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Global Political Economy 101: Critical Approaches and Dependency Theory


It is common to hear in public discourse that the world has never been as interconnected and interdependent as it is today. Technological progress in the fields of communication and transport has promoted giant leaps in the last 100 years in terms of the internationalisation of the economy. The term globalisation, in fact, has become of common use, and national economies can no longer be studied without facing their embeddedness in the world economy. The series of articles Global Political Economy 101 strives to address the complexity of the global economy by historicising the process that led to the present situation, providing an overview of the different academic approaches, and finally coming up with critical interpretations of the global economy and globalisation. The study of global political economy as a coherent subject of inquiry provides valuable insights into the big issues of our days, such as poverty, inequality, development, and sustainability. The pieces will maintain a humanities-based approach. Therefore, the economy will be seen as the intertwining between several factors like politics, society, culture, and human agency rather than the result of mathematical calculations. The set of articles will be divided into three blocks, each one composed of three articles. The first block will analyse the world economy from a historical perspective. The second one will provide an overview of the main theoretical interpretations of the world economy. The third one will address some of the main questions of today’s global political economy with the analytical tools previously provided.

Global Political Economy 101 is divided as follows:

  1. Global Political Economy 101: From the Discovery of the Americas to Imperialism

  2. Global Political Economy 101: Decolonisation, World Capitalism and Neoimperialism

  3. Global Political Economy 101: Neoliberalism and Globalisation

  4. Global Political Economy 101: Liberal and Neoclassical Interpretations

  5. Global Political Economy 101: State-centric & Developmentalist Interpretations

  6. Global Political Economy 101: Critical Approaches and Dependency Theory

  7. Global Political Economy 101: Why Few Have Much, and Many Have Little - Inequality

  8. Global political Economy 101: The Wretched of the Earth - Development and Poverty

  9. Global Political Economy 101: The Mantra of Our Times - Sustainability


The last two articles of this series described two approaches to Global Political Economy: The liberal and neoclassical, and the state-centric and developmentalist one. As shown, those approaches are radically different and have two almost opposing views on how the global economy works and how it should look. In fact, they have a radically different view of the state’s role in the economy, and of the degree to which the market can allocate resources efficiently. However, despite their critical divergencies, they do share one basic assumption. Both strands of thought assume that economic development must be pursued within capitalism. They do not doubt that capitalism is an economic system that works, instead, they do argue about the degree to which it should be regulated or not. None of the two approaches criticises capitalism at its roots, but rather they focus on its manifestations. This article will focus on a strand of scholarship that questions both liberal and state-centric views for their reliance on capitalism. Such a school of thought is often referred to as “critical” since it criticised the structural features of the capitalist world economy, arguing that the major issues in the field are not the manifestation of a poorly managed system but an inherent consequence of the system itself. As Robert Cox (1981) said, there is a difference between problem-solving theory, which aims at addressing problems remaining within the status quo, and critical theory, which argues that the status quo is the problem. Critical theory in global political economy is a vast field, and the contemplation of its complete articulation goes far beyond the purpose of this article. The aim here is to provide a view of the historical foundations of such a school of thought and expand on its contemporary applications. Therefore, the first part of the article will look back at the theoretical foundations of critical thinking. The second one will explore some of its past and contemporary applications to the global political economy.

A theoretical understanding

Critical theory as an independent approach to social sciences was first developed by the Frankfurt School. As Horkheimer (1982) wrote, critical theory is for its aim is “to liberate human beings from the circumstances that enslave them” (p. 244). Unlike the previously addressed approaches, critical theory is inextricably linked to political action. The theoretical base for this scholarship emerged in the early 19th century when the effects of industrial capitalism became to be evident, and workers started to become aware of their condition and organised. It was with the thinking of people like Pierre-Joseph Proudhon (1809 - 1865), Henri de Saint-Simon (1760 - 1825), Mikhail Bakunin (1814 - 1876), and most of all Karl Marx (1818 - 1883) and Friedrich Engels (1820 -1895), that the theoretical bases for critical theory were laid down. Undoubtedly Karl Marx was the most influential, and the one that shaped what later would later become critical theory in the most prominent way. He was the first scholar to systematically analyse capitalism, highlighting its contradictions, and politically argue for the overcoming of such a model (Marx, 2017). Marx, in fact, argued for the first time that the capitalist mode of production is intrinsically and irremediably exploitative. The private ownership of the means of production enables capitalists — those who own the means of production — to appropriate the plus value produced by workers who are rewarded for their jobs with a salary that needs to be lower than the total value of what they produce, as otherwise no profit would be made by the capitalist (Marx, 2017). Furthermore, he postulated that reality should be interpreted through the lens of historical materialism, which is the dialectical relation between structure (the economy) and superstructure (ideology) (Marx, 2017).

Image 1: Unknown (n.d). Karl Marx [Photograph].

The very nature of capitalism is exploitative, as Marx extensively argues in his most known book Das Kapital. From this assumption, critical approaches developed in many fields of knowledge. