Raúl Prebisch and the challenges of development of the XXI century

The economic development of Latin America and its principal problems (1948)

This work, which ECLAC commissioned from Prebisch as a consultant to introduce its 1948 Economic Survey of Latin America, is probably the most important text for the theory of development in the region and became the cornerstone of the subsequent ECLAC doctrine, to the point where Albert Hirschman called it "the Latin American manifesto" and it is often cited as the "ECLAC manifesto".

This article represents the convergence of Prebisch's previous reflections on the Argentine experience, reinforced by the broader knowledge of Latin America gleaned from his travels in the 1940s.

Its presentation at the 1949 Havana conference caused a stir, as it challenged the prevailing assumptions about international trade and at the same time laid out a roadmap for the structuralist thinking of the decade to come.

In this article Prebisch analysed Latin America's position in the world economy in light of the "centre-periphery" concept and he proposed the idea that the long-term deterioration in the terms of trade for primary goods reinforced this asymmetrical structure.

This implied a frontal attack on the international division of labour which, as he put it, led to the concentration of income in countries of the industrialized centre. As a result, he called for active State intervention to promote the process of industrialization, which had begun pragmatically in response to the upheavals sparked by the world wars and the crisis of 1929.

This article is the culmination of Prebisch's thinking prior to his stint at ECLAC and also constitutes the point of departure for ECLAC thought that would give Prebisch his position of leadership within the organization and make him a key figure in thinking about global economic development.

Prebisch, Raúl (1948) El desarrollo económico de la América Latina y algunos de sus principales problemas. Santiago, CEPAL. 64p.

Edición realizada con motivo del proyecto "Raúl Prebisch y los desafíos del Desarrollo del siglo XXI"

Economic development or monetary stability: the false dilemma (1961)

In this paper Prebisch sets out, from the structuralist standpoint, to systematize the ECLAC view as to the causes of inflation in Latin America. It is a response to the criticism sparked by this heterodox view, often based on a caricature of the new postures at a time when several countries in the region were feeling intense inflationary pressures.

He explains that ECLAC does not deny the existence of problems of a financial kind, or "monetary incontinence", but that the monetarist approach of the critics ignores the complexity of the underlying causes of inflation in Latin America, which are to be found in structural inflationary forces.

Consequently, "inflation cannot be explained without taking into account the economic and social maladjustments and tensions that are emerging in our countries' economic development", which means that anti-inflationary policies must give active consideration to elements such as vulnerability to the external cycle, the ownership structure, the distribution of income and the level of domestic savings.

Prebisch is proposing, then, that policies to combat inflation must "be integrated into a rational economic development policy and not taken as an element divorced from that policy". [Prebisch, translation by ECLAC]

Prebisch, Raúl (1961) El falso dilema entre desarrollo económico y estabilidad monetaria. Boletín Económico de América Latina   No.1, p. 1-26

Towards a Dynamic Development Policy for Latin America. (1963)

This book represents a milestone in the theoretical thinking of ECLAC, after nearly 15 years during which it had been analysing the Latin American development process, implementing a variety of initiatives, and formulating policy proposals.

Adopting and underlining this more abstract form of analysis, Prebisch warns that the text implies a certain generalization of aspects of his work and that of ECLAC, which had been formulated in a permanent and, in many cases, a vertiginous manner.

It therefore has this first dimension of a synthetic text on theoretical visions and general policy proposals. Nevertheless, at the same time this pause for reflection makes it possible to include elements of criticism concerning the application of certain policies and to propose corrections to the ideas that had been gestating in ECLAC during the preceding years.

On one level it stresses the need to promote regional integration in order to broaden markets. On another it insists on the importance of boosting exports as a way of addressing the external imbalance, which had become a serious obstacle to industrialization.

Lastly, it assigns greater influence to social and distributional problems, calling for changes in the property ownership system and in the use of agricultural land through agrarian reforms and amendments to the tax structure, among other measures.

It was with this zeal to promote new proposals and to take risks that Prebisch put his name to the text, something he had not done since publication of the ECLAC manifesto in 1949. This dimension of the work as a weighing scale is underlined by the fact that it is also the last work he would produce before leaving ECLAC for a time to fulfill functions outside the region.

