1060844

research-article2021
LAPXXX10.1177/0094582X211060844Latin American PerspectivesPaulani / DEPENDENCY 4.0 IN BRAZIL

Dependency 4.0
Theoretical Considerations and the Brazilian Case
by
Leda Maria Paulani
Translated by
Heather Hayes

The liberalization of markets for goods and assets that took place beginning in the
1980s, alongside a strengthening of the resulting transnationalization of capital, did
not alter the basic hierarchical organization of the global capitalist system. This new
dependency, here called “dependency 4.0,” is based on the rent seeking that marks the
contemporary wealth accumulation process and ongoing technological progress.
Brazil’s incorporation into the international division of labor is emblematic of this type
of subordination.

A liberalização dos mercados de bens e ativos que teve lugar a partir dos anos 1980 e o
fortalecimento da transnacionalização do capital que resultou daí não alteraram o pressu-
posto fundamental da prevalência de uma organização hierárquica no sistema capitalista
mundial. Um novo tipo de dependência a relacionar países centrais e periféricos, dependên-
cia 4.0, estaria assentada no rentismo que marca hoje o processo de acumulação e na
natureza do progresso tecnológico em curso. O caso do Brasil—a história de sua inserção
na divisão internacional do trabalho—é emblemática desse novo tipo de subordinação.

Keywords: Dependency theory, Capital accumulation, Rentierism, Knowledge com-

modities, Brazilian economy

Dependency theory emerged in Latin America in the 1960s. There is no con-

sensus about its necessarily being a theory,1 since it involves writers not only
with different backgrounds and positions on many topics but also with differ-
ent theoretical orientations, although with a clear predominance of Marxism.2
According to Fiori (1995: 215), all versions of the dependency school “refer, in
one way or another, to the confluence of the Marxist theory of imperialism, in
particular its post-Leninist version, with the Economic Commission for Latin
America and the Caribbean (ECLAC) critique of the neoclassical theory of
international trade.”

Leda Maria Paulani is a senior professor in the Department of Economics at the Universidade de
São Paulo and in the postgraduate program in economics of the university’s Instituto da Pesquisas
Econômicas. This article is part of a research project supported by a research productivity grant
from Brazil’s Conselho Nacional de Desenvolvimento Científico e Tecnológico (National Council
for Scientific and Technological Development). The author thanks Dario Rodrigues da Silva for
his help with preparing the data and the figure. Heather Hayes is a translator in Quito, Ecuador.

LATIN AMERICAN PERSPECTIVES, Issue 243, Vol. 49 No. 2, March 2022, 24–38
DOI: 10.1177/0094582X211060844
https://doi.org/10.1177/0094582X211060844
© 2021 Latin American Perspectives

24
 Paulani / DEPENDENCY 4.0 IN BRAZIL   25

This observation by Fiori circumscribing the problem of dependency is

very appropriate here for two reasons. First, the transformations of the capi-
talist system since the early 1980s, in particular those arising from the broad
liberalization of the markets of goods and assets, with the consequent reduc-
tion of freedom for nation-states (especially those that lack strong currencies)
have not changed the fundamental hierarchical organization of the global
capitalist system. The trend toward transnationalization in the logic of capi-
tal, which has been strengthened enormously over the past four decades
under neoliberal practices, despite having increased the interdependence of
national economies has not produced a scenario in which nations are united
by the same global capitalist interests. The impetus for hegemonic disputes
and rivalries between nations has remained. There continues to be a core that
is the home territory of the parent companies of major world conglomerates
and mainly the territory from which technological progress emanates and a
periphery, which suffers more than benefits from the concentration and cen-
tralization of capital orchestrated by the core. Thus imperialism, the classic
problem behind the Marxist approach, remains, albeit under new guises.
The second reason for taking Fiori’s observation as a starting point is related
to the second element that appears there, juxtaposed to the theme of imperial-
ism—ECLAC’s critique of the neoclassical theory of international trade. The
assumption here is that the advantages derived from the position of states of
the core must assume, in addition to the aspect of geopolitical domination that
is inherent to them, also a material aspect objectified in the value transfers that,
in several forms, will boost capital accumulation in the central economies. In
the classic ECLAC analysis, which comes from Prebisch, this transfer occurs
through exchange relations that are always unfavorable to peripheral nations
because of the limited technological dynamic of their production, based on
primary goods, and their inability to retain the meager productivity gains in
their own territories. The criticism of neoclassical theory involved deconstruct-
ing the premise of comparative advantage, which is the theoretical backbone of
the situation that generated such losses, and as a result also defended industri-
alization in the periphery as a remedy for underdevelopment. After nearly
three-quarters of a century of this theoretical dispute, with the transformations
that have occurred worldwide in the capitalist system and the fact that coun-
tries like Brazil have industrialized and then deindustrialized, it is clear that
changes have happened in the same way as material gains in the core countries.
That said, the analysis that is undertaken here on the issue of dependency
will focus mainly on the value transfer from peripheral countries to core coun-
tries. In other words, assuming that there are core and peripheral countries and
considering that the capitalist development of the periphery is subordinate to
and dependent on that of the core, my analysis will deal with the price that
peripheral countries pay to play their subordinate role. Other important aspects
of the dependency relationship—political issues and their interrelationship to
the issue of social classes in the dialectic of internal/external interests—will be
addressed only in passing.
I will begin with a few brief theoretical considerations about the basic fea-
tures of the contemporary accumulation of capital, to which dependency today
is directly related. Next, I will turn to what I call “dependency 4.0,” discussing
26   LATIN AMERICAN PERSPECTIVES

the different forms of dependency (understood in its aspect of producing mate-

rial advantages for core countries) that may connect central and peripheral coun-
tries. Then I will address the historical forms in which the Brazilian economy has
participated in the global system, associating this with dependency. To close, I
will provide empirical evidence of the new type of subordination and offer
some final considerations.

