How CEPAL’s Latin American Theorists Changed Our Understanding of the “Third World”

In the mid-20th century, theorists affiliated with the Commission for Latin America and the Caribbean argued for an international division between the world’s “center” and the “periphery” — terms taken up by Latin Americans to explain and fight exploitation.


General view of the inauguration of the 37th session of CEPAL on May 8, 2018 in Havana, Cuba. (Yamil Lage / AFP via Getty Images)

In 1948, the United Nations created the Commission for Latin America and the Caribbean (CEPAL by its Spanish acronym) to support the region after World War II. Its leading figures developed the notions of “center” and “periphery” to explain the international division of labor and position of “Third World” countries in the global economy. This theory quickly spread across Latin America and the world, inspiring working-class and leftist intellectuals to develop dependency theory, world-systems theory, and more.

For Jacobin Radio’s podcast The Dig, Daniel Denvir spoke to Margarita Fajardo, a professor at Sarah Lawrence College and author of The World That Latin America Created: The United Nations Economic Commission for Latin America in the Development Era, to discuss the origins of CEPAL, the political shift of its intellectuals, and its influence on other theorists across the world. You can listen to the episode here. This transcript has been edited for length and clarity.


Daniel Denvir

Argentine economist Raúl Prebisch developed two insights that shaped CEPAL. The first was that the global economy was divided between the “center” and “periphery.” The second was that the primary commodity — exporting economies on the periphery faced declining terms of trade with the industrialized economies in the center. Explain these two interrelated insights.

Margarita Fajardo

“Center” and “periphery” refer to the global inequality that sprung from the international division of labor. The periphery produced commodities, raw materials, agricultural products, and mining products for the world’s industrial center, which manufactured capital goods that the periphery then bought.

The center-periphery relationship became an obstacle for economic development when the prices of primary products or commodities fell in the long term in relation to the prices of manufactured goods. This brought the belief in the advantages of specialization in international trade — the very principle of nineteenth-century [economic] liberalism — into question. Practically, it also meant that the incomes of countries on the periphery in Latin America, Africa, or Asia would not be able to catch up to those of countries in the center.

Daniel Denvir

Center and periphery sound like familiar Marxist concepts now, but Prebisch developed these ideas while working for La Sociedad Rural Argentina, the association of the country’s largest agricultural exporters, and Argentina’s authoritarian government as its central banker. Meanwhile, Marxists in Latin America were more interested in studying feudal structures and domestic economics.

Where did Prebisch fit into economics and the intelligentsia, and what did he draw on to develop his analysis?

Margarita Fajardo

Even though Prebisch was a professor, he was not really an academic. He was an economist working on the practical problems of a policymaker. He first used the notions of center and periphery to refer to how money flowed in and out of the periphery during capitalist cycles. It was a constrained concept that had nothing to do with Marxism. But, in this early context of revision, he could have been exposed to Marxist terms or ideas, even if they did not influence him.

Dependency theory, which emerged in the 1960s and early ’70s, argued that some of Prebisch’s ideas were explicitly connected to Marxism. But there are debates about whether dependency theory is even Marxist that persist to this day.

Daniel Denvir

CEPAL’s participants, cepalinos, believed that the solution to peripheral economies’ entrenched structural disadvantage was trade with and aid from the center. This solution, you write, amounted to “the periphery’s development paradox: the need for more trade and aid to withstand the long-term dependance on trade and aid.” Why did cepalinos think that trade with the center would resolve problems caused by trade with the center, and what role did they think aid played in breaking out of the development paradox?

Margarita Fajardo

First, to define the development paradox, cepalinos thought that industrialization in the long-term would shield economies from the vulnerabilities of trade. In doing so, it would transform the center-periphery relationship and the global economy. But in the short term, industrialization required larger amounts of foreign exchange: more expensive goods, like more sophisticated machines, would be needed to keep up with industrialization and produce more sophisticated goods. Therefore, you would have to trade even more to continue with the industrialization process.

This is the paradox: what helps you solve your problem actually creates and deepens the issue that you’re trying to solve. Cepalinos thought that commodity trade agreements, price stabilization mechanisms, or aid could compensate for this by bridging that gap between the ever-increasing need for imports and the ever-decreasing value of exports in terms of both prices and volume. To solve the development paradox, they proposed better terms of trade that served the interests of periphery nations as a compensatory mechanism.

Daniel Denvir

CEPAL was established in Chile as a United Nations agency in 1948. How did Latin America establish a regionally specific body within the UN? What perceived need was it responding to within the brand new international political institution, and why did the great powers go along with it?

Margarita Fajardo

Latin American representatives saw a space opening up where there was none. Regional commissions were established for war-torn regions like Europe and Asia. Leaders justified veering from the UN’s internationalist discourse and adopting regional organizations within the institution because there was an emergency and an urgent need for reconstruction.

A Chilean diplomat saw these commissions and thought that they could serve as the institutional precedent to advocate for a similar organization for Latin America. So, they requested an organization for Latin America based on the premise that Latin America had suffered, faced economic difficulties created by the war, and participated in the war effort by providing key commodities and products cheaply.

When the IMF [International Monetary Fund] and the World Bank were created, there was supposed to be a third international organization: the International Trade Organization (ITO). This organization never materialized, and CEPAL started to fill that vacuum. It became a site for discussions about the role of international trade in development and the economic order.

Daniel Denvir

Alongside Chile, CEPAL also took root in Brazil. Celso Furtado, a young economist, influenced the developmentalist administration of Getúlio Vargas. How did cepalino ideas gain so much influence in Brazil, and what did cepalinos accomplish with that influence?

Margarita Fajardo

Their influence in Brazil arose from the networking and institution-building role of intellectuals. [Furtado] brought cepalino ideas to Brazil and made them a part of the state’s development institutions through his roles in policymaking.

There was also demand for cepalino ideas. Some say that this was the time for economic nationalism and that CEPAL acquired a lot of influence because it legitimized the ongoing processes of industrialization. This is true but only part of the answer. It was not just about industrialization.

Rather, the idea that cooperation, better trade agreements, and aid were needed in addition to industrialization appealed to policymakers. Cepalinos’ preoccupation with both the long-term effects of international trade on development and the short-term effects, which we can see from their interest in inflation and having enough foreign exchange to solve the development paradox, resonated in Brazil.

Daniel Denvir

The Organization of American States (OAS) Economic Forum took place in Brazil in 1954. Cepalinos put forward a comprehensive developmentalist proposal for Latin America, which included guaranteed prices and markets for Latin American exports in the center, economic development in peripheral countries through import-substitution industrialization, and new lending criteria for the International Bank for Reconstruction and Development and the Export-Import bank. You write, “Whereas international development organizations understood monetary stability as a prerequisite to lending, cepalinos insisted that lending was necessary for monetary stability.”

CEPAL won over most of the representatives from across Latin America, but the [Dwight] Eisenhower administration blocked their proposal. What were the stakes of this forum, and why did the US oppose what CEPAL was putting forward? What were the consequences of  US opposition?

Margarita Fajardo

The conference was CEPAL’s coming-out party. They didn’t just make piecemeal suggestions; they proposed a comprehensive plan, which they presented as a development platform.

The conference also showed the confrontation between the OAS and CEPAL. The OAS had an Inter-American Economic and Social Council. When CEPAL was created, some US policymakers and UN representatives argued that this council made CEPAL irrelevant. They said that there was no need to create another institution that had an economic mandate for the region because one already existed. The 1954 OAS meeting was a test of this conflict. In many ways, CEPAL won the match: it took over the organization of the meeting and managed to set the agenda of the discussion.

The US blocking the initiative did not transform much because it was expected. There were signs of a change in US policy through leaks and announcements beforehand.

Daniel Denvir

In other words, what was more important was that CEPAL began to win the battle for ideas within Latin America.

Margarita Fajardo

Yes, that’s why the conference was important regardless of the position of the US. But cepalinos did expect the US to take the role that it aspired to have, and the battle to try to get the “center” to cooperate in a way that cepalinos thought it had promised to do when it established itself as a hegemonic power continued for four more decades.

