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The political economy of development
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Dependency and development in Latin America
Fernando Henrique Cardoso and Enzo Faletto
Translated by Marjory Mattinoly Urquidi
from "Dependencia y desarrollo en América Latina", Siglo XXI Editores, 1969

University of California Press, 1979

       Comprehensive Analysis
       Of Development

Development is itself a social process. To the economic assumption that underdevelopment leads to  development through the creation of a dynamic domestic sector capable of generating both self-sustained growth and the transfer of the "decision-making center," some authors have added a sociological interpretation of the transition from traditional to modern societies.

Traditional and Modern Societies

                It is argued that Latin American societies belong to a structural type generally called "traditional," which is giving way to another type of society called "modern."(1)  It would appear that before becoming modern a society enters an intermediate, hybrid pattern called "structural dualism."

          1. This analytical approach stressing the passage from a traditional to a modern society is related specifically to Latin America

    and that this pattern is characteristic of' , developing' , countries.(2)
          This scheme is a reincarnation of the classical "community-society" , dichotomy formulated by Tonnies. It is open to criticism from two points of view. On the one hand, the concepts of "traditional" and "modern" are neither broad enough to cover all existing social situations nor specific enough to distinguish the structures that define the ways of life of different societies. On the other hand, these concepts do not show how the different economic stages (for example, underdevelopment or development through exports or through import substitution, etc.) are linked to the various

by R. Redfield in The Folk Culture of Yucatan (Chicago: University of Chicago Press, 1940). B. Hoselitz later gives it a decidedly sociological orientation in Sociological Factors in Economic Development (Glencoe: Free Press, 1960) and applies it to Latin America in Contribution to the First International Conference in Economic History: Stockholm, 1960 (The Hague: Mouton & Co., 1960). Gino Germani is possibly the Latin American who has best set forth this approach in, for example, his Politica y sociedad en una epoca de transicion (Buenos Aires: Paidos, 1962). It should be noted that Talcott Parsons, The Social System (Glencoe: Free Press, 1951), and Robert K. Merton, Social Theory and Social Structure (Glencoe: Free Press, 1949), have decisively influenced the formulation of this type of development analysis. Furthermore, Daniel Lerner, in The Passing of Traditional Society: Modernizing the Middle East (Glencoe: Free Press, 1958), states in more general terms -that is, not oriented toward the problem of development- the traditionalism and modernism approach in an analysis of the processes of social change. The psychological aspects of the passage from traditionalism to modernism are discussed by Everett Hagen, in On the Theory of Social Change (Homewood: Dorsey Press, 1962) , and by David McClelland, in The Achieving Society (Princeton: Van Nostrand, 1961).
      2. For the concept of structural dualism in this context, see Jacques Lambert, Le Bresil: structure sociale et institutions politiques (Paris: 1953), and from the viewpoint of an economist, Albert 0. Hirschman, The Strategy of Economic Development (New Haven: Yale University Press, 1958).

  types of social structure that are attributed to "traditional" and "modern" societies.
        With this kind of characterization it continues to be impossible to explain the transition from one type of society to another. In fact, change in social structures, far from being only a cumulative process of incorporating ne "variables," involves a series of relations among social groups, forces, and classes, through which some of them try to impose their domination over society .(3)
         In purely economic terms, the degree of development of a production sector can be analyzed through a group of variables -the relation between the number of workers and capital, industrial output per added capital, and so forth- that reflect the process of structural diversification of the economy. Using this analysis as a base, the structure of society is deduced principally from the pattern of income distribution and the structure of employment. However, this strictly economic analysis can only be related to political and social development by looking beyond the social structure to its process of formation and to the social forces exerting pressure to maintain or change it.
        Analyses that relate development to modern society and underdevelopment to traditional society are too simple. Development and modernization are not necessarily related just because domination in developed societies excludes "traditional groups." It may happen that a society modernizes its patterns of consumption, education, and so forth without a corresponding advance in development, if by development we understand less dependency and self-sustained growth based on the local capital accumulation and on the dynamism of the industrial sector .

