The Dependency School of Thought

The Dependency School of thought had some influence and bearing upon the rise of liberation movements in Central America during the 1960s and 1970s, although the sheer brutality of the dictatorships and militaries which ruled was also a major factor in their emergence. In the context of the global cold war between capitalism and communism, the liberation movements represented a threat to US hegemony in the western hemisphere and had to be put down. Along came US President Ronald Reagan who gave free rein to his dogs of war to do just that, but it would be wrong to credit Reagan with only the butchery that went on in Central America. The Reagan-Thatcher axis was a prime mover in the extraordinary influence of the Washington Consensus in the globalising spread of capitalist relations of production and consumption under what is known as neoliberal economic development. This spread increased in speed through the 1980s and 1990s, and after the fall of communism and the end of the cold war at the beginning of the 1990s, neoliberalism had a honeymoon period in which to dominate Third World nations such as those in Central America without fear of the influence of a competing ideology.

The last decade of the twentieth century witnessed an industrialisation of production that had always failed to happen under the efforts of Central Americans, possibly because the capitalist metropolitan core (Europe and North America) had sufficient control over the capitalist relations of production to keep Central America as a source of primary products, raw materials and cheap labour. The industrialisation that did occur, however, was the result of the globalisation of the production of processed and fabricated goods and still, therefore, deprived Central American people and governments of any degree of control over the production of these goods. This globalised production involved the installation of maquilas, often referred to as sweatshops where pay is worse than poor and work conditions are often appalling. It was not the kind of industrialisation process envisaged by the dependentistas, and it failed to stimulate local production of the raw materials required by the processing. Instead, the raw material for the process was imported (without import tariffs), the material was processed and then exported to some other maquila, probably in another part of the world, for further processing. .

The maquilas needed a plentiful supply of cheap and largely unskilled labour. At the same time the plantations of primary agricultural goods needed more land for expansion and new crops such as the biofuels. The latter displaced many rural inhabitants from their land and means of survival, but supplied the former with their cheap labour after they had been moved from the rural areas.

The maquila industrialisation of production was accompanied by the supermarketisation of consumption, another facet of globalisation.