The development of underdevelopment - From Volume 18, 1966, Monthly Review reprint

Monthly Review, June, 1989 by Andre Gunder Frank

VIII

These considerations suggest two further and related hypotheses. One is that the latifundium, irrespective of whether it appears as a plantation or a hacienda today, was typically born as a commercial enterprise which created for itself the institutions which permitted it to respond to increased demand in the world or national market by expanding the amount of its land, capital, and labor and to increase the supply of its products. The fifth hypothesis is that the latifundia which appear isolated, subsistence-based, and semi-feudal today saw the demand for their products or their productive capacity decline and that they are to be found principally in the above-named former agricultural and mining export regions whose economic activity declined in general. These two hypotheses run counter to the notions of most people, and even to the opinions of some historians and other students of the subject, according to whom the historical roots and socioeconomic causes of Latin American latifundia and agrarian institutions are to be found in the transfer of feudal institutions from Europe and/or in economic depression.

The evidence to test these hypotheses is not open to easy general inspection and requires detailed analyses of many cases. Nonetheless, some important confirmatory evidence is available. The growth of the latifundium in nineteenth-century Argentina and Cuba is a clear case in support of the fourth hypothesis and can in no way be attributed to the transfer of feudal institutions during colonial times. The same is evidently the case of the postrevolutionary and contemporary resurgence of latifundia particularly in the north of Mexico, which produce for the American market, and of similar ones on the coast of Peru and the new coffee regions of Brazil. The conversion of previously yeoman-farming Caribbean islands, such as Barbados, into sugar-exporting economies at various times between the seventeenth and twentieth centuries and the resulting rise of the latifundia in these islands would seem to confirm the fourth hypothesis as well. In Chile, the rise of the latifundium and the creation of the institutions of servitude which later came to be called feudal occurred in the eighteenth century and have been conclusively shown to be the result of and response to the opening of a market for Chilean wheat in Lima.(8) Even the growth and consolidation of the latifundium in seventeenth-century Mexico--which most expert students have attributed to a depression of the economy caused by the decline of mining and a shortage of Indian labor and to a consequent turning in upon itself and ruralization of the economy--occurred at a time when urban population and demand were growing, food shortages became acute, food prices skyrocketed, and the profitability of other economic activities such as mining and foreign trade declined.(9) All of these and other factors rendered hacienda agriculture more profitable. Thus, even this case would seem to confirm the hypothesis that the growth of the latifundium and its feudal-seeming conditions of servitude in Latin America has always been and still is the commercial response to increased demand and that it does not represent the transfer or survival of alien institutions that have remained beyond the reach of capitalist development. The emergence of latifundia, which today really are more or less (though not entirely) isolated, might then be attributed to the causes advanced in the fifth hypothesis--i.e., the decline of previously profitable agricultural enterprises whose capital was, and whose currently produced economic surplus still is, transferred elsewhere by owners and merchants who frequently are the same persons or families. Testing this hypothesis requires still more detailed analysis, some of which I have undertaken in a study on Brazilian agriculture.(10)