       3. See for example Peter Heintz, Analisis contextual de los paises latino-americanos (Berkeley: mimeographed edition) .

Social Change: External Models, Demonstration
 Effect, and Specific Situations

In almost all theories of modernization it is assumed that the course taken by political, social, and economic systems of  Western Europe and the United States foretells the future for the underdeveloped countries. The "development process" would consist in completing and even reproducing the various stages that characterized the social transformation of these countries.(4) Therefore, the historical variations, the specificities of each situation of underdevelopment, have little value for this type of sociology.
      It would be naive to assume that Latin America is in the nineteenth century while the developed countries are in the twentieth. More frequently, the underdeveloped countries are described as being "backward" in certain aspects of their structure although not in others. Thus, labor unions in countries like Brazil and Argentina became national and influenced decisions on wage levels during a phase that was abnormal by comparison with what had occurred in the countries of "early development."  Accelerated urbanization in Latin America, which has come before industrialization, has helped to spread expectations and forms of political behavior that encourage greater participation of the masses in the power game before there is autonomous economic growth based on a domestic market. Such popular demands to share in the decisions affecting consumption are considered by many authors a "precocious" datum in the development process of Latin America.
      It has been suggested that, because this level of participation is supposedly similar to that of the central countries,

    4. See especially W. W. Rostow, The Stages of Economic Growth, A Non-Communist Manifest (Cambridge: Cambridge University Press, 1962); Wilbert Moore, Economy and Society (New York: Doubleday, 1955); Clark Kerr, et al., Industrialism and Industrial Man (Cambridge: Harvard University Press, 1960).

   it might serve as a kind of bridge tending to approximate the social patterns and value orientations of the underdeveloped societies to those of the developed, modernizing them, even if not assuring similar levels of economic growth. This, broadly speaking, is what has come to be called the "demonstration effect": the modernization of consumption patterns, implying some degree of income improvement for urban population.
In an economic analysis. the "demonstration effect"
assumes that the economy will be modernized through consumption and that ultimately modernization alters the production system in such a way that it may deviate from the "stages" of industrialization characteristic of advanced countries. But since investments depend to a large extent on domestic savings, the modernizing pressure of consumption can act also as a brake on development: it may stimulate the importation of consumer goods orienting the utilization of savings to the payment of external producers, as well as induce investment in sectors that are not basic to the economy.
         On the other hand. the "demonstration effect" has not been thought of only in economic terms. Presumably, the pressures to modernize consumption are also pressures to change other aspects of human behavior -in the political and social areas- before diversification of the production system is completed. It should be stressed that the "demonstration effect" took place, at least until the sixties in the case of  Latin America, because there was a minimum participation of the people in the political process. Sociological analysis should explain this measure of modernization to avoid simplistic interpretations that take "demonstration effect" by itself as "causal" explanation of the developing process. This kind of approach amounts to saying that the dynamism of underdeveloped societies derives from external factors and that the structural particularities in underdeveloped countries produce forms of development that are deviant cases when compared with classic stages of growth.

       Rather than stressing the consequences of the "demonstration effect" or of other exogenous variables as a "modernizing factor" in the functioning of the economic system or in the behavior of social groups, it is important to study the historical-structural contexts in which such a process is generated since they reveal the very meaning of such modernization. We have therefore emphasized the specifics of the Latin American situation as principal conditioning factors in the development process. In this approach, the "demonstration effect" is incorporated into the analysis as a subordinate explanatory element. It is more basic for us to describe the relations among social groups at the national level, which of course also depend on linkages between the economic system and the international political blocs.

Structure and Process: Reciprocal Determination

To analyze development properly, we must consider in their totality the "historic specificities," both economic and social, underlying the development processes at the national and international levels. Within given structural situations, we must understand the conflict between social movements that are "set in motion" by social classes in developing societies. Our approach must examine not only structural conditions and the ideologies of the social movements, but also their relations and their reciprocal determination.

