Peripheral financialization and the transformation of dependency: a view from Latin America

Abstract

A key insight of dependency theorists such as Vania Bambirra and Ruy Mauro Marini was that dependency is not confined to an international relations phenomenon of unequal exchange, but plays out at the level of class relations in the periphery. While emphasising that financialization has exacerbated global uneven development, much of the peripheral financialization literature has disregarded the contributions of dependency theory, whose main object of discussion has precisely evolved around the uneven but combined nature of global capitalist development. Contributing to the pluralization and decolonization of IPE, we revisit dependency theory to analyse peripheral financialization and its political and social impact in Latin America. Drawing on case studies of Brazil and Mexico, we engage with the agency of Latin American ‘dominated-dominant’ ruling classes in reconstructing dependency under financialized conditions. In both cases, power has shifted towards the financial and export-oriented fractions of ruling classes, while financialization has reproduced the key characteristic of dependent capitalism – the super-exploitation of labour. The article updates earlier periodizations of dependency and maps financialized dependence as a new phase of dependency, entailing substantial changes in the role of the state and class relations.

Keywords:

• Financialization
• dependency theory
• Latin America
• Brazil
• Mexico

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 Robert Gilpin returns to dependency theory in The political economy of international relations (1987). Nevertheless, his contribution remains fundamentally limited due to the author’s lack of engagement with the dependency literature in Spanish, in particular the work of Marini and Bambirra.

2 Other sociologists and historians close to the dependency tradition, such as Fernandes (1981) and Donghi (1979) propose a different, yet substantially similar, periodization of Latin American dependent development.

3 For English commentaries on Marini’s thought, see Higginbottom (2010) and Sotelo Valencia (2017).

4 In the international currency hierarchy, the US Dollar, followed by other currencies of the central countries, has a privileged position. This is based on the different ability of currencies to perform internationally the three functions of money - medium of exchange, unit of account (and denomination of contracts), and deposit of value (international reserve currency) - which entails different 'prizes of liquidity' (Andrade & Prates, 2013, p. 409).

5 Non-financial public sector debt, data from ECLAC database.

6 Official minimum wage converted to current commercial dollars in January of each year. Calculations based on DIEESE and Central Bank of Brazil data.

7 This includes agroindustrial exports.

8 In total, imported inputs account for 80% of exports in manufacturing, most of which come from the US. In maquiladoras, 97% of inputs are imported (Guíllen, 2012, 68f).

Additional information

Notes on contributors

Nadine Reis

Dr Nadine Reis is a Professor at Centro de Estudios Demográficos, Urbanos y Ambientales, El Colegio de Mexico. Her research focuses on financialization, urbanization and development in Latin America, especially Mexico. She has published in The Journal of Peasant Studies, Globalizations, and Water Alternatives, among other journals.

Felipe Antunes de Oliveira

Dr Felipe Antunes de Oliveira is a Lecturer in Global Governance and International Development at Queen Mary University of London. His previous publications have appeared in journals such as Latin American Perspectives, Globalizations, Journal of International Relations and Development, Cambridge Review of International Affairs, and Monthly Review.