At the Standing Group on International Relations (SGIR) 7th Pan-European International Relations Conference in Stockholm (7-9 September 2010) I presented a paper entitled ‘Producing Uneven Development: State Formation, Capital Accumulation and Industrialisation in Latin America’. The paper flipped out of the completion of my new book, Revolution and State in Modern Mexico that provides an account of state power that is both spatially sensitive and attuned to its territorial organisation across different scales in Mexico, while also giving consideration to different counter-spaces and concrete movements of contestation. In this post, I relay one key focus that appears in the book and the conference paper, which is the consolidation of capitalism under Import Substitution Industrialisation (ISI) in Mexico between 1940 and 1954 and the specific period known as stabilised development, from 1955 through to 1972. How is this linked to present concerns about capitalism in developing countries and especially those authors that claim the rise of transnational state processes today? I will address this question through a critical engagement with William Robinson’s transnational state thesis in Latin America and Global Capitalism, which claims that we have experienced the emergence of a transnational state as part of global restructuring processes.

According to Robinson, the transnational state refers to an array of class forces that are bound up with globalisation and embodied in a diverse set of transnational political institutions, including forums such as the IMF, the World Bank, the World Trade Organisation, the Group of Seven (G-7) countries and so on. The transnational state apparatus, so the argument goes, institutionalises the interests of a global ruling class which itself is held to have emerged in an era of global capitalism since the 1970s.

Yet, Vivek Chibber in Socialist Register implicitly questions some of the assumptions linked to this thesis and specifically the notion that national capitalists were simply the single linchpin of rapid development in an era of developmental capitalism that can be distinguished from the current era of global capitalism. To cite Chibber:

Over the past decades a quite powerful set of myths has come to obscure the real experience of twentieth century capitalism in developing countries, papering over the actual dynamics, the roles played by key actors, and their interests.

My argument is that contributions such as William Robinson’s are furthering the continuation of such myths about national capitalists authoring twentieth century capitalism that then enables certain erroneous claims to be made about transnational capitalism today. By delving into how the history of uneven development and state formation was produced under ISI my aim is to reveal insights about the role of state managers, nodal planning agencies, and the consolidation of fixed capital that directly speak to how the class strategies of capitalist accumulation can today be understood. I pivot my engagement with the transnational state argument around three separate questions on Latin America and global capitalism.

Latin America and Global Capitalism: three questions

1) Is the transnational state thesis adequate in keeping the contradictory tensions of both the differentiation and the equalisation of capital accumulation in focus?

Robinson states in Latin America and Global Capitalism that the ‘particular spatial form of the uneven development of capitalism is being overcome by the globalisation of capital and markets and the gradual equalisation of accumulation conditions this involves’ (p. 99). My intervention on this point is that such a statement is remiss in that it overlooks longstanding arguments detailing how the absolute space of state territoriality is not eliminated altogether by the equalising tendencies of capital. To quote from Uneven Development by the geographer Neil Smith:

Space is neither levelled out of existence nor infinitely differentiated. Rather, the pattern is one of uneven development, not in a general sense but as the specific product of the contradictory dynamic guiding the production of space. Uneven development is the concrete manifestation of the production of space under capitalism.

For sure, the transnational state thesis does recognise the continued territorial division of the world by a states-system as a condition for the power of transnational capital. But the thesis of the transnational state is inadequate in capturing both the differentiation and equalisation tendencies marking the uneven development of capitalism and state power. The consequence is that at the heart of the transnational state thesis there is the assumption that the contradictions of uneven development are being ‘levelled’ by transnational capital. Thus uneven development is actually removed as a core driver of the contradictions of capitalism.

2) Does the transnational state thesis adequately capture the nodal presence of state power within the uneven development of capital accumulation?

One of Robinson’s clear points of contention is that states ‘are no longer the point of “condensation” of sets of social relations. They are no longer nodal points’ (A Theory of Global Capitalism, p. 143). Yet, if one agrees with Henri Lefebvre’s insight, in The Production of Space, that the worldwide does not abolish the local, that there is a ‘punctual’, or determinate nodal presence of the state within the structuring conditions of uneven development, then how can the transnational state thesis capture the role of states? Rather than highlighting the dominance of one spatial scale for another – the transnational supplanting national space – my argument is that there needs to be a more nuanced appreciation of the articulation of capitalism through nodal rather than dominant points across a variety of spatial and scalar relations. Additionally, there is a need to grasp the tensions between contending fractions of capital authoring the modern state and producing the spatial relations of uneven development. So, quoting Lefebvre, if ‘today more than ever the class struggle is inscribed in space’, this has to be understood through a focus on the absolute space of states as well as the relative space of transnational capital.