Contemporary Capitalism, Rentierism, and Imperialism

One of the most studied aspects of the accumulation process today is finan-
cialization. Mainly analyzed by Marxists, regulationists, and post-Keynesians,
financialization refers to the predominance of financial accumulation over pro-
ductive accumulation. There is much controversy about its meaning and its
importance. The French economist François Chesnais, one of the first Marxists
to study the phenomenon, provided a definition that is useful for us because it
reinforces the hypothesis of the prevalence of relations of domination and,
therefore, of imperialism in the current architecture of the system. According to
Chesnais (2016: 15–16), financialization “refers to the pervasiveness of features
of interest-bearing capital identified by Marx in Part 5 of Volume 3 of Capital.
They must be taken in combination with the implications of today`s very high
degree of centralization/concentration of capital.” For him, the accelerated for-
mation of large blocks of capital through the centralization process that pre-
dominates in periods of crisis like the one currently under way occurs in
parallel with the enormous increase in the size of financial markets and the use
of sophisticated financial instruments such as private equity funds and their
leveraged-buy-out operations.3 Even before the great crisis of 2008, Chesnais
(2007: 121) had defined imperialism by directly associating it with intense cen-
tralization of capital (which increased after the crisis):4 “Present-day imperial-
ism is strongly related to the domination of a precise form of capital, namely,
the highly concentrated interest-and-dividend-bearing money-capital that
operates in financial markets.”
I agree with Chesnais with regard to both the definition of financialization
(as directly associated with the spread of interest-bearing capital and the for-
mation of giant blocks of capital) and the interpretation of contemporary
imperialism (as the dominance of “highly concentrated interest-and dividend-
bearing money-capital”). For me, however, financialization is only the most
evident expression of an accumulation process that has become rentier, the
latter term being understood as the predominance of earnings deriving from
the ownership of capital (interest, absolute income, differential income, monop-
oly income, and dividends) on earnings that are derived from operating capital
(profit and superprofit) (see Paulani, 2016). While for the former the income
stream exists as rights and is derived from the mere ownership of assets (mon-
etary capital, land, shares), for the latter income is a result of the accumulation
of surplus value produced by the operation of capital. It is not by chance that
in his Theories of Surplus Value, referring to interest-bearing capital, Marx calls
the owner of monetary capital a “legal capitalist” and the one who runs
 Paulani / DEPENDENCY 4.0 IN BRAZIL   27

production an “economic capitalist,” and history is unchanged if these two

characters are played by the same person.
Profit, interest, and ground rent are the forms, presented by Marx in Volume
3 of Capital, through which the surplus value resulting from the appropriation
of unpaid labor appears. Rentierism, therefore, has always been associated
with capitalism, even being seen by political economy from its origin (Marx
included) as an obstacle to accumulation. So, what is new about the current
stage? Today’s new feature, which serves only to deepen systemic contradic-
tions, is the combination of elements that make the income derived from prop-
erty ownership more important than that derived from accumulation. In
addition to the omnipresence of interest-bearing capital, there is also a modern
type of absolute rent that is becoming increasingly important—knowledge
rent, which comes from knowledge commodities, and monopoly rent, arising
from the growing importance of brands.
In Volume 3, Chapter 24, of Capital, Marx (1991 [1895]: 522) says that “the
value of commodities is determined not by the labour-time originally taken by
their production, but by the labour-time that their reproduction takes.” As a
result, commodities that do not require labor time for their reproduction, such
as software, should have a zero price, since they have no value. However, like
landowners, the owners of this knowledge do not release it for production if an
income is not paid to them. The price of this commodity is therefore constituted
by this modern type of absolute rent, the rent of knowledge.5
With regard to monopoly rent, in Chapter 45 of the same volume of Capital,
Marx (1991 [1895]: 898) goes on to say that differential rent and absolute rent
are the only normal forms of rent and that “apart from this, rent can only derive
from a genuine monopoly price, which is not determined by the price of the
production of the commodities nor by their value, but rather by the demand of
the purchasers and their ability to pay.” And for him (as for Ricardo), only very
special commodities not reproducible by human labor could have a monopoly
price and generate a monopoly rent (for example, rare coins, works of art, etc.).
What brands do is transform the prices of production of common commodities
into monopoly prices. When a brand is successful, it makes its product some-
thing unique and transforms its producer into a monopolist, who then appro-
priates this rent.6 Thus rent seeking acutely marks the contemporary process of
accumulation and alters the means and results of the dependency relationship.

