Volume 46 Number 182,
July-September 2015
Latin America in the Mirror of South Korean
and Chinese Development

Jaime Osorio*

Date received: January 21, 2015. Date accepted: April 23, 2015

Abstract

Will underdeveloped economies be able to achieve development in the twenty-first century? To advance towards a potential response to this question, this paper analyzes some aspects of the development processes of South Korea and China, pointing to the exceptional geopolitical and strategic conditions behind why their models are unsuitable to emulate. It also highlights the state authoritarianism, strict planning and discipline of both the ruling and ruled classes to guide investment and the growth of specific economic sectors. From this perspective, the paper then discusses some proposals formulated for the region by neo-developmentalism.

Keywords: Development theory, underdevelopment, the State, capitalist development, economic policy.

INTRODUCTION

In an article published in English in 1966, drawing on earlier writings from 1963, Andre Gunder Frank formulated one of the ideas that would radically alter development studies, asserting that "the present underdevelopment of Latin America is the result of its centuries-long participation in the process of world capitalist development" (1991: 37-42). From this perspective, development was no longer seen as a problem of isolated nations that go through successive stages to reach prosperity. Looking only at the interconnectivities of the global system, this point of view began to make more sense, which paved the way for academics to approach the issue of underdevelopment from this framework, in the sense that underdevelopment is precisely the inextricable flipside of development. From that point forward, the idea would be revisited by various other authors, such as Sunkel and Paz (1970) from the Latin American Institute for Economic and Social Planning (ILPES), and especially by those scholars who would breathe new life into Marxist dependency theory (Marini, 1969: 3). By looking at some of the particularities of South Korean and Chinese development, this paper aims to demonstrate that this perspective of reflection—grossly disregarded, yet stigmatized—is still quite germane, in order to discuss the processes and prospects for development in our region.



THE RELATIONSHIP BETWEEN DEVELOPMENT
AND UNDERDEVELOPMENT

Development and underdevelopment are two sides of the same coin: the history of the spread and expansion of the world capitalist system. This thesis, formulated primarily by Frank, as already mentioned, and taken up again by other ECLAC schools of thought and dependency theorists, requires us to contest two key ideas at the very core of development theory: the first, that development and underdevelopment can be studied and explained individually and on their own, in isolation, and that the relationships between economies mired in one condition or another have no substantial consequences for their situations.

The new formulation maintains, on the contrary, that only by delving deep into the relationships that give life to the world capitalist system can we attempt to illustrate why some economies and regions develop and why other economies and regions underdevelop. They are therefore not independent processes. They cannot be depicted except through their mutual relationships.

The Industrial Revolution (...) is not a process that can be explained and understood in terms of isolated countries, such as England, or isolated regions, such as Northwestern Europe. In reality, it evolved within a global economic and political system that links these countries and regions together, and with their respective colonial realms and dependent countries; these linkages significantly contribute to the very process of the Industrial Revolution through the generation and extraction of a surplus, the opening of markets and the exploitation of natural and human resources in peripheral areas (Sunkel and Paz, 1970: 44-45)

The second formulation challenged by this thesis states that underdevelopment—or its euphemistic variations, such as "developing economies" or "emerging economies"—is an economic phase or stage that precedes development, the outcome of the weak growth of capitalism, and that by permitting the reproduction of said capitalism, the solutions to development will somehow be elucidated.

The new proposal underscores that at the heart of the capitalist relations that predominate the world over, underdevelopment is a mature form of capitalism; it is an original form, equally mature and original as developed capitalism.

Although this was the second main idea derived from the thesis, it was no less striking to assert that in the capitalist system, as a result of its expansion, various forms of capitalism coexist, and there is no single modality of capitalism, which poses the challenge of deciphering the internal and external processes that give life to and reproduce underdeveloped or dependent capitalism, as it ends up being called in more advanced versions.

This is the task to which the group of researchers working on Marxist dependency theory is dedicated. Key figures among this group include Vania Bambirra, Theotonio Dos Santos and Ruy Mauro Marini, whose work The Dialectics of Dependence (1973) portray this theory in its most fully realized form.