Daniel Denvir

As CEPAL waited for cooperation from the United States, it looked to regional cooperation and integration, starting with the El Salvador–led economic integration of Central America and a payments union that would solve Latin American governments’ problem of hard currency limits.

But you write that regional integration ran into the “unresolved contradiction of the unequal trade relations between centers and peripheries within particular Latin American countries.” Then, the IMF blocked the proposed payments union, insisting that it could and should do whatever was needed. What promise did regional integration hold for cepalinos?

Margarita Fajardo

Cepalinos were talking about taking advantage of economies of scale. National markets were too restricted and small to feasibly get up to the harder levels of industrialization. So cepalinos believed that regional integration could allow them to do that.

A lot of policymakers remarked that successful [economies] had a continental-wide size, specifically looking to Europe and the US’s industrialization. It applies to the Soviet Union in the same way. Cepalinos thought, “Size matters, and we need bigger markets for our products.”

Daniel Denvir

Also, Latin American countries did not have a lot of trade relations with each other at the time.

Margarita Fajardo

They did not in the mid-twentieth century. This changed by the twenty-first century, but at the time it was important for them to establish those trade relationships and barter-like agreements that could circumvent the need for hard currency. If they could trade with each other without using hard currency, then hard currency could be saved for future projects of development, and they could invest in machines or more expensive capital goods.

Daniel Denvir

But at this point, cooperation from the center wasn’t forthcoming, and regional integration wasn’t working either. Were Prebisch and other cepalinos getting frustrated?

Margarita Fajardo

Their whole project started with frustration. When cepalinos began their project, the development paths of many large Latin American countries like Chile, Brazil, Mexico, and Argentina were moving from the easy stage to the difficult stage of industrialization. That’s why cooperation was crucial at this moment: they needed to make the leap to the other stage. But the changes that they thought needed to happen quickly were not happening.

Despite their frustration, they kept working on the same project for decades. So they were still hopeful that they could transform these economies.

Daniel Denvir

Cepalinos initially saw the IMF optimistically as a global Keynesian entity, but the two institutions soon came into conflict around the issue of inflation. Cepalinos articulated a structural account of inflation, identifying its roots as unequal terms of trade and unequal land tenure. The IMF, on the other hand, blamed rising wages for rising prices and insisted that austerity was the only solution. In response, cepalinos accused IMF leaders of being monetarists.

How did this conflict between CEPAL and the IMF over inflation emerge in the 1950s? What were the political stakes of their differing interpretations?

Margarita Fajardo

I argue that the conflict started as a battle over power and influence before it became ideological. The IMF took a sidestep from European integration because the Marshall Plan had come in and made European integration a process of bilateral relations with the US rather than part of the IMF’s internationalism. So developing countries became the IMF’s most important clients, and Latin America became a battleground for CEPAL because it was within the IMF’s scope.

The two institutions were trying to assert themselves in Latin America. They battled over what the appropriate scope for each institution was. Could CEPAL make proposals, like the monetary payments union they put forward in the mid-1950s, or would that encroach on the scope of the IMF? The stakes of these institutional battles were that they defined the relationship between inflation and growth.

Daniel Denvir

Ironically, Prebisch was a monetarist and held a conservative worldview. What happened in the 1950s to bring this conflict over inflation to a head in Chile, and how did that conflict propel CEPAL to the Left — the side of an increasingly organized working class, and against Prebisch’s theoretical and political line?

Margarita Fajardo

In the 1940s and ’50s, Chile sustained a high level of inflation, which increased the cost of living. Cepalinos contested the incursion of other experts into the Chilean arena and asked, “How can we have CEPAL’s headquarters here while not being the ones leading the discussion around inflation?” These cepalinos wanted to be important actors defining inflation in the economic policy arena.

What became the cepalino approach to inflation began as a split between cepalinos. Prebisch was a leading figure, and other cepalinos began to contest his positions, especially his decision to work for the authoritarian regime in Argentina. They also began thinking that there might be other ways to explain inflation that did not relate to the quantity of money and instead returned to the premises of the cepalino project: the position of Latin America in the periphery and the international division of labor.