3) Are there patterns of continuity cutting across the period of transformation from Import Substitution Industrialisation (ISI) to neoliberalism that avoids the positing of a false dichotomy between an era of national capitalism and transnational capitalism?

Once again, to start with Robinson he states that ‘ISI strategies . . . formed part of broad-ranging populist movements protagonised by autonomous national classes in a more precarious alliance with international capital’ (Latin America and Global Capitalism, p. 52). However, here Robinson overlooks the degree to which ISI itself was centred around the pivot of fixed capital shaped by the consolidation of specific fractions of capital and large groups (grupos) as well as financieras in stimulating state-led development inserted within the geopolitical conditions of uneven development. Let us take a short glance at the example of Mexico with a spatialised view of the uneven development of fixed capital to elaborate.

Producing uneven development in Latin America

In Mexico, the development bank Nacional Financiera S.A. (NAFINSA), first created in 1934, came to direct most of the long-term financing of fixed capital throughout the 1940s and 1950s and was intrinsic to the development of state agencies oriented to the accumulation of capital. Fixed capital and the creation of the built environment, it should be stressed, are central to state formation leading to specific spatial arrangements across a variety of state scales (local, regional, national) and thus are essential features of the uneven development of capitalism. NAFINSA was central to co-ordinating public infrastructure and built environment projects in railroads, irrigation, electric power, and telecommunications as well as companies involved in the automobile industry and steel production, as Miguel Ramírez’s excellent book Development Banking in Mexico attests. From 1958 to 1964 the sectoral distribution of NAFINSA funds involved transport ($190 million or 27 per cent); electrification ($153.6 million or 22 per cent); industry ($82.8 million or 12 per cent); and irrigation, education, and public health ($145.7 million or 12 per cent).

NAFINSA was instrumental in facilitating this financing through the U.S. Export-Import Bank (1942) and negotiated loan transactions with the International Bank for Reconstruction and Development (1949) and the Inter-American Development Bank and the United States Agency for International Development (USAID) in the 1960s. As Alfredo Navarrete, deputy-director of Nacional Financiera summarised in 1968:

Foreign capital, both public and private, participated in several of the key industrial promotions of Nacional Financiera in this period, notably in the establishment of enterprises to produce steel, copper, fertilizers, paper, synthetic fibres and electric equipment – industries oriented to the substitution of imports . . . Thus foreign capital was able to assist in the active process of transformation of the productive structure necessary to economic development and growth.

Between 1942 and 1967 NAFINSA received $4,218 million in foreign capital channelled to infrastructure projects and basic industries. NAFINSA also granted priority to the agricultural sector during the primary phase of ISI but then subsequently, during the kick-starting of agro-industrialisation, was central to the transformation of peasant producers. In 1973, the Programa Integral para el Desarrollo Rural (PIDER: Investment Program for Rural Development) was launched with financing from the World Bank channelled through NAFINSA. The three phases of this program involved $110 million (1975-1980); $120 million (1977-1983); and $175 million (1982-1987). Along with additional programs, such as the Sistema Alimentario Mexicano (SAM: Mexican Food System), NAFINSA has always retained links to transnational capital while also being directly involved in the extension of capitalist property relations into the countryside that accelerated proletarianisation and the use of wage labour on ejido land.

To conclude, under ISI, financieras such as NAFINSA were intrinsic to the internalisation of class interests, processes of primitive accumulation, and the orientations of fixed capital within the state form in Mexico. At the same time, this was articulated within the orbit of uneven development and the consolidation of foreign capital through links to the World Bank.

As a result, there are greater continuities to the authoring of capitalism under ISI and neoliberalism in Latin America than perhaps hitherto appreciated. In contrast to the global capitalism thesis articulated by Robinson, continuities revolve around the shaping and reshaping of capitalism through the ‘spatial fix’ of the state within the broader conditions of uneven development. The role of specific fractions of capital and state-led development agencies, such as NAFINSA in Mexico, or similar nodal agencies such as the Chilean Production Development Corporation (CORFO), or the Brazilian National Development Bank (BNDES), need to be stressed in consolidating state formation processes and producing uneven development across different spatial scales.

The transnational state thesis, as argued in my book on Mexico, in outlining different epochs in the history of capitalism (developmentalist capitalism and neoliberalism) obscures these continuities and how uneven development is produced in Latin America both in the past and in the present.

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