But the mere condition of development or underdevelopment in the global capitalist system in a certain era or period of time does not mean that this is the position that the economy will hold for all time, nor does it in any way reflect the past history of the system. The aforementioned thesis only sustains that in order for development to emerge in some geo-economic space of the global system, underdevelopment must necessarily be generated in other spaces, for diverse reasons, such as the loss of value in some regions to the benefit of others, in collusion with the ruling classes of underdeveloped regions. Some of this process comes across in the following:

(...) The profits made by transnational corporations operating in Latin America and the Caribbean have increased by a factor of 5.5 in nine years, swelling from US$ 20.425 billion in 2002 to US$ 113.067 billion in 2011. This surge in profits—also known as FDI income—tends to cancel out the positive impacts of FDI inflows on the balance of payments (...)". This is because " transnational corporations repatriate a slightly higher proportion of their profits (55%) than they reinvest (45%)" (CEPAL, 2012: 13 and 68) (emphasis added by the author).

From this perspective, it is theoretically possible to uphold that a developed economy can veer towards underdevelopment. That is why there is some sense in the claims, fed by the devastation of the current crisis—but also for reasons dating much farther back—that allege, for example, that the Spanish economy is becoming Latin Americanized, so to speak, not only because the Mariano Rajoy administration in Spain has acquiesced to implementing the orthodox neoliberal policies so acclaimed by European bodies and the International Monetary Fund (IMF), but also because these "mistaken policies" (Nadal, 2014) in the context of the current crisis will not pave the way to recovery, and in fact, on the contrary, will push the nation further towards the brink of underdevelopment (Roitman, 2012) to the immediate benefit of Angela Merkel's Germany and the big capital present in Spain.

I cannot say for sure that these forecasts will come true in the future, but the point is that a reversal such as the one described above is indeed possible in the movements and processes of the world capitalist system.

The corollary to the above hypothesis would therefore be that an underdeveloped country can change course and head towards development.

The only certainty regarding this second formulation is that if we label some economies as about to embark on the path to development (or already there), and enumerate the reasons behind this statement, the next logical step would be to ask in which economies and regions of the global system is underdevelopment spreading or becoming more entrenched. As we have seen, these processes necessarily bring with them consequences.



SOUTH KOREA, CHINA AND DEVELOPMENT

It is generally held that South Korea, in a short timeframe, has managed to become a developed economy. So we might wonder which other economies and regions paid the initial price—or are currently footing the bill—for this process, in the sense of underdevelopment intensifying or worsening. In fact, the United States allocated considerable funds to shore up and boost the South Korean economy, thanks to its strategic position on the Korean peninsula in tense moments of the Cold War. Between 1945 and 1961, South Korea received over 3.1 billion dollars in donated aid from the United States, more than double what was given to Belgium, Luxembourg and the Netherlands during the Marshall Plan, and one-third of what France received (Toussaint, 2006: 86). Said another way, "from 1953 to 1960, economic aid from the United States to South Korea represented one-third of the latter country's budget, financing 85% of its imports and 75% of fixed capital formation; in summary, 8% of the GNP" (Aquino, 2000: 127-155).

The role of the exploited South Korean classes in the process should not be downplayed, as they suffered acute and prolonged periods of overexploitation. For the moment, it is sufficient to note that "the State imposed on rural workers a minimum production volume for certain products" at prices set by authorities, generally "quite low, often less than the price at cost" (Toussaint, 2006: 88) and that by 1980, when the principal accumulation-related problems had been overcome, "the wage cost of a Korean laborer was only one-tenth that of a German laborer, half that of a Mexican worker, (and) 60% that of a Brazilian." Moreover, the workday for laborers this past year weighed in at the longest in the world and South Korea had no legal minimum wage (Toussaint, 2006: 95).

However, of the link between development and underdevelopment, it could also be said with certainty that the enormous resources given to South Korea in those years came not from the pockets of United States capital, nor from new or higher taxes imposed on the working population, but rather from the value that the United States economy appropriated from various other economies and regions, which ended up in Seoul.

Currently, there is debate surrounding China, as to when exactly it came to be considered—or could be considered—a developed economy and, moreover, if it truly constitutes a rival able to dispute the hegemony of the United States in the world system, or whether it is just a threat, as was the case of Japan and Western Europe in earlier eras.