New Dependency, Brand-New Dependency, and

Dependency 4.0

Since its origin, the term “dependency” has appeared accompanied by qual-
ifiers. In their classic 1969 book, Fernando Henrique Cardoso and Enzo Faletto
addressed “a new type of dependency” that operated “on a more complex
level” (Cardoso and Faletto, 1977 [1969]: 129) in reference to the internationali-
zation of national markets resulting from the foreign direct investment by large
European and American multinational companies that fostered the industri-
alization of Brazil and other Latin American countries in the 1950s and 1960s.
Celso Furtado also titled his 1982 book A nova dependência: Dívida externa
28   LATIN AMERICAN PERSPECTIVES

e monetarismo, to refer to the transnationalization not only of various productive

sectors but of the financial sector and its consequences for peripheral nations
like Brazil (Furtado, 1982: 121–128). In his 1995 book, José Luís Fiori spoke of a
“brand-new dependency.” With globalization already having matured, he
called attention to two factors: the even more restricted access of peripheral
nations to knowledge and cutting-edge technologies than at the time of inter-
nationalization of domestic markets and the constraints that global competi-
tion for investment imposes on peripheral nations to guide their macroeconomic
management toward increasingly homogeneous and immutable standards.
Let us then place these names on a continuum and follow the clues already
left by thinkers who are characters in the intellectual history of the dependency.
Thus, at first, there would be the original dependency, that of ECLAC, derived
from the primary-export position of peripheral countries. The benefits of accu-
mulation by core countries at this stage stemmed from exchange relations and
the deterioration of the terms of trade resulting from them, which made it pos-
sible to transfer to these countries part of the value that should have remained
in the periphery. The new dependency appeared at two different moments in
time, used by Cardoso and Faletto (1977 [1969]) in reference to the internation-
alization of domestic markets and by Furtado (1982) in reference to the accu-
mulation of foreign debt. In new dependency 1, the profit earned through
accumulation by core nations was derived from the guarantee of extra markets
for their multinational companies that had been made possible by internation-
alization. In times of overaccumulation crisis,7 when markets in core countries
were beginning to dwindle, exchanging the mere possibility of foreign sales for
guaranteed domestic sales was good business. As a result, a not negligible por-
tion of domestically generated value began to flow to the home-office nations
of industrial businesses as remuneration for the capital employed in produc-
tion, which was, after all, owned by nonresidents. This is how we move from
trade relations to relations that involve remuneration of factors of production
as instruments for transferring value from peripheral countries to core ones.8
New dependency 2 is also associated with the remuneration of factors of pro-
duction, but instead of remuneration of productive capital (capital that pro-
duces surplus value) we are now faced with remuneration of the ownership of
monetary capital. Therefore, there is the transfer abroad of a portion of the
domestically generated value to remunerate the owners of money capital. The
rent-seeking character of these transfers is already evident there, but it became
even clearer, bordering on dispossession pure and simple, with the 1979 inter-
est rate shock, promoted by the United States to curb speculation surrounding
the weakening of American hegemony and the displacement of the U.S. cur-
rency from its role as the world’s money (concerning this last point see Gowan,
2003). On the other hand, the assumption of huge debts by peripheral coun-
tries, especially those of Latin America, did a great favor to a financial wealth
that was accumulating in the world’s financial markets, eager for valorization.
Finally, it is worth remembering that the need to return a portion of the domes-
tically generated value resulting from new dependency 1 to international cir-
culation was one of the reasons that pushed the peripheral countries, especially
those that had been the destination of numerous multinationals, to take the
huge loans that were necessary after the first oil shock in 1973.
 Paulani / DEPENDENCY 4.0 IN BRAZIL   29

What Fiori (1995) called brand-new dependency is associated with globaliza-

tion, the latter understood as a “new capitalist format.” The interdependence
between actors is increased and the structure of supply, technological progress,
and decision making are concentrated. At the same time, markets, especially
financial markets, are deregulated and the structure of production increasingly
segmented. The result, then, for peripheral countries is that access to technol-
ogy is restricted, since “its flexible and segmented use corresponds to concen-
trated control” (Fiori, 1995: 224). Furthermore, the global competition for
investment (and for subordinated access to new technologies) pushes periph-
eral economies toward “healthy” macroeconomic management, in which
peripheral states lose space to carry out public investments and to finance
social policies of a universal nature. This makes the centuries-old issue of pov-
erty/inequality even worse, resulting in growing portions of the peripheral
populations’ losing any possibility of becoming “globalized” (225–226).
I fully agree with Fiori’s analysis, but from the point of view of this article
it is necessary to specify how this whole new capitalist framework, which
concentrates decisions “in a set of three to five governments added to a num-
ber not exceeding 200 companies” (Fiori, 1995: 223), results in material advan-
tages for core countries. To facilitate the investigation of these transmission
channels, it is important to remember that for Fiori the central elements of this
brand-new dependency are the nature of technological progress and the coer-
cion imposed on peripheral economies to implement a macroeconomic policy
that follows the principles and maxims defined in the decision-making centers
of advanced countries.
It is departing from these central elements noted by Fiori that I propose to
rename this brand-new dependency—the dependency produced by globaliza-
tion, which he distinguishes from that associated with the internationalization
of internal markets (which still allowed peripheral countries to fully internalize
production techniques and methods of production derived from the techno-
logical advances produced by the core)—dependency 4.0. The first reason to pro-
pose the change is that, starting from Fiori’s correct view (actually premonitory,
since the text was written 25 years ago), the differentiator “4.0” calls attention
to the updating of the important issue of technological progress. It has become
common to talk about “industry 4.0” in reference to the step beyond what has
been called the “third industrial revolution,” based on information and com-
munication technologies. Given how sweeping this progress has been, it has
come to be seen as a fourth revolution.9 The consequences of this great trans-
formation have reinforced traits that Fiori had noticed even before the 4.0
developments came to light: increased concentration on decision-making pro-
cesses, the development of technical progress, and the scale of capital itself; an
increasingly segmented production structure; and, one might add, the univer-
sal spread of typical 4.0 products that have become indispensable inputs for
practically any type of production.
Based on the Internet of things, artificial intelligence, cloud computing, and
robotics, this fourth revolution has as indisputable protagonists knowledge
commodities. These, as a general rule, are produced by corporate giants, whose
operation is entirely facilitated by unregulated markets and equally unregu-
lated finance. This characteristic of technological progress seems to confirm my
30   LATIN AMERICAN PERSPECTIVES