Prebisch blamed wage raises for increased inflation. This was not a monetarist understanding; it was the mainstream understanding and the prevalent Keynesian idea about inflation at the time. But cepalinos advanced a structural approach to inflation. They said the first driver of inflation was lagging agricultural sectors, which did not produce enough food to feed the population. The second driver was the impact of being on the periphery; volatility came into the economy via the exchange rate, which generated inflation.

This structural approach was initially a holistic, middle-ground position and a return to key cepalino tenets. But the approach’s effects in the late 1950s and early ’60s in Chile and Brazil radicalized what the structural approach meant. As people started using cepalino ideas against stabilization plans, the structural approach to inflation set them on the political left. But there were also forces that pulled them to the right. Cepalinos were navigating the polarized arena in Latin America and were transformed by it.

Daniel Denvir

Things only got more uncomfortable for CEPAL at the beginning of the Cuban Revolution, which was both a product and a cause of renewed polarization across Latin America. It created a new left pole for politics in Latin America in the 1960s. The US initially promised to respond by leading a massive region-wide reform effort through JFK [John F. Kennedy]’s Alliance for Progress.

You write, “Although ideologically kilometers apart, both the Cuban Revolution and the Alliance for Progress represented for cepalinos the culmination of their project.” How did these different projects initially speak to, reflect, or even grow out of CEPAL’s critique?

Margarita Fajardo

The center-periphery framework was a powerful idea that could be taken in many directions. It both brought together economists into the collective that we refer to as cepalinos and created paths for different political projects. These projects, despite their different directions, subscribed to the notions of center and periphery and referred to their projects in those terms.

The Alliance for Progress and the Cuban Revolution symbolize cepalinos’ divergence. At stake with both of these projects is their belief that both of them are going to be able to transform the relationship between the center and periphery and global inequality, either via cooperation on the one hand or by breaking away from it on the other hand, like in the Cuban Revolution.

Daniel Denvir

You write that thanks to the dominance of King Sugar, “Cuba represented the quintessential example of the perverse relation between center and periphery that cepalinos had denounced.” Cepalinos initially played an important role in the revolution: they wrote its economic manifesto and set up the revolutionary government’s planning agency.

But ultimately, CEPAL split over the revolution. As an institution, it withdrew as the revolution became explicitly communist. How substantively did CEPAL shape the revolution’s initial trajectory, and then what were the consequences for CEPAL when it broke with the revolution?

Margarita Fajardo

We hear a lot about intellectuals’ interest in the revolution, but they did not have as much of a role as cepalinos did. The economic manifesto that cepalinos formulated set out the revolution’s goals and defined its path along the lines of cepalino ideas: the transformation of the relationship between Cuba and the United States, the reduction of Cuba’s dependence on sugar, the promotion of industrialization, and a shift away from just agriculture.

In this manifesto, they also imagined a role for cepalinos in the revolution. Cuba wanted CEPAL to help create its development plan, so it invited cepalinos to train economists in Cuba and plan techniques. In the early stages of the Cuban revolution, the middle class and professionals were escaping the island, so they needed to train the new generation. Cuba also appointed a cepalino, Regina Botha, as the Head Minister of the Economy.

CEPAL as an institution sent a mission to Cuba, but then it aborted earlier than the Cuban government desired. Latin American countries were debating whether they should support Cuba’s right to self-determination or take a stand against communism, which many leaders feared could take over the rest of the region. Prebisch’s decision to take the cepalino mission out of Cuba before it had finished was interpreted as CEPAL positioning itself against Cuba.

This institutional withdrawal made the intellectual left think that CEPAL was no longer the voice of the periphery and, in its attempt to address global inequality, was not entirely acting on its ideals.

Daniel Denvir

In 1961, Prebisch, Furtado, and other cepalinos embraced JFK’s Alliance for Progress, which was a reformist response to the Cuban Revolution. It appeared to be the cooperation from the “center” that CEPAL had been waiting for. JFK met with Prebisch and asked that CEPAL work with OAS to help each country make development plans. But that was complicated by the Bay of Pigs, which happened a month after the announcement of the Alliance for Progress and scandalized Latin American governments. Then Prebisch and Furtado were both sidelined. The promised program was never implemented.

