Political Economy of Eurocentrism: The Post-WW2 “Development Project” As Colonialism

Our understanding of global interactions – economic, political, social, and cultural – are still deeply shaped by the often misunderstood period of economic restructuring between 1945 and 1970. Many questions that plague our modern world – why the US continues to expand militarily, why Haiti is in such dire straits, etc. – can be partially explained by the developments of this period. This piece endeavors to begin an outline and investigation of these developments.

The period from 1945 to 1970 is sometimes called the era of the Bretton-Woods system, but more recently has been referred to as the “Development Project”.  This is the terminology used in McMichael’s work Development and Social Change, where the development of a world economy is described as progressing in three distinct stages; European Colonization, the Development Project, and Globalization. The phrase “Development Project” is apt as it refers to the global focus on the industrialization of newly-independent colonies; industrialization is often understood as development. To this day various international agencies classify countries as “developed” and “developing” (McMichael, 2016).

While each of these stages represent distinct historical developments in global politics and economy, several continuities persist. Indeed, the post-World War “development project” would not have existed without European (and later American and Canadian) imperialism becoming the primary actor in the maintenance of the modern world-system. Likewise, neither would Globalization have become the defining paradigm without the collapse of the Bretton-Woods system as the guarantor of the “Development Project” while still building upon its major institutions, the International Monetary Fund (IMF) and the World Bank.

The wording of “world-system” is important here. A world-system is a political and economic framework which imposes itself as totalizing and universal. Capitalism, and what we call capitalist development, is the first such complete world-system in human history. Its origins lie in colonialism, which both allowed the spread of European capitalism to the Americas, Africa, and Asia, and the exploitation of these continents to further the consolidation of capitalism and capitalist profit-making (O’Brien and Williams “Forging a World Economy”, 2007; McMichael, 2016).

Thus, understanding that the economic eras of capitalism proceed from each other, it can be inferred that the inequalities entrenched under colonization persisted throughout the development model period. In fact, the development model period can be understood as a new era of social and economic imperialism, colonization being the first. Development model period imperialism represented a shift, rather than a transformation, of the colonial project.

Therefore, while the Development Project succeeded in preserving the capitalist world-system, it was a failed to provide adequate restitution and improvement for the peoples of the ‘developing’ world.

Pax Imperialism and the Dollar Dictatorship

Cuba. First demonstration in support of the Revolu
The Cuban 26 July Movement storming Havana, the victorious moment of the Cuban Revolution.

The imperialist countries’ shift from colonization to ‘development’ can be understood as a reaction to three distinct processes threatening the capitalist-world system, (1) the wave of decolonization and nationalism sweeping the Europe’s colonies, (2) the weakening of the European powers by the world wars, and (3) the subsequent emergence of a socialist state (the Soviet Union) as a world power.  In response to these developments, the United States replaced Great Britain as the “center” of this new orientation in the capitalist world-system and financial domination replaced traditional colonialism as the method by which “Center” countries dominated colonized “peripheral” countries.

As much as the Development Project transformed the capitalist world-system away from the colonial model, it also continued colonial policy in two key ways. First, the currency of the leading imperialist power functioned as the stabilizer and equivalent for all exchanges within the world-system. During the Victorian era, the British Pound-Sterling was the universal equivalent in almost all exchanges (O’Brien and Williams, “Pax Britanica” 2007). Under the Bretton-Woods System, the U.S. dollar was made equivalent to gold and thus functioned in the same way as the Pound (Cohen, 2001).

It should be noted that at the time of independence for most former colonies, Europe had extracted vast amounts of wealth which it was not subsequently obliged to repay their now-independent colonies (McMichael, 2016).