hypotheses about the rentier nature of the contemporary process of accumula-

tion, and this is a second reason for my proposing the new term. Associating
the rentier nature of contemporary capitalism with brand-new dependency
will not only make it possible to provide it with the transmission channels that
allow for material gains by the countries positioned in the core but also show
what such channels have to do with the second of the elements that Fiori points
out as fundamental—the constraint that the global competition for investments
imposes on peripheral countries in managing macroeconomic policy (the first
element, just to remember, is the greater difficulty in accessing technology for
peripheral countries).
When we depart from the original dependency and look to the new depen-
dency 1 and the new dependency 2, what we find is a movement that comes
out of trade relations and moves into relations that involve payment to factors
of production and, at a second moment but as part of this same type of pay-
ment, into typically rentier relations, since the value now being transferred is
not remuneration of productive capital that operates and produces profit (sur-
plus value) but simply payment to the owners of monetary capital. In moving
from new dependency 2 to dependency 4.0 we add to this type of transfer (the
payment of debt service in the form of interest) other types of payment of a
rentier nature—payments resulting from other financial investments, espe-
cially portfolio investments, produced in abundance by financial liberaliza-
tion, such as shares, debentures, public and private debt securities (securities
that, let us not forget, Marx called “fictitious capital”). Finally, trade relations
are once again important elements of value transfer to core countries but for
reasons that go beyond the question of terms of trade to involve the rentier
nature of the current accumulation process. This is the payment of knowledge
commodities, which is typically a payment of rent, in addition to brand rent,
which is embedded in the prices of many commodities, making them monop-
oly prices (also including the payments for brand use licenses that are typical
in franchising processes).
After the inventory of value transmission channels in the context of depen-
dency 4.0, two final observations are appropriate. The first is that the move-
ment toward the payment of remunerations that are identified with rent and
considered a right associated with the mere ownership of capital is enormously
intensified. Included here are not only the interest owed under all kinds of
financial investments (conventional loans or portfolio investments) but also
dividends and—here is the novelty—a good part of what appears as profit but
is in reality rent. For example, in the world of industry 4.0, the term “platform
economy” is used to refer to a process of accelerated serviceability of industry,
with the transformation of companies into true digital platforms and the con-
sequent change in relative prices in favor of cognitive services and at the
expense of physical means of production such as machines and equipment.
This almost naturally goes hand in hand with the domination of many indus-
tries by corporate giants and what is already being called the “uberization” of
work processes (see Abílio, 2018; Slee, 2017). In the specific case of Uber, what
are the production relations that are established? Countless self-employed
(nonsalaried) workers who purchase with a certain part of their working time
the “input” they need to work—access to the digital Walrasian platform, owned
 Paulani / DEPENDENCY 4.0 IN BRAZIL   31

by Uber, which promotes the meeting of supply with demand for transport ser-
vices. But what do they pay for? How much does this input cost those who pro-
duce it? Each additional “unit” of access to the Uber platform costs exactly zero,
since no labor time is required to produce it. Despite this, a price is effectively
generated, and that price must be paid or the platform is not released for use.
The substance behind this “price” is pure rent, which is owed to the plat-
form’s owners.10 Because Uber is a multinational corporation based in San
Francisco, it captures as rent a substantial part of the working time of drivers
around the world (operating in more than 700 metropolitan regions). This
rent flows directly into the United States and promotes accumulation of the
American giant and sumptuous luxury for its administrators and bureau-
cratic oligarchies.11
The second observation has to do with the logic that has driven peripheral
economies, for four decades, to live with foreign savings. It is a vicious depen-
dency, because the price of access to international capital signifies an increasing
impairment of the new value produced domestically with the remuneration of
such capital, which, in turn, generates an increase in the need for these same
foreign savings to maintain the balance of external accounts, and so on. However,
the main consequence for peripheral countries of being trapped in this vicious
circle is not even such transfer in and of itself (although this is the material ben-
efit clearly captured by the capital-exporting countries that are in the system’s
core) but what Fiori referred to in the article from a quarter-century ago: the
constant coercion that these countries suffer, in the global competition for invest-
ments, as to the form of management of their macroeconomic policy. Only
“well-behaved” countries, those that “do their homework,” are given consider-
ation. Hilferding (1985 [1910]), in his classic work on finance capital, was one of
the first thinkers to draw attention to the fact that the export of capital functions
as a clear element of subordination among nations. More than a century after the
publication of the work, this shrewd observation has never been truer. Brazil is
an exemplary case of this subordination.

Dependency 4.0 and Brazil

A brief reconstruction of the different forms that have historically character-

ized the participation of the Brazilian economy in the global capitalist system
(see Paulani, 2012; 2013) will reveal the evolution of the different phases of the
dependency relationship that is the focus of this discussion.12 The first phase is
that of the expansion of the original territorial states. In this phase, Brazil
worked as a heritage reserve, a home base for the operation of a coerced work-
force, and a source of precious metals and raw materials. The country was
simply an object to be plundered, a typical case in the phase of primitive accu-
mulation then under way. In the second phase, the country was a producer of
primary goods, with low value added. Until the beginning of the twentieth
century, the Brazilian economy, operating according to a process determined
from outside, acted to boost accumulation in the core, producing raw materials
and agricultural products at low cost.
32   LATIN AMERICAN PERSPECTIVES