      How can we link the economic and social components of development in an analysis of the behavior of social groups? First of all, every economic link is, by itself, a social link. Capital itself is the economic expression of a social relation; it requires the existence of a set of persons working by wage -selling its labor force- and another group owning machines and money to buy raw material and to pay wages and salaries. On the other hand, such an "economic" relation suposses not only exploitation -and thus social mechanisms to assure domination- but some degree of stability and recurrence in the relations of exploitation. Then this form of relation has

a structure. Nevertheless, if structures already built appear as a mechanism that promotes the "natural" reinforcement of a given social order, they have in fact been built as a result of social struggles and are, in that sense, a historical product. Consequently, economic relations and the social structures on which they are based have to be studied as a process through which different classes try to sustain, preserve, or change interests rooted in social structures. Development results therefore from the interaction and struggles of social groups and classes that have specific ways of relating to each other. The social and political structure is modified insofar as new social classes and groups succeed in imposing their interests on or accommodating them to previous dominant classes in society

      Social change depends on historical alternatives. In the tensions between groups with divergent interests and directions, it finds the filter through which the purely economic influences have to pass.(5)

      Our basic theoretical problem is how to determine what forms the structures of domination will adopt, because through these structures the dynamics of class relations may be understood. Political institutions at a given moment can only be fully understood in terms of the structures of domination because these express the class interests behind political organization. These structures also make it possible to follow the process of change at the political-institutional level. Significant historical changes in the process of Latin American development have always been accompanied, if not by a radical alteration of the structure of domination, at least by the adoption of new forms of relations and, consequently, of conflict between classes and groups. In that sense, the oligarchical period characteristic of the export economy drive

   5. For an analysis of this point of view, see F. H. Cardoso, Empresario industrial e desenvolvimento economico no Brasi/ (sao Paulo: Difusao Europeia do Livro, 1964), chapters 1 and 2.

was replaced, for instance, by the "populist" period of soaring industrialization oriented toward internal markets. In the case of economically dependent countries, the explanation of structures of domination involves establishing the links that may exist internal and external determinants. These links should not be understood in terms of a mechanical and immediate determination of the internal by the external: it is important to delineate the interconnections between these two levels, suggesting the ways through which external factors are interwoven with internal ones.

      The concept of dependence tries to give meaning to a series of events and situations that occur together, and to make empirical situations understandable in terms of the way internal and external structural components are linked. In this approach, the external is also expressed as a particular type of relation between social groups and classes within the underdeveloped nations. For this reason, it is worth focusing the analysis of dependence on its internal manifestations.

      Because the purpose of this essay is to explain the economic processes as social processes, it is necessary to find a theoretical point of intersection where economic power is expressed as domination, that is to say, as politics. An economic class or group tries to establish through the political process a system of social relations that permits it to impose on the entire society a social form of production akin to its own interests; or at least it tries to establish alliances or to control the other groups or classes in order to develop an economic order consistent with its interests and objectives. The modes of economic relations, in turn, set the limits of political action.

      Thus the topics to be dealt with are the economic factors conditioning the world market; the structure of the national production system and the kind of linkage it has developed with the external market; the historical-structural shape of such societies, with their ways of assigning and maintaining power; and above all, the political-social movements and

processes that exert pressure toward change, and their respective orientations and objectives. Direct analysis of the main socio-political processes in underdeveloped or developing societies is an immense and limitless task. Nevertheless, there are certain topics that, although of a particular character, throw light on the overall situation. In particular, it is illuminating to look for the points where the economic system intersects with the social system, which will indicate the links and dynamics that affect the possibility of development.

         By and large, the problems of social control of production and consumption are the axis of a sociological analysis of development viewed from this perspective. The sociological interpretation of economic change requires analysis of tensions between social groups which reveal what supports the economic and political structure.

         Although it is now fashionable to analyze "decision- making mechanisms" from this angle, no sociological view of the problem of development can be reduced to this approach, because it misses the point that is crucial for us: social forces and structural determinants behind political processes.

Development always alters the social system of domination as it changes the organization of production and consumption. It cannot be reduced to changes at the institutional level or to the analysis of actors' value orientations. This view of the problem encourages us to analyze the political behavior of social classes that maintain control at the structural level and those that oppose such control. Moreover, it moves us to consider the value orientations that give the action its framework of reference, not at the individual level, but at the cultural one, as ideologies.

