Volume 43, Number 169, April-June 2012


EDITORIAL
WRITINGS ON DEVELOPMENT: SEEDS FOR RECREATING
AND STRENGTHENING OUR ECONOMIC THINKING

revista164 From time to time it's important to read once again the writings of our greatest teachers. Pages written during the early years of their careers. Seeds in the sands of thought, to be harvested through the work of their students and generations to come. Development-focused thinking from a Latin American perspective is an endless seedbed for alternative economic processes –to contribute to the ongoing discussion from a heterodox perspective in the debate between those both younger and older in countries where paths for growth lead the way to becoming developed economies. New ideas arise to help us understand, from political economics, what lies ahead for our nations. Always from a position critical of neoclassical and orthodox thinking. And clearly, with the aim of recreating economic thinking that is critical of the policies implemented over the last nearly four decades– which have held people down in poverty and have thrust enterprising individuals toward migration as they search for opportunities.

Today, we remember parts of the legacy left by some of our greatest teachers who passed away at the beginning of this year–reflected in articles they published in our journal.

José Luis Ceceña, in the first issue of Problemas del Desarrollo, Latin American Economics Journal, wrote an article entitled “La penetración extranjera y los grupos de poder económico en el México porfirista (1870-1910) (Foreign penetration and economic power groups in Mexico (1870-1910)).” He proposed that, “...during the Díaz government, our country was fully incorporated into world capitalism as a result of the economic penetration by major US and European monopolies” (Ceceña, 1969: 48-88). And he posed a number of questions: To what degree was the penetration by foreign capital produced? What branches of activities were developed from its impact and what degree of control did foreign capital manage to garner in each of them? What was the origin of this capital? To what extent did the penetration of foreign capital favor or limit the emergence and development of the Mexican bourgeoisie? All of these questions were answered specifically with the names of businesses and the sectors in which they operated, ending finally with a text on the relationship between the Mexican government and bourgeoisie at the service of foreign capital. If we were to respond to these questions in the context of our current economy, we would perhaps need only to update the figures, since the situation is very much the same– at least for the banking sector in our country which has ceased to be national, returning to foreign hands.

Arturo Bonilla, in his article entitled “La política petrolera mexicana (Mexico's oil policy)” (Bonilla, 1976: 103-117), commented that, “...the growing financial dependence of pemex on large transnational banks is not exclusive, but rather also characterizes other state-owned enterprises such as the Federal Electricity Commission, the National Railways, and Altos Hornos de México and sicartsa (iron foundry companies). Financial dependency goes hand and hand with technology. Many process designs are developed with patents and under licenses granted to major transnational corporations, primarily US-owned, and foreign credit is conditioned on acquisition of equipment, machinery and inputs. This dependency is even greater in the case of the petrochemical industry, developed by major international corporations. They have a monopoly on control over manufacturing processes. The growth of this industry, since the beginning of its development (during the last third of the past century) and continuing up until today, has always taken place in conditions of increasingly complex technological and financial dependency. And while much has been done to try to prevent this situation of dependency in the case of pemex, the truth is that these efforts have been in vain” (1976: 116-117).

In the second issue of our journal, Ángel Bassols Batalla made some important statements that can contribute to resolving our recent problems in his article entitled “El subdesarrollo: un enfoque geoeconómico (Underdevelopment: a geoeconomic perspective)” (Bassols, 1970: 85-118). He commented that, “...studies on the theory of underdevelopment in our countries cannot be conducted by only specialists in economic sciences, but rather require the joint efforts of scholars dedicated to other fields of knowledge. The historic-economic phenomenon is the determining factor in the current situation of underdevelopment in many nations, but it must be remembered –first of all– that these nations have come to exist on very particular foundations that are physical in nature and associated with natural resources, while confronting concrete demographic problems. Secondly, the economies in these countries are manifested spatially, and their study involves economic geography. In addition, general backwardness is reflected in public administration, education and health, and in short, national life is also composed of cultural and religious heritage and customs, etc.” (Bassols, 1970: 85). He continued, “...economic geography addresses basically three sets of issues: a) the reciprocal influence between the geographic-physical environment and man, b) the spatial distribution (fundamentally in terms of zones and regions) of productive phenomena, and c) the transformation of nature by society. The geographic method always consists of approaching things in terms of their historical roots and their objective expression, and discovering different types of inter-relations” (Bassols, 1970: 88). In light of these statements from Bassols, we should pose the following questions: who erased economic geography from the undergraduate program in economics? Is the study of natural resources not a high priority in our times, together with the game of assigning prices to these resources as commodities in financial markets– the natural products exported from Latin American countries?

The definition of capitalist development formulated by Fernando Carmona is also well worth including here. “Capitalist development can only be unequal, anarchic and contradictory, particularly if it is a subordinated process as in the case of Mexico. But if the concept of development is identified –as generally accepted in Mexico– with a process of advancement toward national economic independence and the well-being of the majorities, then what we have experienced during the last three decades –a period during which structural dependence has intensified, and social inequality has been maintained or worsened– cannot be considered as genuine development” (Carmona 1970: 7-9). Today this definition continues to be pertinent, giving us more than reason enough to return to the classics in the theory of the development of economic thinking.

This issue of our journal opens with the article “Veblen and the Origin of the Catching-up Hypothesis” written by James Cypher. One of the most important statements in this article is that Veblen's growth theory is a development economics theory because economic expansion leads to and causes the formation and transformation of institutions. The author critiques Veblen's work, and ends the article by pointing out how scientific and technological advancement offers great benefits that take shape in an expanding industrial base–and that once in a virtuous circle, cumulative causation is within reach, and with it, catching-up.