Growth figures for the Chinese economy over the past decades are shocking, as is the country's progress in the production of sophisticated industrial goods, research and new knowledge, as significant advances have been made, even in space exploration.

A good portion of the burden of this swift transformation rests on the shoulders of the economy's enormous workforce, calculated at 834 million people as of 2015, with an estimated 200 million people having migrated from rural to urban areas by the 1990s (Martínez, 2008), which has in some sense exacerbated the underdevelopment of broad swaths of the Chinese economy, especially in the agro sector. But there is no doubt that although this is necessary, it is not enough to explain the potentialities of the development achieved. China is today an economy that obtains extraordinary earnings through multiple methods.

These methods are a unique combination of rapid science and technology advances that have permitted the country to substantially boost productivity, with low wages, long workdays and highly intense overexploitation that have allowed for the production and exportation of a massive quantity of goods of all types and complexities. The country is practically able to run over or debilitate any competition that stands in its way.

To this we can add an exchange rate policy that ends up constituting an export subsidy, with which China has managed to become the most powerful export economy (in 2013, total exports from China amounted to 2.021 billion dollars, above Germany, the United States, and France, while imports reached 1.095 billion dollars (Chinese News Agency, January 10, 2014), pushing the productive sectors of innumerable economies to the point of bankruptcy and pushing up their trade balance deficits, including that of the United States (as of 2013, the trade deficit of the United States with China had reached 318.4 billion dollars), which weakens the competition.

Much of this capital, whether from the developed or underdeveloped world, joins the tremendous supply of capital from diverse regions and economies that struggle to invest and jockey for positions in the extensive and diverse industrial plants existing in China, to produce a broad range of goods to be sold in markets with varying purchasing power all over the planet, riding the wave of the combination of low wages and high productivity. All major global companies, whether toy producers, manufacturers of light industrial goods, famous luxury clothing and accessories brands or durable consumer goods and capital goods producers, have some production plant built on Chinese territory.

This allows China to benefit from very high capitalization. According to UNCTAD, in 2012, China was ranked second on the list of economies receiving the most Foreign Direct Investment (FDI), with 121 billion dollars, only behind the United States, which achieved 168 billion dollars. In third place was Hong Kong, also Chinese territory, with 75 billion dollars (UNCTAD, 2013: 4). This FDI has allowed the country to multiply its accumulation processes, raise the skill-level of its labor force and transfer knowledge,1 and benefit from taxes, not to mention the repatriation of earnings on foreign investments.2

In this sui generis articulation of technology and productive progress with overexploitation, which cheapens prices to unattainable levels, China has achieved tremendously high investment in its territories, transferring to its population knowledge and training, and has voraciously captured market share. Chinese development flattens its competitors in the developed world and further ingrains the underdevelopment and dependency of other regions, luring away investment, breaking the competition, and flooding the market with cheap industrial goods. To give an example, from 2002 to 2011, sustained by high imports in the region, China became one of the principal suppliers of capital goods to Argentina, Brazil, Chile, and Mexico, considerably increasing its market share in all cases, despite not being the top source of imports (number one for Brazil was the European Union, while it was the United States for Mexico). So it was that in those years, China's market share as the supplier of machines, tools, and parts ballooned from 4% to 28% in Argentina, from 3% to 24% in Brazil, from 6% to 29% in Chile, and from 7% to 31% in Mexico (Bekerman, Dulcich, Moncaut, 2014: 69).

Building on the foundation of intensive capitalist accumulation supported by multiple factors, the Chinese market's appetite for imports also grew without affecting accumulation or producing trade deficits, to satisfy the growing demand for wage goods, as well as raw materials to sustain elevated local production, which has invigorated the export growth of Latin America in recent years.

It is in this way that China came to be the default factory of the world, as well as one of the locomotives powering the beaten-down capitalist economy in crisis.