Taken together, these first two phases add up to more than four centuries. It
was not until the 1930s that, to use the terms of Celso Furtado’s (2006 [1959]:
274) classic diagnosis, the “displacement of the dynamic center of the econ-
omy” occurred, opening up the possibility that the accumulation process would
be determined from inside, with its dynamics guided by variables related to the
domestic economy. This new situation, the result of the combination of internal
political factors with the seriousness of the world economic crisis that was
spreading at the time, set the stage for the third phase. Already overwhelmed
by the problem of overaccumulation, in the second half of the 1950s capital
from the system’s core found in the Brazilian economy the demand that was
becoming scarce in the developed world. The country thus became the target
of capital relocation from the core, causing the accumulation process, deter-
mined from inside, to be commanded, in the most dynamic sectors of the econ-
omy, by the needs and imperatives of capital from outside.
Despite this, it was during this period, beginning in 1930, that the first real
possibility for the Brazilian economy to leave its chronic dependency behind
presented itself. This was the aim of the national developmentalist attempts
carried out by administrations of different political orientations. Diffusely and
even avant la lettre, as in the case of Getúlio Vargas, these different governments,
whether under democratic or dictatorial regimes, were realizing what the
dependency theory, based on the discoveries of Raúl Prebisch, would later
demonstrate: that capitalist development does not occur in stages and that
national economies do not follow a straight line that naturally flows from less
developed phases of production where low value added is produced into more
advanced ones marked by industry and the development of cutting-edge tech-
nology. Underdevelopment, as Furtado (2009 [1961]) shows, was a type of cap-
italist development that made peripheral countries, because of their position in
the international division of labor, dependent on and hostage to the imperial-
ism of core countries. On a pragmatic level, this meant that Brazil either had to
take a chance on its own industry or remain at the mercy of price relations that
did nothing to support the national interest.
The deepening crisis of overaccumulation in the global capitalist system,
which emerged in the 1970s, ended up calling a halt to national-developmen-
talist efforts by the close of the decade, throwing the Brazilian economy into the
turbulent waters of financialization. Thus, in the fourth phase of the history
briefly described here, financial wealth, which, spurred on by the crisis itself,
had been increasing very rapidly, found in Brazil the demand for borrowed
resources that was lacking in times of deepening world crisis.
The second oil-price shock and what is known as the interest-rate shock,
both of which occurred in 1979, set in motion a period of high inflation that
came to an end only when, after several turbulent experiences in stabilization,
the Real Plan was announced in 1994. Along with this, the country found itself
embroiled in a foreign debt crisis as a result of its inability to generate the hard-
currency resources needed to take on the new high in oil prices and foreign
debt service, whose value had been multiplied by four. In 1987, in the wake of
the failure of the first stabilization plan, Brazil opted for defaulting on its debt.
Even with that in place, between 1970 and 1990 the nation paid US$140 billion
in interest to foreign creditors. In this fourth stage of its relationship with the
 Paulani / DEPENDENCY 4.0 IN BRAZIL   33

world’s capitalist economy, Brazil was the picture of an already industrialized

peripheral economy victimized by the accelerated financialization of capital-
ism at a global level.
In the early 1990s, the persistence of extremely high inflation rates, com-
bined with the external debt pending resolution since the default, placed the
Brazilian economy on the margins of the affluent international financial mar-
ket, which was becoming increasingly robust. Initiating the fifth phase in the
history of the country’s subordinate incorporation into world capitalism, the
Brazilian government, through Fernando Collor/Itamar Franco and later
Fernando Henrique Cardoso, consciously embraced neoliberal dogma and
began to take steps to enable the country to actively enter the era of financial-
ization and be transformed into an “emerging financial power.” The first of
these measures was to solve the problem of the external debt, which was
achieved by complying with the requirements of creditors and multilateral
agencies (including authorization for the securitization of such debts), opening
the Brazilian market up to private and public securities, and financially open-
ing the economy with the gradual removal of the controls that impeded the free
international flow of capital.
The resolution of defaulted debts allowed for a rapid accumulation of
reserves. This return of capital to the country contributed to the success of the
Real Plan by greatly strengthening the national currency. Once there was mon-
etary stabilization, other measures in the same direction were taken, among
them income tax exemptions for nonresidents, legal changes to provide more
guarantees of the rights of state creditors, and social security reform to cut
public spending and open the pension market up to private capital. In parallel
but contributing to the same result, a monetary policy with very high real inter-
est rates and very strict fiscal control (seeking to generate substantial primary
surpluses) was adopted, and the privatization process took off. The high real
interest policy doubly benefited rentier capital in that it increased its earnings
while making the real and financial assets produced domestically very cheap.
Beginning in 1999, the country was fully equipped as a candidate for “emerg-
ing financial power.” Thanks to the severe exchange-rate crisis that began in
1998 in the wake of the currency crises in emerging countries that spanned the
entire decade, the Cardoso administration, in January of the following year (the
beginning of its second term) made changes to the country’s exchange-rate
regime, moving toward a floating exchange rate and adopting the macroeco-
nomic tripod, with its inflation target regime. Not even Lula’s presidential win
was able to change this situation. Liquidity remained tightly controlled, with
extremely high interest rates and primary surpluses that rose beyond even the
levels required by the IMF. Furthermore, measures were taken to complete the
process of entry of the Brazilian economy into the world circuits of financial
accumulation: extension of pension reform to the civil service, reform of the
bankruptcy law to prioritize the interests of financial creditors, and an increase
in financial openness. However, this financial activism was not without conse-
quences for production.
The ongoing trend toward overvaluation of the domestic currency that the
financial policy produced led to deindustrialization (Bresser-Pereira and Gala,
2007), and this had a doubly perverse result in this fifth phase: on the one hand
34   LATIN AMERICAN PERSPECTIVES