How did the gap between the Alliance for Progress’s ambitions and its dismal reality emerge? How did the Allinace’s failure and the opposition between revolutionary and counterrevolutioniary projects impact CEPAL?

Margarita Fajardo

The extent to which the Alliance for Progress in its early stages failed is a question. The alliance inspired cepalino projects, including housing projects in Chile, Colombia, and other countries. But despite the projects it inspired and its funding, the gap between what it could do and what it hoped to do was clear from early on.

One of the reasons the Alliance for Progress failed is that it was a political tool; its economic aims were derailed and de-prioritized. People lost faith in it quickly because it was clearly a response to the revolution.

There were others who were worried about the consequences of the revolution, but they were also quickly disappointed because the Alliance for Progress’s ambitions didn’t translate into action. This was partly because of its bureaucracy. There was also a lack of clarity around how to implement its plans. Should it require countries to have development plans? Was there the domestic political will to make them happen? Many of those who [initially] got involved were pulled away because it was clearly a form of influencing domestic policies.

Daniel Denvir

CEPAL lost its sense of direction and legitimacy amid what you call the “twin fiascos” of its relationship to the Alliance for Progress and the Cuban Revolution, and this context helped facilitate the rise of dependency theory. You write that dependency theory was initially developed in Brazil in the years leading up to the 1964 coup by two distinct circles of intellectuals: the Paulistas in São Paulo, which included future neoliberal president Fernando Henrique Cardoso, and the Brasilia group, which included German scholar Andre Gunder Frank.

Dependentistas took CEPAL’s concept of center and periphery as a starting point, but they rejected the notion that the development paradox was a paradox. They instead thought that development could accompany dependency, or it could even underdevelop the periphery. Why did this happen in Brazil, and what were the differences between these two groups’ version of dependency theory?

Margarita Fajardo

The dependentistas emerged partly in reaction to Furtado’s ideas of development. The two intellectual circles were not wholly independent from one another: there were many points of contact and contestation between them. But they did represent two different intellectual projects.

São Paulo was the site of industrialization, modernist architecture, and art in Brazil. By contrast, since its formation, Brasilia planned to reconceptualize Brazil’s territory and shift it away from centers of power that were located in the southeast, where São Paulo is located. The two intellectual circles represented the ideas that came from specific localities and explained Brazil’s future trajectories. Their emergence from different positions in Brazil shaped the strands of dependency theory that developed in the 1960s and early ’70s.

Daniel Denvir

Cardoso argued that “cepalinos had failed ‘to even pose the question of how and why would the Brazilian entrepreneurs, in a country inserted in the global economy as producer of raw materials and primary products, would strive for national autonomy.’” In their naive assessment of the national bourgeoisie’s interests, cepalinos — according to dependentistas — had failed to consider the domestic, political, and economic dynamics of countries in the periphery, including who owned and controlled the means of production. Cepalinos also thus ignored that dependency could deepen alongside development.

Why did earlier cepalinos hold an optimistic view of the national bourgeoisie, and what was dependency theory’s critique of the role that CEPAL had assigned to the national bourgeoisie?

Margarita Fajardo

Cepalinos envisioned the bourgeoisie as the leading class in the process of development. Their vision of development was rooted in the idea that the nation and the relationships between nations were the spaces of development. The dependentistas instead thought about the transnational role of capital and argued that the links of capital between nations united them all.

The cepalinos’ optimism in the power of the national bourgeoisie also emerged from their lack of attention on emerging internal power structures and class relations. They believed that the state could act as an arbiter — an embodiment of the different classes and their interests — that could guide the bourgeoisie.

Daniel Denvir

Gunder Frank argued that the problem of development originated before the nineteenth-century international division of labor. Instead, he contended that it began with the Spanish and Portuguese conquests. Why did he argue this, and what was at stake in the debate over the origins of the center-periphery dynamic?