A SERIES OF EXCEPTIONAL CONDITIONS

In the two cases considered, we must not lose sight of the exceptional conditions that made possible and define their development processes. In this sense, it is useful to highlight the role of the State in determining a country's development project, prioritizing tasks and timelines for allocating resources to certain sectors and branches, maintaining the monopoly over these resources, aligning the various ruling classes and factions in support of the project (which expresses, at the very least, the interests of the industrial bourgeoisie), disciplining the working classes and submitting them to acute exploitation and overexploitation, who then become submissive in advanced stages of the process, as is the case in South Korea, in wages, if not in intensity, something that is already happening in China.

This guiding role of the State and the autonomy (not independence) achieved in the face of various classes and ruling factions can be explained by historical peculiarities. Looking at South Korea, these reasons include groundbreaking agricultural reforms implemented between 1945 and 1960, which took power away from landholders, the Korean War (1950-1953) with North Korea (where two and a half million people died) and the fact that this conflict weakened accumulation processes and undermined the ruling classes. All of this created the conditions for the Korean State, with an iron fist, including in the form of a military dictatorship, to rise up at the core of capitalist reorganization.

It is enough to remember that during the 1961 coup d’état, General Park Chung-hee named a military junta to carry out the tasks of the executive and legislative branches, only to later declare himself President of the Republic in 1963, setting up a military dictatorship that suppressed the free press, restricted individual liberties, and enacted laws that would allow for his continuous reelection. He would last in office until 1979, when he was assassinated by the head of the intelligence apparatus created during his long mandate in the midst of an acute political crisis.

When he entered office, Park defined two pillars of recovery: development planning, which would involve drafting short and long-term plans, and the creation of large industrial conglomerates ( chaebol) with the support of United States multinational companies, which would play a fundamental role in the subsequent export push. In the early years, the priority for the resources earned on exports was to procure the importation of specialized equipment and inputs.

Park also put into place other important measures, such as the nationalization of the financial system, which operated with low interest rates and limited credit access, aiming to provide a stimulus to companies that were adjusting to the development plans. In this way, for example, in the second five-year economic development plan (1967-1972), 50% of financial sector resources were channeled towards supporting the chemical and heavy industry sectors (Cuéllar, 2012).3

We must not forget that Park was succeeded by another military dictator, Chung Doo Hwan, who essentially maintained the starring role of the state in managing the economy and stayed the course in terms of repressing the opposition and unions with an iron fist. He was also known for advancing to a new stage of industrialization, but was overthrown following strong protests in 1987. It was only in 1988 that South Korea finally elected a president with universal suffrage, and in 1992, the first civil president was elected (Toussiant, 2006: 95-104).

The revolutionary experience in China and the rise of a powerful state bureaucracy by which the shift towards capitalism began-—not, of course, without conflict—gave the State greater power and autonomy in the face of an emerging bourgeoisie developing under its protection, while also having a powerful ideological base provided by the 1949 Revolution, which allowed it to gain consensus and discipline among the majority of the population, although not without widespread oppression and coercion to pacify or shatter outbreaks of discontent and unrest.

Since the time that the Four Modernizations—agriculture, industry, defense, and technology— were adopted at the end of the 1970s, the State has been omnipresent in all decisions made regarding how to achieve development. China created special economic zones to give an early advantage to exports as a source of income for major economic tasks, implemented five-year plans, in turn part of broader-ranging and bigger-scope projects with a 20-30 year timeline, and began to open up to foreign capital with conditions that mandate the training of labor and knowledge transfer under the management and control of the Communist Party and the government. It is from this perspective that greater decision-making power has been given to state enterprises, regional governments, banks, and market transaction spaces (Meza, 2013).

It is important to note that in neither of these two cases did the shift towards development come about as the simple result of a dynamic or tendency towards capital accumulation. On the contrary, what happened in South Korea was that the country instituted profound agrarian reform and a war dismantled the old local ruling classes, weakening them, while major world powers offered numerous resources and protected, in both political and military terms, the recovery process and subsequent capitalist development of South Korea.

In China, we have a situation in which a society went through a revolution, also destroying the old foundation of the former ruling classes, unleashing forces and potentialities to achieve socialism, which, following various struggles and mutations, ended up being channeled into a process that not only led to capitalism, but also turned the country into the principal rival for the hegemony of the global system.

