Dependency theory denied that market trade is voluntary and mutually beneficial
Evidence
To Harberger and the Chicago Boys, Santa Cruz’s emphasis on social and economic rights reflected the influence of ‘nationalist, protectionist, distributive mythologies’, notably the dependency theory of the Argentinean economist Raúl Prebisch, executive secretary of the UN’s Economic Commission for Latin America (ECLA). Prebisch’s account of unequal trade between the centre and the periphery challenged the neoclassical assumption that market relations are free, voluntary and mutually beneficial. In opposition to the myth of the sweetness of commerce, Prebisch highlighted the centrality of domination to the operations of the world economy. To Harberger, this stress on the external determinants of economic development – the international economic system, commodity prices, multinational corporations, and what Allende termed ‘neo-colonial exploitation’ – elevated the Latin American tendency to assume that ‘somebody else did it to them’ to the level of theory. — Jessica Whyte, The Morals of the Market, 320
Categorization
- DEFINE: Defines Prebisch’s dependency theory (centre/periphery unequal trade) and the neoclassical ‘myth of the sweetness of commerce’ it rejects — the core conceptual frame of this chapter.
- XREF: Connects to the ethics-of-markets debate: Harberger’s dismissive ‘somebody else did it to them’ is a fair-and-unfair-trade fight mirrored in today’s deglobalization arguments. — connects to: Market ideology conceals exploitation by making exchange stand in for production; Röpke rejected dependency theory while citing Jewkes against import substitution — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 1287; Voluntary environmental planning fails because buyers won’t pay for public goods — Adam Rome, The Bulldozer in the Countryside:…, 1066
- DEEPTHINKING: The whole passage captures the collision of two incommensurable ontologies of the market — voluntary mutual benefit vs. structured domination — which is arguably the central philosophical fault line the reader came for.