we are eternal payers of rent, while on the other hand our productive matrix
has dropped to the second-phase level, placing us again as an extractive and
primary economy producing almost exclusively goods with low value added.
The proportion of manufactured products in our balance of trade, which had
surpassed 60 percent in the early 1990s, is currently hovering around 35 percent.
Of the country’s 10 most-exported products in 2019 and 2020, only one is not a
primary good; the top products are soy, iron ore, crude oil, sugar, and beef. From
the point of view of a world that is plunging into industry 4.0, this result could
not be worse, since the loss of industrial importance is increasingly moving the
country away from the possibility of getting on an even technological footing.
I prefer not to delve deeply into what happened during the three Partido
dos Trabalhadores (Workers’ Party—PT) administrations, because from the
point of view of interest to us here their efforts did nothing to change the pic-
ture. The attempt to resume public investment with the Growth Acceleration
Program launched by Lula in 2006 and the policy to protect national content
that was part of what became known as the “new macroeconomic matrix” in
President Dilma Rousseff’s first term were totally dismantled by the worsen-
ing of the 2008–2009 international crisis, whose serious consequences defini-
tively reached Brazil in the early 2010s. Without going into the merits of the
high-impact social programs that those administrations adopted, which had
undeniable consequences from the point of view of the reduction of poverty
and inequality, their economic policies generally reaffirmed the country’s del-
eterious incorporation into global capitalism, a process that began in the 1990s.
This was certainly one of the reasons that the preservation of these programs
was put in danger with the worsening of the international crisis. The result
was the rapid destruction of what had been achieved.13

Final Considerations

That said, we can reflect on the constant absorption of foreign savings that
Brazil has been experiencing for nearly three decades as a current and more
perverse type of dependency. With no need to experience losses in terms of
trade (or even the opposite, as occurred between 2001 and 2008), more-devel-
oped countries are guaranteed to extract value from less-developed countries
given the volume of external liabilities with which each of the former econo-
mies is burdened. When this is combined with the deliberate intention to pro-
duce surplus gains for foreign capital, as has happened in Brazil since the
mid-1990s, the benefit for such capital becomes even more obvious. If periph-
eral countries swallow larger and larger portions of external savings, the cap-
ture of surplus value and the valorization of foreign capital will be guaranteed
at the expense of the capital and labor of less-developed countries.
Brazil, as I have tried to demonstrate, is an emblematic case of this modern
and complex type of subordination. The domestic economy is trapped in a
vicious circle of dependency on foreign savings that reproduces itself indefi-
nitely as the nation loses freedom in managing its economic policy.14 In addi-
tion to foreign savings, the set of operations that constitute what I have called
dependency 4.0 involves rent payments in commercial relations, whether
 Paulani / DEPENDENCY 4.0 IN BRAZIL   35

Figure 1.  GDP and rent payments, 1980–2018 (Banco Central do Brasil, 2019; IPEADATA,
2019).

through brands and licenses to use them or through the acquisition and use of
knowledge commodities. The existence of these commodities affects the very
nature of foreign direct investment. Much of this investment takes place in sec-
tors that are part of the so-called platform economy, and thus the profits sent by
corporate giants back to their headquarters in their home countries constitute,
to a large extent, rent. These amounts are anything but negligible in a country
like Brazil, the victim of early deindustrialization, where services account for
around 60 percent of the gross domestic product (GDP) and where Uber, for
example, has its second-largest world market.
An analysis of microdata from operations recorded in the balance of pay-
ments would allow a more accurate assessment of the recent evolution of value
capture through various channels (foreign direct investment, portfolio invest-
ment, conventional loans, purchase of goods and services), which was not pos-
sible to do for this analysis. However, Figure 1, put together using aggregated
data, aptly demonstrates the impact in terms of value transfer of the constant
absorption of foreign savings and the ratification of dependency 4.0 in Brazil
over the past quarter of a century.
It shows the evolution of two series of index numbers that have the year 1980
as their base: the GDP series and the series of expenditures on remuneration of
foreign capital recorded in the balance of payments (primary income account).
The change in the behavior of the expenditure curve in relation to the GDP
curve is clearly visible beginning in 1994, which was an important year for
achieving monetary stability and for progress on measures aimed at transform-
ing Brazil into an emerging financial power. It was from that point that the
country’s dependency 4.0 became firmly established.

Notes

  1. See, for example, Fiori (1995) and Bresser-Pereira (2010). For Fiori it is more properly a
school, involving a huge number of articles and books on Latin America in the 1960s and 1970s,
while for Bresser-Pereira it is a sociological and political interpretation that came to compete with the
national-bourgeois interpretation of the issue. Well before that, Palma (1978) had made a similar
observation—that it was not a theory but a methodology for analyzing situations related to under-
development.
36   LATIN AMERICAN PERSPECTIVES