In turn, in both cases, we have the existence of strong authoritarian states with ample autonomy to discipline the society as a whole, with wide leverage to define economic development plans and projects to which the ruling and ruled classes must adhere, and the capacity to subject the latter group to a prolonged and acute process of overexploitation.

In other words, the path to capitalist development for underdeveloped economies in the twentieth century and early twenty-first has only been possible for countries that have long defied the simplistic tendencies of the invisible hand of the market, with a set of exceptional conditions that would be difficult to repeat. For this reason, it is self-evident that China and South Korea are not the model for Latin American countries to follow, a statement that some have attributed to the tenets of dependency theory (Kornblihtt, 2012).

Only after building a solid foundation (with the capacity to appropriate the value created in other economies) can the door open for the market and the trends of capitalist accumulation to gain autonomy and even then, they need the nurturing and protection of the State in both local and global affairs.

So what happened in the 1960s and 1970s to make the United States and the international Western community support the development process in South Korea with tremendous aid,4 and what made the country accept these radical measures, such as state control of the financial sector and the implementation of plans where the battered freedom of the market and even of individuals was threatened?

We could also ask if this world capitalist system hegemonized by the United States would accept now a capitalist development project under such conditions. The likelihood that a project of this nature would succeed is scarce to none. One need not be a soothsayer to predict that the United States would not accept it, and I fear much less support it, unless necessary, for any first-level ally or country located in a zone of vital importance, such as the Middle East.

The fact that the United States was in its early years of hegemony and that South Korea had a strategic location (rather than any grand natural wealth) in the Cold War that had recently broke out (South Korea was a buffer to contain North Korea, a few kilometers away from the principal cities of Communist China and also nearly bordering the Soviet Union) are some of the reasons why this exceptional transformation took place in the global system. Some other factors were the aforementioned peculiarities at the core of the South Korean experience that have already been highlighted in this paper.

The early emergence of China as a nuclear power in 1964 is surely another factor that played a meaningful role in the fact that the United States and other imperialist powers were reluctant to interfere in the Chinese development process. Another reason would have been the disputes between China and the former Soviet Union, as the developed center had a stake in these conflicts and would have hoped for an outcome in China's favor, to benefit their own interests.

The role of Confucianism and its relationship to the development of South Korea and China has been interpreted in various ways. Some authors believe that this way of thinking was a barrier to economic modernization because it perhaps grants undue weight to intra-family relationships and culture, while devaluing, on the other hand, trade activities and as a result, only insofar as the two countries moved away from Confucianism were they able to achieve development. Other voices, on the contrary, hold that Confucianism has played a significant role in development, and not only in political terms, because it teaches loyalty to authority, but also in the economic realm, by valuing study and in this way bringing about tremendous leaps in science and technology in a very short time period (Botton, 1997; León, 2002).5



THE INGENUITY OF NEODEVELOPMENTALISM

The power attained by the authoritarian States in defining, directing and implementing development plans in the short and medium terms for the cases here considered, as well as the processes of primitive accumulation sustained by the overexploitation of the workers who made this possible, helps to frame the timid calls of neodevelopmentalists and neostructuralists who want to grant even more responsibility to the State in the economic processes of the region, as well as in wage increases and employment, formulated in a small work known as the Ten Theses, signed in Sao Paulo in September 2010 by a not so insignificant number of Brazilian and Argentine economists, among others from the region, as well as by some from other regions, too ( Diez Tesis, 2012).

In light of the magnitude of the problems the State faced in the experiences of South Korea and China, to say that " markets are the major locus" of "economic development " (both South Korea and China have disproved this) flies in the face of recent history. Even so, neodevelopmentalists insist that "the State has a strategic role " in " providing the appropriate institutional framework to support this structural process." In other words, in the minds of these economists, the market itself brings about development, for which it is necessary to have an institutional framework in place provided by the State for this development to be sustained. All of this, because—according to the neodevelopmentalists—" economic development requires a strategy which seizes global opportunities (...), and creates investment opportunities to private entrepreneurs " ( Diez tesis, 2012).

