Mexico and the World
Vol. 5, No 2 (Spring 2000)
http://www.profmex.org/mexicoandtheworld/volume5/2spring00/crafting_thirdworld.html

Olga M. Lazin

Doctoral Candidate, UCLA History Department

Director, PROFMEX Globalization Studies

Managing Editor,Mexico & the World Webjournal

Book Review

Crafting the Third World:

Theorizing Underdevelopment in Romania and Brazil

Joseph Love

Stanford: Stanford University Press, 1996

SUMMARY

Love’s study compares Romania in the years 1880 to 1945 with Brazil in the years 1930 to 1980, taking the reader, for example, from Europe’s depression of 1873 to Latin America’s recession of 1973. This overlapping periodization is based on Love’s view that there was a "genetic" connection in two major areas: Theory developed in the early 20th century by Romanian thinkers about "unequal exchange" and special problems of "backward" countries was transformed into "dependency theory" by the Brazilian Celso Furtado in his 1948 doctoral thesis at the University of Paris and his 1956 book on Brazil entitled Uma Economia Dependiente. Where we previously thought that dependency theory was invented in Latin America, Love demonstrates that it emerged in Eastern Europe, if under a different name. The bridge from theory in Romania to implementation under the Economic Commission for Latin America (ECLA) after World War II came in the Romanian writings by Constantin Stere (who in 1909 was among the first to stress the "vagabond" nature of modern international capitalism that put large firms outside the control of the state) and by Mihail Manoilescu (whose works in the 1930s had a particularly strong impact in Iberia and Latin America in the 1930s and 1940s). In Romanian debates of the 1920s about the nature of economic development, the ideas that would lead to dependency theory were being fleshed out by Virgil Madgearu (who anticipated analysts in Latin America by more than three decades when he noted that foreign firms could leap across tariff walls to establish their operations within backward countries) and by Dobrogeanu-Gherea (who took up discussions of structuralism, notably his vision of a center-periphery relationship between the industrialized west and its agrarian suppliers of foodstuffs and raw materials.) About the perception of unequal exchange (the Romanian version of dependency theory), Manoilescu "invented" the theory of protectionism in 1929, which he called the "unequal exchange." It was this concept that would be seized upon in the 1950s by Latin American thinkers, who called themselves structuralists. Other ideas such as internal colonialism, modes-of-production (which ostensibly stressed relations of production rather than relations of exchange), and corporatism appeared in Manoilescu’s 1934 book in French on The Century of Corporatism . That book supplied a well-articulated ideology calling for economy and polity to be organized into formal corporations supervised by the state. In modern economic theory, then, Manoilescu is remembered for being the father of corporatism and protectionism. His state- corporatist model developed the basis for a nexus between corporatism and Latin American structuralism that ultimately shaped public policy in much of the Third World. Manoilescu and François Perroux yielded a model of internal colonialism that influenced and shaped during the thinking of Brazilians (such as Roberto Simonsen, Getúlio Vargas, and Fernando Henrique Cardoso--the latter in his earlier statist incarnation). Argentineans (including especially Raúl Prebisch who would found ECLA), Chileans (Aníbal Pinto and Carlos Fredes) and Mexicans (Manuel Ramos.) For Manoilescu the issue was not a "free" economy versus a planned economy because in "backward" countries such as Romania, the economy was already directed by cartels of industrialists. Rather than letting the consumer masses be exploited, Manoilescu preferred the state to assume directorship of the economy because he believed that only the state could act in the general public interest. Love believes that Manoilescu articulated well thebasic appeal of structuralism (in which he called for the state to correct economic imbalances and distortions) that the appeal will not soon disappear. To this end, Love divides his work into three parts: Romania, Transit, Brazil.

COMMENT

Love’s book offers a path breaking approach that shows how ideas move around the world. He not only suggests the relationship of the German Werner Sombart (who beginning in 1902 coined for public discourse the term "capitalism"--a term not know to Marx--as the counterpart to "socialism") but also he examines the rise of ECLA to make Santiago a pole of development against the U.S. economic theory of specialization (in which each county focuses only on what it can do "best" such as agriculture or mining and not upon trying to create industrial production to balance against production of raw materials. ECLA policy led to statism. If Love were to more clearly title his work, it would be: "Crafting the Ideology Behind Third World Statism." It is important to note that for Love the concept and word "statism" does not appear in his index, nor does Love try to show how state intervention imploded everywhere at once in 1989. The value of Love’s work is to show how an ideal to govern the creating of a Third World emerged, that could never exist. Love himself defines the concept "Third World" in two ways. Throughout the book he uses it to mean economic underdevelopment and backwardness. Only in the "Conclusion" does Love see the Third World as involving an alternative path to development that recognizes a new theory or set of options that would allow for modernization without accepting ideas of either the First or Second Worlds. In my opinion, the Second World of Russia came to be the model for most dependistas from Romania to Brazil because it gained world economic power against the First World by ignoring the vices of statism. Ironically, the vices of Russian statism, which came to hold sway in countries where "communism" ruled, surfaced for all the world to clearly see in 1989, when Russian statism imploded beginning in East Germany and ending in Romania.

It is ironic that the fall of the Berlin Wall in 1989 brought an end not only to the Soviet Empire but the also the fall of Ceausescu’s bastion of "dependency theory" in Romania on Christmas Day that year. Since then, in my view (and contrary to that of Love) there is little appeal left to the world in the ideas articulated by Manoilescu. The world of Love had disappeared, almost instantaneously.