  2. According to Bresser-Pereira (2010), the interpretation of dependency has three versions,

all of them Marxist—superexploitation, the national-dependent contradiction, and associated
dependency. Therefore, while this body of ideas cannot be called a “theory,” all its versions appar-
ently would have the same theoretical root. This position, however, is not unanimous. Martins
(2003), Sotelo Valencia (2005), and Amaral (2012), for example, find the last of the versions listed
by Bresser-Pereira, the associated dependency of Cardoso and Faletto (1977 [1969]), a theoretical
matrix more Weberian than Marxist. For Martins (2003), in this version political autonomy ends
up subordinating more materialist concepts of Marxist origin. While the term “Marxist theory of
dependency” is often found in scholarly articles on the subject, it refers only to the first of Bresser-
Pereira’s versions, the one found in the work of Ruy Mauro Marini and Theotônio dos Santos,
among others (see Carcanholo, 2013).
  3. Private equities are equity securities of companies that are established but not yet listed on
the stock exchange (privately held). Private equity funds are collective investment schemes in this
type of security. Leveraged buyouts are transactions that can transfer control of a company to a
large block of capital or large investors through the leveraged use of that company’s cash flow as
collateral in the issuance of debt securities.
  4. In a bulletin published at the end of 2018, the International Monetary Fund (IMF) warned
against the uncontrolled growth of leveraged loans (the issue of which reached US$1.3 trillion in
2018) and the dangerous deterioration of lending standards. Chesnais (2019) draws attention to
this, highlighting the explanation put forward by the IMF itself for such reckless growth: With
interest rates extremely low for years and with ample money flowing though the financial system,
“yield-hungry investors” (a term coined by the IMF) are tolerating ever-higher levels of risk.
https://blogs.imf.org/2018/11/15/sounding-the-alarm-on-leveraged-lending/.
  5. For more information on this, see Teixeira and Rotta (2012). For a different position that
understands the price of knowledge commodities as interest rather than as rent, see Prado (2005).
  6. It is no coincidence that the statement that the brand “generates value” has practically
become a catchphrase in modern business administration manuals.
  7. I agree here with Harvey (2004) and Chesnais (2016) in their diagnosis of the nature of the
as yet unresolved crisis of the 1970s as a crisis of overaccumulation (an excess of capital in relation
to possibilities for its productive valorization).
  8. What I have not mentioned here is the issue of the lower value of the labor force in periph-
eral countries, because this phenomenon does not, in itself, imply a transfer of value unless there
is superexploitation in the sense of Marini (2005 [1973]). However, it is evident that finding a
lower-value labor force serves as leverage for accumulation, since it makes productive capital
cheaper. This is why, facilitated by globalization, what is known as “productive relocation” has
spread across the world. Regarding superexploitation, notwithstanding the descriptions provided
in Marini’s work and despite its seeming intuitively correct, especially when looking at countries
like Brazil, the argument that the labor force is paid below its value is theoretically controversial,
and I consider it unnecessary for defending the points of view I am adopting here. Additionally,
Marini himself, in his last work, acknowledged that the reasons to advocate for the existence of
superexploitation of the labor force in the periphery and the dependency associated with it ceased
to exist with the advent of globalization (Marini, 1995). However, this does not mean that super-
exploitation and dependency no longer exist. Rather, they may well have merely changed shape.
What this says about dependency is precisely what I am trying to show.
  9. According to Schwab (2016), the term “industry 4.0” was used for the first time at the
Hannover Industrial Fair in Germany in 2011. However, there is still no consensus on its use.
10. It could be argued that there is a mass of employees of these corporations who work to
maintain and update the platforms and who would be internally creating value. However, there
is still the issue that it is not the number of access hits that produces this cost. Keeping the private
ownership of the platform, each access unit generates zero additional cost, with or without proper
maintenance and regular updating of the platform. What each driver pays for with his work is
access to this private property. A second argument against this interpretation is that, if we are
talking about knowledge commodities, wealth (in the case at hand, a more efficient platform) is
generated not by working time but rather by the elements set in motion during working time. The
clear reference here to Marx’s famous passage in the Grundrisse (2011 [1857–1858]), known as “the
fragment of machines,” is unavoidable, as he precisely points to the “general intellect” as the most
important of these elements.
 Paulani / DEPENDENCY 4.0 IN BRAZIL   37

11. “Bureaucratic oligarchies” is a term used by Dardot and Laval (2019) to refer to the top
executives of large corporations.
12. In the taxonomy of situations/phases of dependency addressed earlier, I have mentioned
only those provided by well-known writers and/or those who were part of the intellectual history
of this concept. However, many new people have been making substantive contributions to this
discussion, Amaral (2012) and Oliveira (2017) seek to update the discussion, Amaral dealing with
financialization and Oliveira with the knowledge economy. Both talk about a “new dependency,”
but they are referring to the elements of what I am calling dependency 4.0.
13. According to a survey by the Instituto Brasileiro de Geografia e Estatística (Brazilian Institute
of Geography and Statistics [IBGE, 2018]), in 2017 54.8 million people were identified as living in
poverty in the country (26.5 percent of the population), and of these 2 million had fallen into pov-
erty in 2016 and 2017. Currently, it is estimated that around 60 million people live in poverty.
14. Drawing on the country’s recent history and data from official sources, Bruno and Paulani
(2019) demonstrate how the financialized regime makes any attempt at a developmentalist policy
infeasible.