The neodevelopmentalists acknowledge that the bourgeoisie of the region has done little to nothing to achieve development because—they assume—they have not been given suggestions or signals for the proper strategies to follow (notably, the States analyzed here in this paper were not so kind as to suggest or signal; rather, they obliged participants to follow certain paths). But when this does happen, the bourgeoisie—of course—will now be in a better place to follow. The inevitable question is: And why now? There is nothing in the literature or in the regional experience to point to an affirmative response to this question.

They in turn recognize that the bourgeoisie has done little to nothing for development because it has lacked sufficient investment opportunities, lost in the labyrinth of the market, as if the bourgeoisie had not done precisely this: following their own investment opportunities, to build up the concentration of income in narrow domestic markets tailored to their needs, displacing workers from the market with high rates of unemployment and underemployment or marginalizing laborers with meager wages, and now, setting their sights on foreign markets.

In keeping with the classic formulas and prescriptions of international bodies, where "what the State or entrepreneurs in the region "should" be and do is imposed on "what they effectively are" and do, the neodevelopmentalists describe a series of actions that the State must take to resolve the problem of underdevelopment:1) foster "a structure (...) and financial institutions" that "channel domestic resources to the development of innovation;"2) "development (...) should be financed essentially with domestic savings," for which "public financial institutions to ensure full utilization of domestic resources" are required;3) "government guarantee to provide employment at a living wage (...) to neutralize this tendency to underpay labor;" and4) "pursue full employment," among others.

Facing these new responsibilities, the obligatory question is: what State could actually implement these actions, limited as they are? Because practically all of the States I know of in the region act on behalf of the ruling classes and are subject to the whims of the foreign capital needed to generate earnings. This ends up reproducing a situation with low wages and overexploitation for the vast majority of the working population, so that its products can compete abroad; this paves the way for new and better conditions for foreign investments, discouraging savings, concentrating income, and boosting consumption among social sectors with purchasing power.

It is possible, however, that they are thinking of the need to form some other, novel State or deeply reform the current State. And how would this be done? A task of this magnitude would require having the social and political force to rein in the ruling classes, the major exporters and the players associated with foreign capital, the same foreign capital that operates in our economies, as well as those who produce for the upper echelons of the domestic market, those who pay hunger wages, the political class, the judges and magistrates. Because, moreover, the new State would need new laws that would make it possible to install the new conditions for organizing this collective life.

Refraining from passing judgment on these "small" details, any list of good intentions about what the State "should" do—the State perceived as a machine-thing with its own attributions, where it would be enough to polish it and oil it so it runs well—can never be more than just that: a list of good intentions, of illusions for a State that does not exist in this region and which says little about what type of director we actually want conducting our orchestra.



THE INTEGRATION OF LOCAL PROCESSES AND TRANSNATIONAL CAPITAL

Not a single Latin American economy in the period ranging from the second half of the twentieth century to the present day experienced the convergence of exceptional factors that ushered in development for South Korea and China. The integration of regional productive processes with those of the United States economy and transnational capital and the region's location in a zone of vital security for Washington have limited or prevented these types of processes from occurring in Latin America.

Any will among the ruling classes of Latin America to develop projects with some degree of autonomy—if there ever was any—faded as these classes fostered increasingly close ties with United States capital and foreign capital in general, regularly reviving capital reproduction sustained on the backbone of overexploitation, and the marginalization of broad portions of the working population from consumption, with these trends essentially eliminating any capacity that capital might have to boost the local generation of knowledge and technology (acquired predominantly abroad) and to make the relative surplus the cornerstone of accumulation.

For this reason, the desire to break the cycle of backwardness and underdevelopment is present in the projects of other classes in the region that must confront the rejection of Washington, as well as its destabilizing, if not openly interventionist, policies. It is enough to remember the experience of Salvador Allende in Chile, and how and by whom he was assassinated, to say the least.

The significant role of the State in the experiences analyzed in this paper becomes more relevant when we look at the recent period of enormous gains made by the bourgeoisies and States in Latin America in recent years, as a result of the shocking rise in international prices of the primary goods exported by the region for a sustained time period, as was the case for oil and its byproducts, natural gas, copper, iron, soy and its byproducts, and more, to name a few.