Prebisch, Raúl (1963) Hacia una dinámica del desarrollo latinoamericano. Santiago, CEPAL.159 p. (E/CN.12/680)

Edición en inglés: "Towards a dynamic development policy for Latin America". E/CN.12/680

Introducción a Keynes. 6ta ed. (1965)

Keynesian thinking made a profound impression on Raúl Prebisch, as reflected in the effort he made to summarize, structure and analyse the works of Keynes, and in particular the General Theory of Employment, Interest and Money, published in 1936.

This "introduction", which initially served a pedagogical purpose, as he believed that the works of Keynes, given the polemical context in which they were conceived, presented "obscure passages", "lack of precision in some lines of reasoning and an apparent textual disorder", was in fact the first "reader's guide" to Keynes ever published.

His zeal for publicizing the thinking of Keynes also derived from the theoretical proximity between some of Keynes's ideas and the heterodox policies to which Prebisch (and other Latin American policymakers) had been converted during the convulsions of the Great Depression of the 1930s: the interest in economic cycles and the importance of countercyclical policies, the proactive role of the State, the impact of investment and savings on growth, and the effect of "distributive justice" on aggregate demand, among other issues.

From this viewpoint, Prebisch's writing goes beyond the pedagogical interest of the university professor and is in fact a theoretical weapon to be wielded on the doctrinal battlefield. Yet it is important to recognize that Prebisch's reading of Keynes’s work is very critical, for he considered that the dynamism of industrialized countries, and consequently the applicability of Keynesian elements to Latin America, were things to be studied and not assumed.

Thus, he would write some years later: "It was in the centres themselves, submerged in the great global crisis [...] that Keynes emerged, but we in Latin America quickly discovered that Keynes's genius was not universal and that his analyses were confined to the economic phenomena of the great centres and took no account of the problems of the periphery" (Prebisch, translation by ECLAC.

Prebisch, Raúl (1965). Introducción a Keynes. 6ta ed. México, DF : Fondo de Cultura Económica.131 p. Print format available at Biblioteca Hernán Santa Cruz, ECLAC

Transformación y desarrollo: la gran tarea de América Latina (1971)

This text, also known as the "Prebisch Report", marks Prebisch's return to the great issues facing Latin America after his stint at the United Nations Conference on Trade and Development (UNCTAD), which had led him to focus on global development strategies.

This report, submitted by Prebisch to the Inter-American Development Bank in 1970, was originally supposed to deal with the effects of external financing and cooperation strategies in Latin America. However, Prebisch sought to broaden the analysis to include a joint vision of the development strategies implemented in previous decades, and to identify their successes, limitations and failures.

In this respect the text shares with the earlier work, Towards a Dynamic Development Policy for Latin America, an all-embracing character: its author attempts to consolidate a general development strategy based on the contributions of ECLAC, to assess the principal limitations and problems at the end of the 1960s, and to propose policies and courses of action.

The last chapter, entitled "Conclusions for Action", summarizes the results of the general analysis of policies, underscoring its practical nature. On the other hand, however, according to Dosman and Pollock (1993), this report bespeaks an active search for new paradigms: his departure from UNCTAD marked the end of an era and he is now calling for a re-thinking of the dynamics of Latin American development on the grounds that some of the key postulates of the previous stage had become “passé”.

As an expression of this new concern, for example, much space is devoted in this report to the problem of the informal economy together with an analysis of the dual economy in terms of the labour market, an issue that will take on greater importance in subsequent decades. It constitutes a warning to move away from "inherited dogmas", even though he had played a key role in creating those dogmas.

Prebisch, Raúl (1971). Transformación y desarrollo: la gran tarea de América Latina. Santiago: CEPAL. Período de Sesiones de la CEPAL 14 Santiago 27 abril-8 mayo 1971 (E/CN.12/891) Chapters I and VIII in Spanish and English

Biósfera y desarrollo (1979)

In some of his recent works - especially those appearing in numbers 6 and 10 of this Journal - the author has attempted to describe the main elements and relationships that characterize the structure of peripheral capitalism, to highlight the fundamental conflicts that it generates in its display and outline the guidelines that should address its transformation.