References

Abílio, Ludmila Costhek

2018 “Uberização do trabalho: subsunção real da viração.” http://www.cesit.net.br/
uberizacao-do-trabalho-subsuncao-real-da-viracao/ (accessed May 10, 2019).
Amaral, Marisa Silva
2012 “Teorias do imperialismo e da dependência: a atualização necessária frente à financeiriza-
ção do capitalismo.” Ph.D. diss., Instituto de Pesquisas Econômicas, Universidade de São
Paulo.
Banco Central do Brasil
2019 “Balanço de pagamentos.” https://www.bcb.gov.br/content/estatisticas/Documents/
Tabelas_especiais/BalPagAbpm5.xls and https://www.bcb.gov.br/content/estatisticas
/Documents/Tabelas_especiais/BalPagA.xlsx (accessed September 21, 2019).
Bresser-Pereira, Luiz Carlos
2010 “As três interpretações da dependência.” Perspectivas: Revista de Ciências Sociais 38 (July):
17–48.
Bresser-Pereira, Luiz Carlos and Paulo Gala
2007 “Por que a poupança externa não promove o crescimento.” Revista de Economia Política 27
(January): 3–19.
Bruno, Miguel A. P. and Leda Maria Paulani
2019 “Developmentalist policies in financialized economies: contradictions and impasses of
the Brazilian case.” Paper presented at the Fourth Workshop on New Devopmentalism, São
Paulo. https://cnd.fgv.br/sites/cnd.fgv.br/files/Miguel_Bruno_VF.pdf (accessed August 12,
2019).
Carcanholo, Marcelo
2013 “O atual resgate crítico da teoria Marxista da dependência.” Trabalho, Educação e Saúde
(online) 11 (January): 191–205.
Cardoso, Fernando Henrique and Enzo Faletto
1977 (1969) Dependência e desenvolvimento na América Latina: Ensaio de interpretação sociológica.
Rio de Janeiro: Zahar.
Chesnais, François
2007 “The economic foundations of contemporary imperialism.” Historical Materialism 15:
121–142.
2016 Finance Capital Today. Leiden and Boston: Brill.
2019 “La théorie du capital de placement financier et les points du système financier mondial
oú se prepare la crise a venir.” A l’Encontre, September. http://alencontre.org/economie
/la-theorie-du-capital-de-placement-financier-et-les-points-du-systeme-financier-mondial-ou
-se-prepare-la-crise-a-venir.html (accessed, June 14, 2019).
Dardot, Pierre and Christian Laval
2019 Never Ending Nightmare: The Neoliberal Assault on Democracy. London and New York:
Verso.
38   LATIN AMERICAN PERSPECTIVES

Fiori, José Luis

1995 “A globalização e a novíssima dependência,” pp. 210–235 in José Luis Fiori (ed.), Em busca
do dissenso perdido. Rio de Janeiro: Insight.
Furtado, Celso
1982 A nova dependência: Dívida externa e monetarismo. Rio de Janeiro: Paz e Terra.
2006 (1959) Formação econômica do Brasil. São Paulo: Companhia das Letras.
2009 (1961) Desenvolvimento e subdesenvolvimento. Rio de Janeiro: Contraponto/Centro
Internacional Celso Furtado.
Gowan, Peter
2003 A roleta global. Rio de Janeiro: Record.
Harvey, David
2004 O novo imperialismo. São Paulo: Loyola.
Hilferding, Rudolf
1985 (1910) O capital financeiro. São Paulo: Abril Cultural, “The Economists” Collection.
IBGE (Instituto Brasileiro de Geografia e Estatística)
2018 Síntese de indicadores sociais. Rio de Janeiro: IBGE.
IPEADATA (Instituto de Pesquisa Econômica Aplicada)
2019 “Produto interno bruto a preços de mercado.” http://www.ipeadata.gov.br/Default.aspx
(accessed September 20, 2019).
Marini, Ruy Mauro
1995 “Processos e tendências da globalização capitalista,” pp. 260–294 in Emir Sader (ed.),
Dialética da dependência. Petrópolis: Vozes.
2005 (1973) “Dialética da dependência,” pp. 137–180 in Roberta Trespadini and João Pedro
Stédile (eds.), Ruy Mauro Marini: Vida e obra. São Paulo: Expressão Popular.
Martins, Carlos Eduardo
2003 “Globalização, dependência e neoliberalismo na América Latina.” Ph.D. diss.,
Universidade de São Paulo.
Marx, Karl
1991 (1895) Capital. Vol. 3. London: Penguin Books.
2011 (1857–1958) Grundrisse. São Paulo: Boitempo.
Oliveira, Elizabeth Moura Germano
2017 “A economia do conhecimento e uma nova forma de dependência no capitalismo
brasileiro.” Ph.D. diss., Universidade Federal da Bahia.
Palma, José Gabriel
1978 “Dependence: a formal theory of underdevelopment or a methodology for the analysis
of concrete situations of underdevelopment?” World Development Elsevier 6: 881–924.
Paulani, Leda Maria
2012 “A inserção da economia brasileira no cenário mundial: uma reflexão sobre a situação
atual à luz da história.” Boletim de Economia e Política Internacional 10 (April): 89–102.
2013 “Acumulação sistêmica, poupança externa e rentismo: observações sobre o caso
brasileiro.” Estudos Avançados 77 (January): 237–261.
2016 “Acumulação e rentismo: resgatando a teoria da renda de Marx para pensar o capitalismo
contemporâneo.” Revista de Economia Política 36: 514–535.
Prado, Eleutério Fernando da Silva Prado
2005 A desmedida do valor. São Paulo: Xamã.
Schwab, Klaus Martin
2016 A quarta revolução industrial. São Paulo: Edipro.
Slee, Tom
2017 Uberização: A nova onda do trabalho precarizado. São Paulo: Elefante.
Sotelo Valencia, Adrián
2005 “Dependencia y sistema mundial: ¿convergencia o divergencia? Contribución al debate
sobre la teoría marxista de la dependencia em el siglo XXI.” Revista da Sociedade Brasileira de
Economia Política 17 (December): 72–91.
Teixeira, Rodrigo Alves and Tomas Nielsen Rotta
2012 “Valueless knowledge-commodities and financialization.” Review of Radical Political
Economics 44: 448–467.