economies were oriented towards industrialisation while periphery countries were oriented towards agriculture and the production of primary commodities. Secondly, the centre experienced a much higher degree of monopoly power, particularly in the industrial wage area as a consequence of trade unions. Thirdly, the centre’s orientation towards industrialised goods provided greater technological gains, which would go on to spur further innovation. Fourthly, the openness of periphery countries – so heavily dependent on the export of primary commodities – made them much more reliant on international trade compared to those in the centre: economies in the centre typically had a much stronger domestic market (a consequence of industrialisation and the subsequent unionisation of the workforce) which buffered demand in times of economic crises. Fifthly, the centre has a tendency towards cyclical instability which is then passed onto the periphery, a characteristic of the centre and periphery relationship which historically left the Argentine economy vulnerable as the British business cycle ebbed and flowed. The final distinguishing characteristic between centre and periphery countries is that the masses in periphery countries tend to suffer from a lower standard of living, due in part to the five other characteristics mentioned. Although the resurgence of laissez-faire economic ideas in the late twentieth century obstructed their inclusion into the mainstream of economic thought, the centre and the periphery are ideas that have never truly gone away. Indeed, they continue to play an important role in the economic discourse of modern Marxists, as well as in current theories of international trade and development, and in other intellectual theories on the left of the political spectrum. If the Prebisch-Singer hypothesis accurately diagnosed the economic ills of countries in the periphery, then what was the cure? For Prebisch, the cure was a structural change in the economy, by shifting away from primary commodities towards manufactured goods through industrialisation. Wildly influential in Latin America, Prebisch’s ideas were actualised into economic policy through a movement that became known as Latin American structuralism . The
71
Made with FlippingBook HTML5