Margarita Fajardo

Gunder Frank critiqued cepalinos for looking for the origins of the inequality between “center” and “periphery” in a deviation from the norm of capitalist development, which they thought provided benefits for all participants of trade. He instead said that the origin of the problem was embedded in capitalism itself. This critique connects to the question of the origins of capitalism and which elements we use to identify its origins.

There remain debates about [the nature of] the euro-centered world economy of the early modern era. Some think that we can hardly say that Latin America was peripheral in the early modern era; it was the center of the era of silver capitalism. It produced raw materials in order to insert itself into the global economy, but it was also vital, not just peripheral, for the functioning of the world economy.

His critique also intersected with debates around whether Latin America was feudalistic or capitalist in the colonial era and whether its obstacles to development were legacies of that feudal mode of production or instead tied to more structural, systemic world problems as cepalinos proposed.

Daniel Denvir

Decades of revolution sent dependency theorists, dependedistas, and cepalinos on the move. Many Brazilian dependency theorists moved to Chile after Brazil’s 1964 coup. You write, “It was the migration of dependency ideas from Brazil to Chile, at a moment in which the military forces ousted the president in the former and the forces of the Left envisioned a transition to socialism in the latter, that turned ‘dependency theory’ into a radical political movement in Latin America and the world.”

How did the exile of dependency theorists from Brazil and the movement of their headquarters to Chile impact dependency theory and expand cepalino residence both in Chile and across the region?

Margarita Fajardo

First, the transition to Chile reunited Brazilian dependentistas. This reunification meant that their different ideas came to be understood on the whole as dependency theory, even though many of them contested the idea of a unified theory or that they were all part of the same project.

Second, the movement in Chile, where the social sciences were politicized, meant that Brazilians had to place themselves somewhere in the political landscape and align themselves with projects that were fighting for particular positions. The mapping of dependency groups onto academic institutions that had political affiliations politicized dependency theory; many dependentistas moved further to the Left.

These two elements had an impact on the rest of the world. After dependentistas moved from Brazil to Chile for the coup and came together, the Chilean military coup again spread dependentistas and other social scientists who had grown these ideas all over the world. Simultaneously, social scientists and intellectuals around the world increasingly paid attention to the events in Chile under [Salvador Allende] and, later, the coup. These changes in the political landscape explain the interest in and influence of dependency ideas in the region and worldwide.

Daniel Denvir

Gunder Frank’s book The Development of Underdevelopment became the global reference point for dependency theory. That, you write, annoyed Latin American dependendistas. To what extent was their critique of a Latin American theory becoming known through the work of an outsider legitimate? And to what degree was it more a pretext for Cardoso’s political critique?

Margarita Fajardo

There were moments when Gunder Frank’s version of dependency theory prevailed over others and when each group of theorists complained about the other taking more space. Gunder Frank did not [complain] as much as Cardoso. When revolution seemed possible, many were concerned that Gunder Frank was representing Latin American ideas. But when the possibility of revolution faded in the ’70s and ’80s, Cardoso’s version of dependency theory acquired saliency. So both of your suggestions are true.

In the first decade [after the book’s publication], Gunder Frank was definitely the reference point. But as others discovered the origin of the idea, they also cited and quoted dependentistas in Latin America. I think that it is valid to critique Gunder Frank for his oversimplification of ideas and overdetermination of historical outcomes. But, because of his extensive network, he also helped other intellectuals from Latin America become known. He was in contact with academic centers around the world that others didn’t have a reach too. The fact that his work was translated into English contributed to that connection as well.

Daniel Denvir

Prebisch ultimately left CEPAL to lead the United Nations Conference on Trade and Development (UNCTAD) after its creation in 1964. You write that in many ways it was his response to the burgeoning dependency theory. What was UNCTAD created to do, and how was it a response to dependency theory?

Margarita Fajardo

UNCTAD was created to address the problems that international trade created around development for “the peripheries.” It brought together the peripheries of the world in Asia, Africa, and Latin America, to discuss issues of international trade, even though these peripheries were often competing against each other in the market.

It was the mechanism through which Prebisch could take CEPAL’s 1950s development platform to the global level. UNCTAD was inspired by the potential for commodity agreements that could include quotas for certain products, the reduction of protectionism from the center toward the periphery, and the creation of buffer stocks that could avoid fluctuations in trade and provide money for balance of payments.