So while the Development Project transformed the newly-independent states of the colonized world with an influx of industrial hardware and organization, industrial projects took place unilaterally, under the dictates of U.S. economic security and geopolitical interests. The control of the United States in this arrangement cannot be understated. In effect, Pax Americana replaced Pax Britanica, the period of almost absolute British dominance. This control of the Development Project was so complete that through the Bretton-Woods system, the U.S. congress could use fiscal policy, inflating or deflating the dollar, to influence the outcomes of trades the United States otherwise played no part in (Cohen, 2001; McMichael, 2016). Like how British supremacy created competition between European imperialisms leading up to World War I (O’Brien and Williams “Pax Britanica”, 2007),  the United States’ dominance also led to dissent from Japan and Europe who lamented the rigidity of the dollar-pegged system (Cohen, 2001).

Cold War Containment

bretton-woods-sign
Sign describing the Bretton Woods System

Another factor in these contradictions was location. Both Japan and the European powers bordered socialist states; China and the Eastern Bloc countries respectively. In a strategic compromise, U.S. policymakers allowed developmental models to improve other imperialist states’ position, to the point of destabilizing of the internal U.S. economy (Cohen, 2001). Hence why West Germany was the main beneficiary of the Marshal plan as part of staving off the “Soviet wave” the U.S feared would sweep Europe. The major successes of the Development Project – Japan, Taiwan, South Korea, and Hong Kong – were also strategically located in East Asia (McMichael, 2016) to contain the socialist revolutions in places like China and Vietnam, while opening a proverbial ‘eastern front’ against the USSR.

While the Development Project was framed as an effort based on the nation-state, self-sufficiency in the area of agriculture was completely denied to emerging nation-states. Troubled by the enthusiastic and rapid communization of agriculture in China, development agencies sought to reduce the power of peasants to self-organize in India and countries with large agriculture potential through specialization in crops produced for European and North American consumption (McMichael, 2016). While U.S farmers were encouraged to grow staples like wheat and grains, India was roped into growing commodities for western consumption, making India and other countries in similar arrangements dependent on western markets for basic sustenance. India was also the poster-child of the “green revolution” in agribusiness, which created a market for excess chemical weapons the United States was  looking to reprocess (they became fertilizers). This made India responsible for the immense costs of externalities created by U.S. war activity, including ecological destruction and massive rural decline (McMichael, 2016).

Both these examples from India are demonstrative of wider processes of economic and ecological “Unequal Exchange” which perpetuated the colonial reorganization of the world. It may be easy to explain the unevenness of the world economy and the dependency of the ‘developing’ world on the ‘developed’ as simply the vestiges of colonialism. However, this would ignore the active role which the United States played in perpetuating these uneven arrangements through the Bretton-Woods system, with the consent of the other imperialist countries (and when Bretton-Woods failed to foster favourable arrangements, NATO was always on standby). Thus the problems of the development project were precisely because the objectives of the most powerful actors were the preservation of the capitalist, imperialist world-system.

The Next Phase

Understanding the deeply imperialist elements of the Development Project is essential to understanding what comes next, Globalization. Just as Britain spread ‘civilization’ across the world, facilitating the global colonial supply chain, so too did the United States spread ‘development’ through the IMF and World Bank, leading to our now deeply Americanized period of Globalization; the similarities are stark (O’Brien and Williams, “Pax Britanica”, 2007). If we are to address the contradictions of globalization, we must understand the Development Project’s impacts in shaping the globalized world into one of dependency and renewed imperialism.

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References

Cohen, B. “Bretton-Woods System” Routledge Encyclopedia of International Political Economy. Ed. RJ Barry Jones. Routledge, 2001.

McMichael, P. Development and Social Change (6th ed.). Sage Publishing, 2016.

O’Brien, R. and Marc Williams. “Forging a World Economy, 1400-1800.” Global Political Economy (2nd ed.). p. 43-76. Palgrave/Macmillan, 2007.

O’Brien, R. and Marc Williams. “The Industrial Revolution, Pax Britanica, and Imperialism.” Global Political Economy (2nd ed.). p. 77-105. Palgrave/Macmillan, 2007.

 

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