The Latin American and transnational bourgeoisies that benefited from these elevated earnings have only used them to reproduce underdevelopment. In the major regional economies, such as Mexico, Brazil, and Argentina, the State has been highly subordinated to the dynamics of dependent reproduction and the interests of its ruling classes and the foreign capital present in the region.6



A NEW SITUATION FOR THE GLOBAL SYSTEM AND LOCAL ECONOMIES

In the era of globalization, which has brought with it new phases of integration between local capital and productive processes and the projects and interests of global capital, the potential for systemic and local factors to converge to produce processes that would generate development is increasingly unlikely. On the contrary, this integration has only exacerbated underdevelopment and dependency.7

Currently, Latin American economies, hand in hand with local and global capital, have reconfigured the structures of insertion in the international market, based on the production of primary goods and food, with little processing, moving farther and farther away from the twin objectives of developing knowledge and technology. Some countries also produce industrial goods, but in a regional context where the industrial sector has been practically dismantled, if not completely torn apart, reduced to a few segments of global chains that prioritize cheap labor and not knowledge.

In this way, the Latin American economy has been thrown even further off kilter than in the past, lacking an industrial project, with just a few industries, or perhaps small segments, principally related to assembly and the maquila sector, and low production, where the decisions of what and how to produce are made by the headquarters of global companies based in the developed world.

This has been accompanied by the multiplication of new mineral resources exploited in open-pit settings, the destruction of forests and water reserves. The pillaging of our region's wealth in order to boost accumulation has not translated into better conditions of accumulation for development or infrastructure projects in this new economy. Nor has it produced substantial improvements in consumption and the welfare of the majority of the population in the region.

In these circumstances, with so-called globalization, or the conformation of global capitalism (Martínez, 2008), the capital operating in Latin America has further subordinated the region to big capital and central economies, and resulted in the loss of autonomous projects, as the region becomes subject to the caprices of decisions made in global production chains whose sectors cover the world over, at the price of its primary products for exportation, to the benefit of transferring value towards headquarters typically located in the United States or the central economies.8



BY WAY OF CONCLUSION: THE DEVELOPMENT OF UNDERDEVELOPMENT

To describe the exacerbation of underdevelopment and dependency in Latin American economies, insofar as they continued to be organized in terms of capital relations, Andre Gunder Frank coined the notion of the "development of underdevelopment" (1970: 13).

This notion points out that Latin American economies could grow and expand their own development, but as long as they did so pursuant to the logic governing dependent capitalism, this development would only aggravate the problems of underdevelopment.

The entrenchment of underdevelopment or dependency does not necessarily mean that an economy is stagnated or producing negative growth rates, as is often daftly repeated (Astarita, 2010: 7); nor does it mean the absolute worsening of poverty and misery, or the extermination of the local working population as the result of overexploitation, among other superficial descriptions that have caricatured the Marxist dependency theory.

When underdevelopment or dependency becomes further entrenched it means that the particularities of capital reproduction inherent to dependent capitalism are exacerbated. Our economies will continue to grow, a lot or a little, and in so doing, continue to expand the productive plant, cultivate more land, increase the supply of goods produced and exported, and raise investment abroad, but in such a way that only a few social sectors and classes will enjoy the fruits of the social labor contained therein.

The population that does work may be able to access televisions, cell phones or computers, but they will continue to subsist with precarious public health, education, and housing services, with deficient transportation, extended working hours, and the inability to reproduce as human beings working in the twenty-first century and not in the nineteenth; the reproduction of new hands available to capital will forge ahead, sustained by government welfare programs and the efforts of families and survival networks in a world of poverty. Social gaps will widen, as the moral affronts to the masses become increasingly severe, with longer and more intense working hours in the torment of misery.

To summarize, the conjunction of economic, political, and geopolitical processes that made it possible for South Korea and China to achieve development should in no way be interpreted as a prescription for development, as those who suppose it is possible to arbitrarily transfer experiences between regions and nations without taking into account historical particularities would have us believe.

