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Capitalist Development in the Periphery

Paper Session

Friday, Jan. 4, 2019 8:00 AM - 10:00 AM

Hyatt Regency Atlanta, Hanover G
  • Chair: Alejandro Garay-Huaman, Bucknell University

Economic Development from a Marxian Perspective: Main Contributions and Challenges

Juan E. Santarcángelo
National University of Quilmes


Economic development as a discipline began to be studied systematically in the 1950s after the Second World War. Although there were many different explanations throughout history about the causes of backwardness and underdevelopment, the most realistic and sophisticated approaches were based on classical political economy, and in particular of Marxism. Such are the case of Imperialism, Dependency theory, or Unequal exchange. The rise of neoliberalism during the 1970s not only generated a social, political and economic transformation around the globe; but also, it produced the gradually abandonment of these approaches. The purpose of this paper is to account for the transformation that economic development theory experienced from its origins to the present; to analyze the implications of the abandonment of Imperialism, Dependency theory, and Unequal exchange; and to determine the current validity of these theories in order to understand the challenges that underdeveloped countries have.

Capitalist and Non-capitalist Articulation: Peruvian Peasants and Transnational Mining Corporations

Alejandro Garay-Huaman
Bucknell University


Social economic transformation has been usually discussed within the theoretical confines of development and underdevelopment. Marxist literature has emphasized the notions of dependency, modes of production, and imperialism to explain the complex articulation of capitalist and non-capitalist social formations. Yet, these theoretical approaches tend to suppress the complexity of reality, portraying stylized versions of the capital/non-capital interaction. Using a particular Marxist epistemological position (overdetermination) and the Marxian concept of class as a theoretical entry point, this paper seeks to advance an alternative non-essentialist theory of the capitalist and non-capitalist interaction. More specifically, this paper discusses the concept of “extractive imperialism”, which has recently become prevalent among critical scholars studying Latin America and its natural resource dependence. A Global Value Chain approach grounded in a non-essentialist Marxian class analysis is used to specify the various forms of class processes (i.e. capitalist, non-capitalist) and class positions (i.e. fundamental and subsumed) within the gold, silver, and copper mining chain. The latter allows us to analyze the role of imperialist and non-imperialist states, as well as the role of transnational mining corporations, financial institutions, mining workers, and peasants; and the “imperialist” practices of dispossession that emerge from this complex interaction.

Empirical Evaluation of Informal Labor in Latin America, 1990-2014

Jose Galvez
Colorado State University


Informalization of employment is understood as an employment measurement that can potentially capture the extent of low-quality urban employment in the region. Informal jobs are characterized by low income and exclusion from multiple economic, social and political institutions. Following Williams’ approach (2015), the following analysis focuses on the empirical associations suggested by modernization theories, political economy theories and neoliberal perspectives of the formal-informal composition of labor in Latin American cities. The method used is panel data analysis using a combined measure of informal labor proposed by Cornia (2011) and CEPAL’s datasets on low-productivity employment. The analysis focuses on 18 Latin American countries in the time period from 1990 to 2014. Findings include evidence of the association between informalization of labor and structural and political economy factors such as real exchange rates, the profit share and average productivity in different sectors of these economies. These results suggest that a stronger commitment and attention needs to be paid to structural change in the political economy of informalization.

Labor Market Outcomes in Global Value Chains: Wage and Income Distribution Effects of Trade Integration in Developing Economies

Arpan Ganguly
Colorado State University


The export-led industrialization model has had significant implications for the functional distribution of income and labor market conditions (embodied in wages, working conditions, and economic security of the workforce) among countries in the global South. Trade policy perspectives have viewed trade integration as having significant employment effects – growing wage inequality by skill type or coexistence of multiple models of labor relations within a production chain or network. This paper investigates how trade in final goods and intermediate inputs distinctly affects wages (by skill type and sectoral composition) and income distribution in developed and developing economies? Does greater value-chain integration also generate greater relative wage gains for the more skilled in the same manner as trade integration overall? Does trade and GVC integration worsen income distribution by increasing profit shares in income or vice versa? Socio-Economic Accounts (SEA) data from the World Input Output Database (WIOD, 2014) has been used to empirically model the impact of overall and value-added trade on prices and labor productivity and in turn on wages and income distribution. The empirical evidence suggests that more of trade integration is driven by changes in wages of high-skilled labor in developed countries, while trade integration for developing countries is driven by change in wages of low and medium skilled labor. Moreover, trade in intermediate inputs seems to negatively affect labor shares in income thus increasing profit shares in developing countries. This paper argues that contemporary patterns of global trade does not enhance quality of employment in many developing economies, in turn increasing economic insecurity and vulnerability for labor.
Jacob Powell
University of Missouri-Kansas City
Rafed Al-Huq
Hobart and William Smith Colleges
JEL Classifications
  • O1 - Economic Development
  • B5 - Current Heterodox Approaches