Underdevelopment, Periphery, and Dependence

The historical specificity of the situation of underdevelopment derives from the relation between "peripheral" and "central" societies. Underdeveloped countries must be distinguished from those without development: the latter are economies and peoples -fast disappearing- that do not

have market relations with the industrialized countries. As for underdevelopment, in some situations the linkage between the peripheral economies   and the world market can be described as "colonial," whereas in others the peripheral economies belong to "national societies." In the latter case some peripheral countries already had a national society when they formed links with the more developed dominant centers, while others were colonies that became nations but without any change in their situation of underdevelopment.

        In any event, the situation of underdevelopment came about when commercial capitalism and then industrial
capitalism expanded and linked to the world market nonindustrial economies that went on to occupy different positions in the overall structure of the capitalist system. Thus, there exists among the developed and underdeveloped economies a difference, not only of the stage or the state of the production system, but also of function or position within the international economic structure of production and distribution: some produce industrial goods; others, raw material. This requires a definite structure of relations of domination to assure an international trade based on merchandise produced at unequal levels of technology and cost of labor force.

       The concept of underdevelopment, as it is usually employed, refers to a type of economic system with a pre- dominant primary sector, a high concentration of income , little diversification in its production system, and above all, an external market far outweighing the internal. This concept will not suffice.

       Understanding the historicity of the underdevelopment situation requires more than just an indication of the structural characteristics of underdeveloped economies. It is necessary to analyze how the underdeveloped economies were linked historically to the world market and how internal social groups defined the outward-directed relations implicit in underdevelopment. Dependence on the socio-political level also began historically with the expansion of the economies of the early capitalist countries. In extreme

cases of dependence, decisions affecting the production or consumption of a given economy are taken in terms of the growth and interests of the developed economies; a typical example is the economy based on a colonial enclave.
          The foregoing argument suggests that the distinction between "central" and "peripheral" economies has greater social significance than that between developed and underdeveloped economies. The former can incorporate immediately the idea of unequal positions and functions within the same structure of overall production. Nonetheless, it would not be sufficient or correct to replace the concepts of development and underdevelopment with those of a central and a peripheral economy, or -as if it were a synthesis of both- with those of an autonomous and a dependent economy. These concepts differ as much in their dimensions as in their theoretical meaning. The idea of dependence refers directly to the conditions under which the economic and political system can exist and function in its connections with the world productive structure. The idea of underdevelopment refers to the degree of diversification of the production system without emphasizing the patterns of control of decisions on production and consumption, whether internal (socialism, capitalism, etc.) or external (colonialism, periphery of the world market, etc .) . The ideas of "center" and "periphery" stress the functions that underdeveloped economies perform in the world market, but overlook the socio-political factors involved in the situation of dependence .
         A society can undergo profound changes in its production system without the creation of fully autonomous decision-making centers. Such was the case when Argentina and Brazil ended the process of import substitution and began the production of capital goods. They had attained a degree of economic maturity, even -as happened to some extent in Argentina- in income distribution. In spite of that, not only is its industrial sector controlled from abroad, but it plays a complementary and subordinated role from the standpoint of the international capitalist system. A national society can

achieve a certain autonomy of decision without thereby having a production system and an income distribution comparable to those in the central developed countries or even in some peripheral developing countries. This can occur, for example, when a country breaks its ties with a given system of domination without incorporating itself totally into another (Yugoslavia, China, Algiers, Egypt, Cuba, and even Revolutionary Mexico) .
       Since there need not be an immediate connection between the diversification of the economic system and the formation of autonomous decision-making centers, analyses should define not only the degree of economic diversification and social differentiation reached by countries that are being integrated into the world market, but also the manner in which this integration was achieved historically. Such an approach calls for great caution in interpreting how the economy of   Latin America has developed and its society has been modernized.
      Various authors have emphasized development as an
"unforeseen result" in Latin America. Some countries, for example, when planning the defense of their principal export product, carried out a currency devaluation policy that had the indirect and not altogether intended consequence of creating favorable conditions for industrial growth. Nevertheless, it would be difficult to claim that the economic diversification achieved in this way -during market fluctuations and without a program for increasing autonomy and changing class relations- can alone substantively alter the relations of dependence. The political sphere of social behavior necessarily influences the form of the development process.
      Thus, in a global interpretation of development, arguments based solely on market incentives and reactions do not suffice to explain industrialization and the economic process. Such incentives or mechanisms to defend the economy can only begin an industrialization process; its continuation requires changes favorable to development in the international