Then, “The Political Economy of Development, Postcolonial Analysis and ‘Bad Samaritans’” by Fernando López is aimed at presenting the relevant aspects of the “new orthodoxy” in the current of economic thinking. The “new political economy of develoment” and the “political economy of colonization” are the focuses of this article. Before closing, the author touches on the point of historical amnesia, citing Chang, Grebel, Rodrick and Hobsbawn. And he ends with a metaphor, proposing that economic and institutional recommendations for developing countries are largely an attempt to pull up the ladder before progress is achieved.

The article “Accumulation of International Reserves in Emerging Counries with Floating Exchange Rates” by Patricia Rodríguez and Omar Ruiz reflects the importance of international reserves in the world concert of economic and financial crises. The authors address the use of reserves in emerging markets as a precautionary type of use in response to the serious banking and financial crises–the memory of which continues to be present through exchange rate and inflationary control policies established by central banks. The subordination of exchange rates to price stability policies demonstrates a type of controlled, managed floatation.

Christopher Absell, in his article “The alba-tcp: Looking with Keen Eyes,” emphasizes the importance of the trade agreement reached among the countries making up the Boliviarian Alliance for the Peoples of Our America. Only a few studies have been dedicated to this topic, and the author proposes an agenda for future research. He divides the research projects analyzed into four categories of critical, descriptive analysis. He points to the lack of a shared bibliography reflected in the different articles, and concludes that there is a need to further develop the nature of many knowledge-based projects.

“Chinese Imports and their Impact on the Spare Auto Parts Market in Mexico” by Lourdes Álvarez and Liliana Cuadros points to the displacement of the market for Mexican-manufactured auto parts in favor of merchandise of Chinese origin. The authors comment that the auto parts sector supplies three markets: the assembly plant market, export market and spare parts market. This article is unique in that it reports on empirical work carried out through interviews with experts. A survey was also applied to spare parts companies, and those results are also presented.

Marta Bekerman and Cecilia Rikap, in their article entitled “Structural Heterogeneity and Poor Microenterprises in Argentina,” investigate one of the serious problems in Latin America. Throughout the last four decades, subsistence or low-income microenterprises have emerged. The reduction in the size of the public sector and the privatization of public enterprises, accompanied by the collapse of some of the latter, led to a particular situation in Argentina. In the study of this topic, the authors use the concept of “structural heterogeneity” which is key in Latin American development theory. This segment of the population confronts problems that are very different than those faced by other productive strata.

Lastly, in the section on comments and debates, we present “The 1980's: Mexican Political Economy Reinterpreted through the Hypothesis of Financialization” by Violeta Rodríguez, who analyzes the transitional period toward the financialization of the Mexican economy, passing through a process that permitted an increase in financial profits. The author defines financialization as a pattern of accumulation replacing that which was in effect during the industrial capitalist era. She followed the process that extended through the golden age of capitalism, to distributional conflict, to leveraged buy-out, to consumer debt, and to the late 1990's and up until today, when the economy is totally financialized.

We close this issue with five reviews of the following publications: "Financial Vulnerability in Mexico,” written by Andrés Blancas, and reviewed by Alejandro López; “Perspectives on Work in Mexico,” coordinated by Alfonso Bouzas, and reviewed by Delia Vergara; “Ecological Enterprises: A Model for Economic and Territorial Interaction in Protected Natural Areas in Spain and Mexico ,” written by Javier Delgadillo and Francisco Alburquerque, and reviewed by Francisco Valdez; “Complex Systems: Perspectives on General Theory,” written by Germán de la Reza, and reviewed by Paola Vera; and finally the book entitled “Guava: Technological Innovations in Zacatecas,” written by Genaro Aguilar and Rebeca Granados, and reviewed by Paulina Mendoza.

BIBLIOGRAPHY
Bassols Batalla, Ángel, “El subdesarrollo: un enfoque geoeconómico,” in Problemas del Desarrollo,
Vol. 1, No. 2, Mexico, iiec-unam, January-March 1970, pp. 85-118.
Bonilla Sánchez, Arturo, “La política petrolera mexicana,” in Problemas del Desarrollo, Vol. 7, No. 27,
Mexico, iiec-unam, August-October 1976, pp. 103-117.
Carmona de la Peña, Fernando, “¿Qué problema o problemas son los más importantes en el desarrollo actual
de México?” in Problemas del Desarrollo, Vol. 1, No. 2, Mexico, iiec-unam, January-March 1970, pp. 7-9.
Ceceña Gámez, José Luis, “La penetración extranjera y los grupos de poder económico en el México
porfirista,” in Problemas del Desarrollo, Vol. 1, No. 1, Mexico, iiec-unam, October-December 1969, pp. 49-88.

Alicia Girón
Journal Editor
UNAM, March 2012

Published in Mexico, 2012-2017 © D.R. Universidad Nacional Autónoma de México (UNAM).
PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 48, Number 191, October-December 2017 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
CP 04510, México, D.F. Tel (52 55) 56 23 01 05 and (52 55) 56 24 23 39, fax (52 55) 56 23 00 97, www.probdes.iiec.unam.mx, revprode@unam.mx. Journal Editor: Alicia Girón González. Reservation of rights to exclusive use of the title: 04-2012-070613560300-203, ISSN: pending. Person responsible for the latest update of this issue: Minerva García, Circuito Maestro Mario de la Cueva s/n, Ciudad Universitaria, Coyoacán, CP 04510, México D.F., latest update: Nov 13th, 2017.
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