Metropoles and Satellites: Baran

 Andrea
Gunder Frank, like Baran, was interested in identifying the causes of
underdevelopment, but unlike his predecessor he did not lay great emphasis on
the social classes and their control over the economic surplus (Frank 1967).
Rather, Frank argued that the crucial mechanism for extraction of the surplus
was trade and other kinds of exchange of goods and services, not only
international trade, but also exchange internally in the peripheral societies.

Frank
rejected the dualist conception according to which the underdeveloped countries
comprised two separate economies, one modern and capitalist and another
traditional and non-capitalist. On the contrary, he claimed that capitalism
permeated the whole of the periphery to such an extent that the Latin American
and other peripheral societies had become integrated parts of a one-world
capitalist system after the first penetration by metropolitan merchant capital.
This had established capitalist exchange relations and networks that linked the
poorest agricultural labourers in the periphery with the executive directors of
the large corporations in the USA.

The
exchange relations and the network were described by Frank as a pyramidal
structure with metropoles and satellites. The agriculture,’ labourers and the
small farmers in the rural regions of the periphery were satellites at the
bottom. They were kinked, mainly through trade, to the landowners and local
centres of capital accumulation that is local metropoles. There is turn, were
satellites in terms of regional economic elites and centres of surplus
extraction. in this way the structure grew —through several links — until it
reached the ruling classes and world centres of capitalism in the USA.
Throughout this pyramidal structure surplus was appropriated by the centres
which, in turn, were subject to the surplus extraction activities of higher
level centres.

Wikipedia Image

According
to Frank, empirical evidence showed that the economic surplus generated in
Latin America was drained away. Instead of being used for investment in the
countries of origin, most of the surplus was transferred to the affluent
capitalist countries, especially the USA. Frank’s basic point was that the
satellites would be developed only to the extent and in the respects which were
compatible with the interests of their metropoles. 

And here experience showed,
according to him, that neither the USA nor the other industrialized countries
had any interest in genuine development of the Latin American countries. Much
indicated in fact that precisely those countries and regions which had the
closest links to the industrialized countries were the proportionally least
developed. Therefore, the explanation of under development lay primarily in the
metropole — satelite relations, which not only blocked economic progress, but
also often actively underdeveloped the backward areas further (this being a
process and not a state).

Frank
derived from this the much debated conclusion that all countries in Latin
America as well as other Third World countries — would be better off if they
disassociated themselves from, or totally broke the links to, the USA and the
°thee industrialised countries. De-linking from the world market was the best
development strategy_ This presupposed the introduction of some form of socialism
in the peripheral countries, because the ruling classes, the landowners and the
comprador capitalists could not be expected to bring about such a de-linking
and thus remove the foundation for their own surplus generation.

Frank’s
conclusions, according to both contemporary and later critics, were often drawn
further than the analyses warranted. However, this did not prevent his
fundamental views and conceptions from winning wide dissemination and achieving
considerable impact upon the development debate throughout most of the 1970s. 

Frank’s position in this regard came to resemble that of Rostov in the sense
that they both, for more than a decade, functioned as major reference points in
the debates on dependency and economic grow respectively. Like Rostov, whose
position was gradually superseded by more nuanced and empirically better
substantiated theories within his research tradition, Frank eventually was
replaced by more complex and differentia” attempts at explaining the
reasons for underdevelopment and its dynamics. One of the earliest attempts in
this direction came from Sarnir Amin.

Amin
was one of the first economists from the Third World who acquired a prominent
international position in the development debates, including the debates in Western
Europe and North America. Two of this academic works, in particular,
contributed to this prominence: Accumulation on a World Scale, and
unequal development.

While
Frank chiefly concerned with the conditions and relations of production. Based
on thorough historical analysis of how Europe had under developed large parts
of Africa in the colonial era, Amin worked out two idea-type societal models
with the main emphasis on the structuring of production processes. One model
described as auto-centric centre economy; the other a dependent peripheral
economy.

The
model of auto centric economy has features similar to those included in
Rostow’s description of the industrialised countries in the epoch of high mass
consumption. The auto centric reproduction structure is characterized by the
manufacturing of both means of production and goods for mass consumption,
Furthermore, the two sectors are interlinked so that they mutually support each
other’s growth. Similarly, there is a close link between industry and
agriculture. The auto centric economy is general characterised by being
self-reliant. 

This does not imply self-sufficiency. On the contrary, a highly
developed capitalist economy typically engages in extensive foreign trade and
other international exchange relations. Bur the economy is auto centric in the
sense that the intra-societal linkages between the main sectors predominate and
shape the basic reproduction processes. It is the internal production relations
hat primarily determine the society’s development possibilities arid dynamics.

It
is quite a different matter with the peripheral economy. According to Amin,
this type of economy is dominated by an ‘over-developed’ export sector and a
sector that produces goods for luxury consumption. There is no capital goods
industry, and only a small sector manufacturing goods for mass consumption.
There are no development-promoting links between agriculture and industry. The
peripheral economy is not self-reliant, but heavily dependent on the world
market and the links to production and centres of capital accumulation in the
centre countries.

It
is further part of the picture of the peripheral economy that it is composed of
various modes of production. Capitalism has only penetrated limited parts of
the production processes while other parts, and quantitatively greater ones,
are structured by non-capitalist modes of production. On this point, Amen’s
conception is more in line with Baran’s mode of reasoning and hence, in
opposition to Frank’s definition of capitalism, in terms of exchange relations.
Amin endorsed the thesis that capitalist dominates the periphery within the
sphere of circulation, but he asserted at the same time that pre-capitalist
modes of production continue to exist and that they exert considerable
influence on the total structure of reproduction.

The
distorted production structure in the peripheral countries and their dependence
is a result of the dominance of the centre countries. It is the centre
countries who, by extracting resources and exploiting cheap labour, have
inflicted on the peripheral economies the ‘over-developed’ export sector. At
the same time, the centre countries have prevented the establishment of
national capital goods industries and the manufacturing of goods for mass
consumption. in these areas the rich countries continue to have a vital
interest in selling their goods in the peripheral markets.

If
the less developed countries operating under the circumstances are to initiate
a development process than can lead them in the direction of an auto centric
economy – if they are to achieve growth with at least a minimum of equity in
social and spatial terms – then they must break their asymmetrical relationship
with the centre countries. In its place they must expand regional cooperation
and internally pursue a socialist development strategy.

Amen’s basic notion
of the differences between the pure auto centric economy and the likewise
stylised peripheral economy was taken over by many dependency theorists, but
often with the addition of new dimensions and more nuances. Before considering
these elaborations we shall briefly overview Emmanuel’s – and Geoffrey Kay’s
special contributions to the dependency debate.