market and, still more essential, elements favorable to a broader measure of autonomy within the socio-political game of the developing countries.
         What we seek are the characteristics of the national
societies that express relations with the outside. The internal socio-political factors -linked naturally to the dynamic of the hegemonic centers- are precisely the ones that may produce policies taking advantage of the "new conditions" or new opportunities for economic growth. Similarly, it is the internal forces that give socio-political scope to the "spontaneous" diversification of the economic system. For example, the traditional dominant groups initially may oppose handing over their power of control to the new social groups that appear with industrialization, but they also may bargain with them, thereby altering the social and political consequences of development. National economic groups are connected with external groups in different ways and with different consequences before and after the development process begins. Moreover, the internal system of political alliances is often modified by international alliances.
        We cannot accurately discuss the development process just from a strictly economic angle when our stated objective is to understand the formation of the national economies. Nor, for purposes of description, is it enough to analyze the behavior of variables -such as productivity, savings, and income rates, and consumption and employment functions- since these depend on structural factors and the historical process of change.
       In the "colonial enclave" situation, the political sub- ordination of the colony highlights the fact that the economic system is directly bound to the political system. On the other hand, when development takes place in "national states," the economic aspect becomes more visible; the political and social hegemony becomes less visible, but continues to influence whatever opportunities for development may appear in the market.

        If it is accepted that market influences by themselves neither explain development nor guarantee its continuity or
direction, then the behavior of social groups and institutions becomes crucial to the analysis of development.

"National Underdevelopment"

        In situations of extreme colonial dependency local history is almost reduced to a reflection of what happens in a metropolis. However, the decision by local forces to rebel against colonialism and to create a nation implies an attempt to influence local history according to local values and interests. Economic links with external markets still impose limits to decisions and actions even after independence. The contradiction between the attempt to cope with the market situation in a politically autonomous way and the de facto situation of dependency characterizes what is the specific ambiguity of nations where political sovereignty is expressed by the new state and where economic subordination is reinforced by the international division of labor and by the economic control exerted by former or new imperialist centers. From a sociological viewpoint, here is perhaps the core of the problem of national development in Latin America.
       "National underdevelopment" is a situation of 
objective economic subordination to outside nations and enterprises and, at the same time, of partial political attempts to cope with "national interests" through the state and social movements that try to preserve political autonomy. Ideological components play some role in the perception of what "national interest" means, as well as in the rationalization about the possibility of the existence of nation-states that have submitted to foreign interests and pressures.
      One of the aims of comprehensive analyses of the
national development process is to determine the links between social groups that in their behavior actually tie together the economic and political spheres. Insofar as, by definition, links of economic dependency imply a relationship between

local and external classes, states, and enterprises, the analyses of local social and political groups must include the connections with international partners. Some local classes or groups sustain dependency ties, enforcing foreign economic and political interests. Others are opposed to the maintenance of a given pattern of dependency. Dependence thus finds not only internal "expression" but also its true character as  implying a situation that structurally entails a link with the outside in such a way that what   happens "internally" in a dependent country cannot be fully explained without taking into consideration the links that internal social groups  have with external ones. Dependence should no longer be considered an "external variable"; its analysis should be based on the relations between the different  social classes within the dependent nations themselves.
          This analysis does away with the idea that class relations in dependent countries are like those of  the central countries during their early development. At the beginning of the development process in the central countries, market forces generally act as arbiter in the conflict of interests between the dominant groups. Thus, economic rationality, measured in money, was made a norm of society; and consumption and investment were limited by the growth of the economic system. Expansion of the system was due to a dynamic group that controlled investment decisions and imposed upon the entire society an orientation based on its own interests. The rising economic class possessed efficiency and consensus in capitalistic terms.
         It was believed that the ruling groups expressed the general interest and that the market functioned adequately as a mechanism to satisfy general and particular interests. Other groups that exerted pressure in order to share in the fruits of "progress" and in decision-making were ignored. Only long after the initial stage of industrialization did the popular classes participate politically and socially in the industrial societies.(6)

