen proucti vi ty
and wages and suppl i e i nputs such as educati on and heal th to ensure sustai ned pr
ducti vi ty i ncreases. Whi l e this brief description gi ves some of the key ideas of the
Regul ati oni sts, there are many schols of Regulation. For a descri ption of the different
schools, se Jessop ( 1 990).
4 These two routes must b sen as ideal typs, with a host of i ntermediate pssi bi l i ti es.
5 Two paricul arl y key features were, ( i ) the l i mits to capital accumulation due to a low
propnsi ty to save and ( i i ) the avai l abi l ity of unl i mited suppl i es of labr that could b
more productivel y empl oyed in i ndustry rather than agricul ture. These features, al ong
wi th the arguments that market sol uti ons would only lead to uneven spati al and sec
toral development, were used to j ustify some forms of state interention (for detai l s, se
Hi rschman 1 981 ) .
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