Geography Reference
In-Depth Information
A classic example was given by Frank (1967) concerning colonial Chile,
which was a wheat producer for the urban market of Lima, Peru. The trade in wheat
starts with the dependency links from an estate worker on a large wheat farm in
Chile. This worker spends most of his time working on the estate for the landlord.
In exchange, he is allowed to cultivate a small plot for himself. Any wheat he
produces for sale is sold to the landlord, under the contract he has made, and he
cannot sell to merchants who might give him a better price. Thus his dependence
on the landlord is complete. The landlord in turn sells his own and his worker's
wheat to a single merchant in the local town. Again, there is complete
dependence because there is no effective market. The monopoly buyer
(monopsonist) can set the price low because there are no alternatives. This
merchant sells on, probably to another merchant in the port of Valparaiso, also a
monopsonist, who arranges the transport of the wheat by ship to Lima. In Lima,
an official buyer again controls the trade and acts as single buyer. The chain is
completed by a second set of dependency links between Lima and metropolitan
Spain. Spain decrees certain items to be tradeable from Latin America, largely
raw materials, and there are official merchants designated who are responsible for
the trade.
In this way, Frank portrayed a picture of unequal exchanges, in which each
link lower on the chain is paid less than a fair price, and is impoverished by the
higher level, so that Spain (and to some extent Lima) is enriched as the
countryside and the periphery in general are impoverished. The argument
operates at the level of the individual and firm, and also at the level of nations.
The resulting course of interregional differences is a growing trend over time,
followed by the maintenance of a high level of inequality between regions or
countries.
A critique of such a view, in opposition to the neo-classical model, may be
precisely that it does not conform to any model, and by using historical data,
cannot be reduced to simple variables, each case study showing different
situations. Other critiques relate to the problem of whether what Frank described
is capitalism, or in fact historically accurate. A good case might be made that the
conditions of Spain's colonial empire, like those of the other colonial powers at
the time, were those of mercantilism, not capitalism: a highly controlled
economy, with the mother country placing limits on the objects traded, on the
partner countries allowed to trade, and on the merchants licensed to conduct the
trade. Mercantilism gave way to more open systems in the nineteenth century. A
standard criticism of the model is that it focused on trading relations rather than
on production, and that trade alone could not be an explanation of either
development or underdevelopment. For many countries, such as the thinly
peopled ones of North America and Australasia, the production of goods from
their vast resources was of vital importance, as well as trade. Another critique,
coming from within the left-wing school to which dependency belongs, was that
it failed to look at class divisions and the conflict of classes, in classical Marxist
manner.