       6. See Alain Touraine , "Industrialisation et conscience ouvriere a Sao Paulo," Sociologie du Travail (April 1961)

The national economies in the countries of  "early growth" succeeded in part because they were consolidated at the same time that the world market expanded, so that these countries came to occupy the leading positions in the system of international domination. From this scheme it is evident that "early development," although a very broad and imprecise term, is significantly different from what has occurred in Latin America.
      It has been assumed that the peripheral countries would have to repeat the evolution of the economies of the central countries in order to achieve development. But it is clear that from its beginning the capitalist process implied an unequal relation between the central and the peripheral economies. Many underdeveloped economies -as is the case of the Latin American- were incorporated into the capitalist  system as colonies and later as national states, and they have stayed in the capitalist system throughout their history. They remain, however, peripheral economies with particular historical paths when compared with central capitalist economies.
         Capitalism should be studied in the hope, not of finding how its history may repeat at a later date in the peripheral countries, but of learning how the relation between peripheral and central was produced. Although it is possible to distinguish in the economic history of  Latin America the periods of mercantile, industrial, and financial capitalism, it is important for us to make clear what the relation of dependence meant in each of these phases. It would be senseless to seek how far or how close Latin American economies are from "mercantilism," "industrialism," or "finance" forms of capitalism. They belong to the same international capitalistic system as central economies do. Consequently the history of central capitalism is, at the same time, the history of peripheral capitalism. But specific links between dependent and central economies could have been different in each of the above periods. The same can be argued vis-a-vis analyses about competitive or monopolistic trends in the development of capitalism and its effects on peripheral economies.
       During these different phases of the capitalist process, the Latin American countries depended on various countries

that acted as centers and whose economic structures influenced the nature of  the dependence. For example, Great Britain's economic expansion required some measure of development in the peripheral economies, since it relied on them to supply raw materials. Furthermore, these same economies were part of  the market for its manufactured goods. It was therefore necessary for Latin American production to achieve  a certain degree of growth and modernization. The United States economy, on the other hand, had its own natural resources as well as a domestic market that permitted it a more autonomous development in respect of the peripheral economies; in some cases it even competed with the countries producing raw materials. The relation of dependence thus came to denote control of the development of other economies both in the production of raw materials and in the possible formation of other economic centers. The vitalizing  roIe of the United States in the Latin American economies was therefore less important (prior to the formation of the present multinationals) than the role performed by English capitalism.
     The developing countries are by no means repeating the history of the developed countries. Historical conditions are different. When the world market was created along with development, it was thanks to the action of the "bourgeoisie conquérante." Now, development is undertaken when capitalist market relations already exist between both groups of countries and when the world market is divided between the capitalist and socialist worlds. What at first glance may appear to be deviant forms of the classic development pattern are simply not. When we recognize this, the present socio-economic system in dependent countries may become understandable .

Types of Linkage Between the National Economies and the Market

The rupture of what historians call the "colonial pact" and the early expansion of European industrial capitalism

were the dominant historical features in the formation of the "new nations" in the nineteenth century. Expansion  of the central industrialized economies, first of England and later of the United States, was carried out in the presence of the economic and social systems established by the preceding colonial expansion. Conversely, peripheral national economies fed into the different phases of the capitalist process. The development of a nation exporting a widely consumed product would differ according to whether the phase of capitalism was predominantly competitive or predominantly monopolistic. In the first case, chances are more favorable for local producers to find a place in the market. In the latter case, international monopolies usually try to control local production. In the same way, a country whose economy had been that of a colony of settlement, largely self-sufficient and using abundant labor, would differ from an exploitation colony that was more strictly exploited from the outside: after independence, the former could more easily organize an internal political-administrative apparatus to promote and carry out a "national policy." Furthermore, the physical foundation of a country's economy -for example, the type and possibilities of land occupation or the type of available mineral wealth- would influence the nature of its link with the world market after the period of national formation.
       When Latin America emerged from its colonial dependence and entered a period of dependence on Great Britain, Britain sought support from national producers of export commodities who, because of the growth of their economic base -already under way in the colonial situation-  could effect a new accommodation with emergent dominant forces at world level. Thanks to this they gained, if not absolute control, at least a privileged position in local structures of power .
      In the passage from British to United States hegemony, new factors came into play: growth of the exporting groups was accompanied by a significant growth of the urban sectors of the economies, especially industry. Although the new form