From a socioeconomic point of view, the essential nucleus of this system lies in the form assumed by capital accumulation and the distribution of income and their relations, which produce a number of negative consequences, including dynamic insufficiency and distributive inequity. Environmental problems that have become relatively new, such as the depletion of natural resources, pollution of the atmosphere and water, and urban congestion are a consequence of the system's own dynamism both in the centers and in the periphery, and their scarce ability to foresee and face them in time. They have also contributed to sharpen existing problems and generate new ones, considerably complicating the outlook for the coming decades.

In any case, they have left the periphery a great teaching, they have helped dissipate the illusion that it could develop in the image and likeness of the centers; Once again, the imposition of the facts will force it to seek autonomously its own way.

Prebisch, Raúl (1979). Biósfera y desarrollo. Santiago:CEPAL. 40 p. Proyecto CEPAL;PNUMA (E/CEPAL/PROY.2/R.22)

Prebisch, Raúl (1979). Biósfera y desarrollo. Revista CEPAL (12), 1980. p. 73-88  E/CEPAL/G.1130

Prebisch, Raúl (1979). Biosphere and development. Revista CEPAL (12), 1980. p. 69-84  E/CEPAL/G.1130

Capitalismo periférico : crisis y transformación (1981)

"After long observation and much reflection
I am persuaded that the great failings of Latin American development
cannot be resolved within the prevailing system. We must change it”

R. PREBISCH

After founding the CEPAL Review in 1976, Prebisch had time to return to some theoretical thinking. He published a series of articles on the particular characteristics of peripheral capitalism, and compiled them into a book in 1981. In it, he reinforces the idea of the systemic nature of underdevelopment.

Prebisch is beginning to lose confidence in the extent to which economic policies can be effective. Until Change and Development he appears confident that proper development policies can "liberate the forces contained and channel them in the proper direction.

In the 1970s he no longer believes that a combination of structural reforms, heavy capital accumulation, and strong international cooperation can develop countries of the periphery; to achieve this, the system needs to be transformed root and branch." (Gurrieri, 1982).

To champion this position he analyses the multidisciplinary field and in turn seeks to offer an integrated conceptual framework based on three categories: surplus, power, and social groups. This more pessimistic vision brings him closer in certain aspects to the positions taken by the dependency theorists [link], with their stress on systemic determinism.

On the other hand, the ambitious nature of the conceptual framework generated strong polemics about this work, challenging in particular the relevance of the analytical categories. This book gives clear evidence both of Prebisch's insatiable intellectual curiosity and his tireless effort to explain the dynamics of Latin American underdevelopment, even though this obliges him to undertake an honest reappraisal of his previous positions.

Prebisch, Raúl  (1981). Capitalismo periférico : crisis y transformación México, DF : Fondo de Cultura Económica. 344 p. Print format available at Biblioteca Hernán Santa Cruz, ECLAC.

Prebisch, Raúl  (1976)  A critique of peripheral capitalism. En: CEPAL Review, (1), 1976. p.9-76

Five stages in my thinking on development

This article is based on a presentation that Prebisch gave at a World Bank seminar. In it he reviews the principal stages of his thinking, demarcated by the major milestones of his professional career.

He starts with the initial stage in which he became familiar with Latin America between 1943 and 1948. This was followed by a period of intense activity at ECLAC, in which he laid the foundations of structuralist thinking. The third stage, which extended from the end of the 1950s to the early 1960s, was a time of critical thinking about some of the previous postulates and the course of Latin American industrialization.

Then came the UNCTAD phase, during which the ECLAC ideas for Latin America were extended to cover global trade policies and negotiations. Finally, the fifth stage corresponds to his return to ECLAC and his work with the Latin American and Caribbean Institute for Economic and Social Planning (ILPES) and subsequently the CEPAL Review.

For anyone seeking to understand Prebisch's intellectual development this "autobiographical" analysis is an essential starting point. The section of the website devoted to the stages of his thinking will be based on this chronology, but with some changes: it includes an initial stage covering his years of education and his work in various positions as an Argentine public servant and, in order to avoid discontinuities, it also includes a final stage that extends to his death.

Prebisch, Raúl. Cinco etapas de mi pensamiento sobre el desarrollo. En: Raúl Prebisch: un aporte al estudio de su pensamiento. Santiago: CEPAL, 1987. p. 13-30 (LC/G.1461)