The Political Economy of Underdevelopment - A brief Introduction

The Political Economy of Underdevelopment
The usual mistake the one makes while talking about underdevelopment is that one equates it to the lack of development. Another very common mistake is that underdevelopment is taken as a phase in the development process that every country has to go through necessarily before it can become developed. What makes the thing even more complicated is the equation of underdevelopment with the word developing. This is a bit of trickery with words which successfully obliterates some of the processes of history. Underdevelopment should be seen in the context of colonialism and should also be seen as one side of the coin where the colony is losing whatever development that it had prior to the onset of colonialism, due to colonialism, while the other side of the coin is the development that the coloniser country goes through at the expense of the colonies. Example; India’s artisan economy was totally destroyed by the industrial economy of Britain. This also led to the taking away of raw material from the colony to the coloniser where industrialisation found greater traction and development while the colony lost even the necessary ingredients to sustain itself and its economy. Cotton was taken away from India and the mills in Manchester benefitted out of this. It led to greater employment in Britain while in India the handloom weavers had no raw material to ply their trade. So when India was becoming underdeveloped, Britain developed at its expense.
Core-Periphery Theory
This is actually the beginning of the theory of dependency which says that the end of colonialism physically did not signify the end of the domination of the coloniser country on its erstwhile colonies. This argument actually came up in the context of Latin America which managed to destroy its agrarian economy to start cosmetic industries so that they could sell the products for consumption in the American (USA’s) market. This left the Latin American countries’ economies totally at the mercy of the performance of the American economy. People like A G Frank have talked about the USA being a metropolitan core whereas the Latin American countries became the periphery of the metropolitan core. This particular model has since been used by other social scientists with Marxist inclinations in the general context of colonialism.  Over a period of time the word core was replaced by centre and in the dependency theory it was called the centre-periphery theory. This has been embraced by neo-Marxist economies in the characterisation of international economic relations and the continuation of power relations between coloniser and colony.
Globalisation and structural adjustment
Usually the process of globalisation is identified by many as being a part of the last couple of decades of the 20th Century. This perception is erroneous since the process of globalisation started when European countries began colonising the world and started exploiting the colonies economically for their own benefit. However, when the colonies attained independence most of them chose to try and resurrect their economies to stand on their own through acts of import substitution, creating inter-dependency between colonies and trying to rid the interference of the erstwhile coloniser and through aiming for self-reliance. This process also depended upon a certain process which involved socialism or at least socialist rhetoric. But the disintegration of the Soviet Union and the dissolution and disintegration of many Eastern Bloc countries once gain threw a life line to the West and Western Capitalism. Bretton Woods institutions like the World Bank and IMF came back into prominence with all the erstwhile socialist countries falling back on capitalism. The world became a truly capitalist global economic order and this empowered the IMF and World Bank to push for liberalisation of economies which tried to be self reliant  but became weak. This process of reintegration of economies into the world capitalist economic order and the creation of regimes such as the WTO and GATS into which most countries were drawn came to be called structural integration. Structural integration therefore happens at two levels. The primary level is within the economy of a country and the secondary level is the integration of the country’s economy into the global economy.