In recent years, a burgeoning body of English-language work has set out to challenge narratives of the universal triumph of economic ideas and institutions developed in the North-Atlantic space, bringing Latin America’s contribution to global intellectual history into sharp focus.1 Building on that, Margarita Fajardo studies the actors and ideas affiliated with the United Nations Economic Commission for Latin America (CEPAL), a regional commission of the UN based in Santiago, Chile. Her book uncovers how CEPAL spearheaded a postwar development agenda by foregrounding the asymmetric nature of global trade.
Intellectual biographies, journals, policy interventions and tensions associated with key economists, principally in Brazil and Chile, constitute the linchpin of Fajardo’s method and analysis. She makes two innovative arguments. Firstly, CEPAL economists were pace-setters in the postwar development debate, rising to hegemony with their centre-periphery conceptualisation of the global economy. CEPAL outthought and outmanoeuvred competing projects elaborated in “Northern” institutions and agencies such as the World Bank and the IMF in their attempts to capture the region (p. 11). Secondly, dependency theory, emerging as “both a product and an alternative to cepalino ideas” (p. 164), impacted a global generation of scholars, statesmen and activists. Fajardo’s source base includes private, state, personal and institutional documents across the Americas and Europe.
The book is divided into an introduction, six chapters and an epilogue. The introduction (pp. 1–17) draws attention to the books structure and stakes as well as the context surrounding CEPAL’s 1948 establishment. In chapter one (pp. 18–43), Fajardo recalls how, in the immediate aftermath of World War II, CEPAL succeeded in shifting the centre of gravity for world-making projects from North to South (p. 19). She posits that cepalinos filled a void left by the IMF by citing the role of Argentine central banker Raúl Prebisch's “manifesto” and its global inequality dyad of “centres” and “peripheries” (p. 42). In the second chapter (pp. 44–72), Fajardo skilfully unpicks the dialectical circumstances under which early Brazilian neoliberals such as Eugênio Gudin and Roberto Campos actually reproduced CEPAL’s concern with Latin America’s lack of access to foreign loans (p. 55). Since Cepalinos pointed out the link between export dependency via imported machinery and industrialisation, Fajardo suggests, they constructed an understanding of the development impasse that was embraced across the political spectrum.
Chapter three explores the battle to determine the origins of inflation, a conflict that set CEPAL and the IMF against each other (pp. 73–101). “Structuralism”, arose as the radical alternative to “monetarism”. As Fajardo observes, monetarism was a term first employed by cepalinos Celso Furtado, Osvaldo Sunkel and Juan Noyola to critique Prebsich and his 1955 monetary stabilisation plan for Argentina. For this group, inflation was not the result of a production crisis, but instead the disequilibria generated by the process of economic development itself (p. 84). This “structural” diagnosis became the cornerstone of CEPAL’s project. In a particularly outstanding section, chapter four (pp. 102–139) exposes the economic conflicts at the core of Latin America’s Cold War in the early 1960s, buttressing CEPAL’s fragmentation and the dependentista critique that it produced. Fajardo focuses on the politically antithetical Cuban revolution and U.S.-sponsored Alliance for Progress which forced realignments that “shook the position of cepalinos” (p. 103). In making her case, Fajardo examines Regino Boti and Felipe Pazos’s undertakings in Cuba and Celso Furtado’s contribution to the Alliance for Progress. She argues that cepalino participation in these contentious initiatives cost them political legitimacy and undermined their authority. Renouncing Cuba’s revolution and sidelined in the Alliance for Progress, cepalinos lost their opportunity to “speak for and from Latin America” (p. 137).
Chapter five (pp. 140–165) shows that the ideas that “coalesced into dependency theory” were not simply a reaction to “modernisation theory” and “Northern” doctrines (p. 140). Rather, as Fajardo insists repeatedly, they responded more to local and regional orthodoxies of development. Indeed, it was in Brazil that early dependency theory attacked cepalinos for their proximity to power and floundering economic development (p. 164). By recasting CEPAL as the flawed orthodoxy of global development, trailblazers André Gunder Frank and Fernando Henrique Cardoso aligned in their rejection of the national bourgeosie’s emancipatory power (p.155). Nevertheless, for Fajardo, dependentistas were still a product of CEPAL since they, too, employed the centre-periphery duality to frame their arguments about global capitalism. In fact, denunciation breathed new life into CEPAL’s faltering intellectual project.
Chapter six (pp. 166–196) sheds light on dependency theory’s globalisation. If dependency theory had influenced President Salvador Allende’s “Chilean way to Socialism”, the authoritarian turn that sounded its death knell in 1973 meant that “foreigners and Latin Americans went into exile, taking dependency ideas with them” (p. 191). It blossomed through “the frictions among dependentistas and their allies” (p.196), in settings as diverse as US and German universities with their anti-imperial research agendas and the circles of Peru’s development-minded military regime. The epilogue (pp. 197–217) charts the collaboration between Latin Americanists and Africanist scholars such as Immanuel Wallerstein and Giovanni Arrighi, demonstrating the impact of cepalino ideas on world-systems theory (p. 202). And by providing an overview of the political careers of three prominent dependency theorists, Fajardo conveys the contradictory and unpredicted reincarnations of the movement in the 1990s. In Chile, Enzo Falleto redefined socialism away from the state ownership of the means of production. Meanwhile, as President of Brazil, Cardoso advanced the rationale that the best way to escape “underdevelopment” was for private enterprises to compete in global markets in areas of their comparative advantage (p. 208). On the other hand, Tavares, a Worker’s Party representative, lambasted the privatisation programme carried out by her once friend and colleague Cardoso (p. 209). By noting the similar intellectual origins and diverse trajectories of these economists, Fajardo prompts us to reconsider crude Cold War binaries in the battle over economic ideas.
If the book unequivocally succeeds in surveying the trajectory of cepalino and dependency ideas, readers looking for an indication as to how favourable they were in definitively spurring economic development may be disappointed. However, since Fajardo by no means sets out to make judgements pertaining to policy outcomes, this is less a criticism than an observation. Indeed, The World That Latin America Created is a remarkable accomplishment. It offers impressive analytical depth and breadth at the intersection of economic theory, national politics in Latin America and institutions of global economic governance. Its findings will have a far-reaching impact on development studies and the mushrooming global histories of Latin America. Given its detail, complex handling of economic jargon and global stakes, Fajardo’s book merits a readership well beyond the confines of Latin American history.
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1 For three exemplary works, see Amy Offner, Sorting out the Mixed Economy: The Rise and Fall of Welfare and Developmental States in the Americas, Princeton 2019; James P. Woodward, Brazil’s Revolution in Commerce: Creating Consumer Capitalism in the American Century, Chapel Hill, NC, 2020; Christy Thornton, Revolution in Development: Mexico and the Governance of the Global Economy, Oakland, CA, 2021.