UNCTAD was a response because it was Prebisch’s way of saying that his ideas were valid and could do more than CEPAL had been able to do. This was a moment during which CEPAL had been criticized for its lack of understanding of the problem of development and the lack of results that its ideas produced. Prebisch thought that CEPAL had lost legitimacy among the intellectual left. In his eyes, the newbies were talking in terms of exploitation and dependency, but he wanted to reaffirm his core issues.

Daniel Denvir

Dependentistas’ power and influence in Chile was crushed alongside the popular unity government with [Augusto] Pinochet’s 1973 military coup. Meanwhile, in Brazil, Cardoso became the leading intellectual opponent to the military regime, but not as a radical leftist. Rather, he made his way into the principal opposition party, the Brazilian Democratic Movement (MDB) and led a liberal opposition to authoritarianism. Then, after Brazil’s transition to democracy, he served two terms as a neoliberal president in the 1990s. How do we make sense of Cardoso’s trajectory?

Margarita Fajardo

Cardoso had been a critic of the development state from the beginning. He criticized the cepalinos for their belief in the development[al] power of the state, the power of the bourgeoisie, and their conceptualization of the nation and the relationship between nations as the space for development.

He was still thinking along these lines under the military regime since it was highly developmentalist. For the first few years it advanced monetarist ideas, but it shortly veered off to continue Brazil’s developmental vocation. So, Cardoso’s position against this regime was also a position against the developmentalist state. When we think in these terms, we can see its continuity with the events of the neoliberal era of the 1990s, during which he was president.

At the time when Cardoso began to oppose the military regime, he would still characterize himself as part of the Left. The Left was broadly defined to include anyone who opposed the military dictatorship; the term had to be broad under the authoritarian [regime]. He was likely considered a member of the Left until the early 1980s.

Daniel Denvir

After the revolutionary heyday and amid the rise of reactionary dictatorship, disillusioned Latin American intellectuals turned against dependency theory. At the same time, dependency theory influenced others across the world, including legendary Egyptian-French Marxist and political economist Samir Amin. Amin, in turn, helped Immanuel Wallerstein and Giovanni Arrighi shape world-systems theory.

What did world-systems theorists learn from dependency theory, and what made world systems theory new and distinct?

Margarita Fajardo

It’s hard to trace a line of influence [between world-systems theorists and dependency theorists.] In the late 1960s, Amin wrote about dependentistas, saying that innovative ways of thinking about the world economy were emerging in Latin America. But it could have been that he and Wallerstein were creating similar ideas from the point of view of Africa at the same time that dependentistas were trying to understand the world economy from the point of view of Latin America.

Wallerstein complicated the world of “center” and “periphery” by adding the notion of the semi-periphery. But both [dependentistas and world systems theorists] were thinking systemically. The dependentistas observed the world using the idea of the internationalization of the internal market and the diffusion of transnational capital. This idea had nothing to do with specific nation-states; it instead focused on the growth of multinational corporations and forms of organizing capital and labor.

Meanwhile, Wallerstein focused on the other historical end. Wallerstein and dependentistas were considering two different ends of the historical process of the world system’s emergence.

Daniel Denvir

You write that “as a result of the endeavors of Amin, dependentistas, and many others, the Third World transformed from a geopolitical to an economic category.” How did the shift from a Cold War geopolitical category to an economic category — which unified oppressed nation-states struggling against the neocolonialist world system — come about? Was it a coincidence that these major Third World–ist economic initiatives took place in the United Nations, just like CEPAL?

Margarita Fajardo

The shift was the cumulative effect of many voices, with CEPAL serving as a crucial one. In the Cold War division, there was the East, the West, and the Rest, the latter referring to the Third World. The “economic definition” refers to defining Third World countries by the position they occupied in the global economy — namely, serving as producers in the international division of labor and specializing in raw materials.

More than the political definition, the economic one had more traction and the possibility of surviving once the Cold War ended. It underpinned the new international economic order, which grew out of the legacies of UNCTAD.