of dependence had explanations outside the nation -it reflects the expansion of industrial corporations at the world level- internal class relations made it possible and gave it shape. The growth of the dependent economic system within the nation was determined, within limits, by the capacity that the internal systems of alliance between classes and groups and the hegemonic position of these alliances over society had to assure economic expansion. The pressure of the masses in recent years to incorporate themselves into the political system has spurred the dynamism of the prevailing economic form: dominant groups have expanded internal markets, and thus it is possible for them to absorb social pressures from below.
              During this "nationalist-populist" period, the popular classes often allied with the new economically dominant groups tried to impose their participation and came into conflict with the systems of alliance existing among landlords and exporting sectors of the earlier situation.
              The industrial group at first appeared in a marginal situation. Nevertheless, it was the only group in the new urban sectors that possessed a real economic base. As the one group that could absorb the urban popular sectors in a productive way, it was strategically situated to establish terms of alliance or compromise with the rest of the social system. This also accounts for its importance in the period following the crisis of the agro-export system.

Toward a Comprehensive Analysis of Development

             There is no doubt that an analysis is needed to redefine, within the context of development, the meaning and functions of social classes and of the alliances they establish to maintain a structure of power and to generate social change and economic growth.
             In developing but dependent countries, social structures reflect the double edge of the economic system: its external links and internal roots. Thus, social dynamics and social conflicts usually express both kinds of interests and pressures,

those that derive from external influences and those that are national. Yet, as we stressed before, foreign interests have internal expression through the action of groups and persons who represent them or have advantages in their presence. It is not necessarily foreign interests that are represented or sustained by "modernizing elites." "Traditional" groups -for instance, large landlords- are often the main sustaining force for foreign interests. On the other hand, after the industrialization of peripheral economies under the control of multinational corporations, previous industrializing spurts have gained continuity and have considerably expanded. This implies the growth of urban working classes, as well as the diversification of social stratification. New middle-class groups -technicians, private and public employers, people devoted to the service sector, professionals, and so forth- have gained strength in society. The strong participation of the state in the economic process of growth has enlarged the participation of bureaucracies and of the  military in Latin American societies. All together these processes show the complexity of the situation of underdevelopment. It gives rise to activities of social groups corresponding to the patterns of' "industrialized mass societies" -as in the case of urban patterns of mass consumption vis-a-vis mass media influence on mass behavior- and at same time to others in which social norms typical of "class situations" prevail. The latter can be seen in the style of political confrontation in crises situations, as well as in the shape and functions of workers unions. Corporatist components of the political system indeed redefine class behavior, as is notorious in the case of unions under authoritarian regimes in Latin America. Sometimes even "state situations" (in the Weberian sense) have importance in the understanding of conflicts and accommodations that prevail: "traditional" sectors of middle and upper classes protect themselves through mechanisms of social identification -clubs, professional associations, and so forth- that are based not on direct economic or market interests but on specific forms of socialization and defense of privileges

based on degrees of education, family origin, and shared values.
       If we admit that those factors of differentiation and complexity are intermixed with the above mentioned multiple links with external societies and economic interests, it is not difficult to see the reasons why analyses of dependency need theoretical efforts to stress specificities.
      The social and economic transformations that alter the internal and external aspects of the underdeveloped and dependent societies are actually political processes that, in present historical conditions, do not always favor national development. Our analysis of social development always assumes the possibility of stagnation and heteronomy. To determine the possibilities of success, it is necessary to analyze not only structure but also the action of social forces -both those that tend to maintain the status quo and those that exert pressure for social change- as well as the "value orientations" or ideologies that are associated with social actions and movements. Since these forces are interrelated and express a market situation with various possibilities of growth, analysis is complete only when the economic and the social have their reciprocal determinations defined at the internal and external levels. -