  • Formation of an authoritarian State whose goal is to achieve development and which organizes the forces and resources of its society towards accomplishing that objective.
  • Strong-armed state planning that suppresses even any potential groups that could give rise to an industrial bourgeoisie or other bourgeois factions.
  • Agrarian reform that dismantled the power of rural oligarchies.
  • Severe exploitation of the rural population to strengthen industrialization.
  • Acute overexploitation of the industrial labor population.
  • Access to tremendous monetary support from the United States and other developed economies (in South Korea, at least).
  • Significant resources coming from the Chinese diaspora.
  • Revolution in China that took down the old ruling classes.
  • Enormous labor force oriented towards the production of value, once capitalist planning has been set up.
  • Highly disciplined labor force, both for cultural reasons and the presence of authoritarian regimes that impede or restrict organization and struggles.
  • Rapid conformation of export-oriented production that favors accumulation directed towards strategic economic nuclei.
  • High amounts of foreign direct investment that feeds into accumulation, tied to planning needs.
  • The demands on foreign investors to transfer knowledge and train labor.
  • Strategic location of South Korea during the Cold War era, which explains why it received so much economic and political support.
  • China's early achievement of nuclear power, which limited foreign aggression.
  • High percentages of the budget allocated to Technology Innovation and knowledge creation.
  • Shift from accumulation supported by an absolute surplus to accumulation bolstered by a relative surplus.

Although Latin America has experienced the confluence of authoritarian regimes and intense overexploitation, these factors have only fed the reproduction processes that subordinate the regional economy to the needs and demands of local and foreign big capital.

This is one of the reasons why there is an absence of national development projects and no strong-armed development planning that would subject even the ruling class to achieving this objective.

It also helps explain why the governments in the region do not require that foreign investors transfer knowledge and train their labor.

Whenever autonomous and national projects are proposed or drafted in the region, they run up against the offensive tactics of the United States and the region's own ruling classes, and meet an early end.



BIBLIOGRAPHY

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1 China demands that its foreign investors, particularly those with especially high productivity and working in strategic sectors, train their personnel and teach applied technologies.

2 By 2012, the total stock of Chinese capital abroad amounted to 317.210 billion dollars. This figure is far below the amounts of the big economies, but it is trending upward (Oficina Económica y Comercial de la Embajada de España en Shanghai, 2012). But in 2012, the Chinese economy was ranked third-highest in terms of investing abroad, with 84 billion dollars, coming in only behind the United States and Japan. In fourth place was Hong Kong, also with 84 billion dollars of investments abroad (UNCTAD, 2013: 5).

3 In the first five-year plan (1962-1966), the priority sectors or branches to develop were the energy sector, fertilizer, textiles, and cement; in the third (1972-1976), the productive pillars were iron and steel, transportation equipment, household appliances and shipbuilding (Toussaint, 2006: 93).

4 To the abundant list of United States contributions already mentioned, it should be added that in the first half of the 1980s, in the midst of its own serious financial problems, Japan paid South Korea three billion dollars in war reparations (Toussaint, 2006: 99).

5 This topic introduces a tremendously important historical-cultural dimension into the study of development problems, which is beyond the scope of this paper, but deals with the particularities and differences between and among regions and economies in a state of underdevelopment.

6 Although it was published nearly three decades ago and in spite of its structuralist bias, it is interesting to review the comparison made by Fernando Fajnzylber of the "development styles" of Japan and South Korea as compared to the United States and Latin America (Fajnzylber, 1987).

7 To Samir Amin, this statement contradicts the Marxist vision of the global spread of capitalism that "was in general lines that of a 'recovery' of the backwardness of those recently arrived to the table." For this reasons he maintains that he attempts to "enrich Marx by taking into account (...) that capitalism as it really exists, in its globalized deployment, has produced, reproduced and deepened constantly the polarization between the center and the periphery" (Amin, 2011: 129-130).

8 Ranked by revenue according to Forbes Global, of the largest 50 companies in the world, 19 were in the United States (five of the top ten), eight in China, five in Germany, five in France, two in Spain and two in Great Britain, among the nations with the highest number of firms on the list. See www.deganadores.com/index.php?option=com_content&view=article&id=595:las-. Viewed on February 2, 2012.

Published in Mexico, 2012-2017 © D.R. Universidad Nacional Autónoma de México (UNAM).
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