There were attempts for internationalist initiatives made by the Global South using means other than the UN; some were led by Cuba and other countries. But it’s not a coincidence that both of those projects were UN projects: the UN became an institutionalized vehicle and an arena used by countries in the periphery or Global South to make their claims. It had a voice and power that other international organizations did not have. People question whether the UN has concrete effects, but it certainly brought all of those voices together and allowed them to speak on global matters in a way that they could be listened to.

Daniel Denvir

How does this story relate to the emergence of modernization theory, a conservative theory that posited a linear path of progress that would lead all nations to follow the West in their development? And how did dependency and world theorists respond to the ascendance of modernization theory in the US?

Margarita Fajardo

Cepalinos and dependentistas tried to conceptualize development from places other than Europe and the US; they both claimed that countries developing in the mid-twentieth century had a different historical experience than those that developed in the nineteenth century and that there were different paths to development. They analyzed the historical differences [between countries] that influenced their possibilities for development.

Most development thinkers believed that industrialization was the means to achieve development because it was the path that all these other countries had taken. They had been trying to distance themselves from the development paradox with the economic world, but they could not because of both the intellectual tradition and the fact that industrialization was historically proven to bring growth in the nineteenth century. In some ways, they did want to imitate this, even if they didn’t want to follow the same path as those countries. Their goal was similar and they followed the benchmark that those countries had established.

Daniel Denvir

On the US left, when we think of Chilean economists, we think not of cepalinos but of the infamous, neoliberal Chicago Boys who played a key role in the Pinochet dictatorship. But you write, “sponsored by the Ford Foundation, the infamous Chicago Boys, who dominate our narrative of the battle of economic ideas in Latin America, struggled to unseat cepalinos on their home turf and were only successful after a sweeping realignment of political forces in Chile and the use of coercion and violence.” How can we better understand the Chicago Boys when we see that they could only wrest authority from CEPAL through the use of a brutal military regime’s repression?

Margarita Fajardo

The power and influence that CEPAL had among the policymaking elite in Chile made it necessary for a group like the Chicago Boys to form and seek influence. There are more important economic ideas in Latin America than those of the Chicago Boys, even though their ideas occupied the space as well.

On the question of their transition to violence, we don’t have a counterfactual or anything that can show us what would have happened [without CEPAL], but we can trace continuity. After the Chicago Boys and the authoritarian regime, there was a fundamental break in economic ideas in Chile. But many cepalino ideas lived through this regime. Despite cepalinos being crushed in the moment, their ideas didn’t disappear. In fact, some of them were resurrected and implemented during the neoliberal era. So, there are more continuities than we imagine.

Daniel Denvir

You write, “Initially concerned with growth and development more than equity, for cepalinos, the recent demands for better education and health care of a precarious middle class in Chile may seem as first world problems compared to the mid-century battle.”

Have first and second pink tide Latin American governments picked up where dependency theorists left off in their emphasis on both global inequality and domestic inequality? And do Latin American leftist governments still draw on dependency theory and maintain that vision for a progressive regionalism that could reshape the global economy from the periphery along the lines of what cepalinos once imagined?

Margarita Fajardo

Some initiatives that cepalinos put forward during the development era were realized in the neoliberal era. This prompts us to question what the legacies of their ideas were and whether these initiatives came from the same assumptions or simply used similar instruments. The rhetoric of cepalinos and these governments differ; they are obviously not building on that development era, nor are they nostalgic for it. They are more concerned with how to address issues of equality and social development that were not privileged in the past.

Daniel Denvir

To what extent do you feel like the ideas put forward by the cepalinos and dependentistas are still relevant for the predicament of Latin America today?

Margarita Fajardo

These past two years have changed everything, but beforehand, some countries had realized cepalinos’ visions and more or less achieved monetary stability, solving some of the short-term problems created by Latin America’s position in the world economy.

But the long-term problems of Latin America’s position in the world economy still remain, like dependence on the production of agricultural goods, even though those goods are much more diversified than they were in the mid-century. To solve the policy problems that still exist, we need to rethink these categories. But in the broad sense they’re useful categories for analyzing historical and long-term development.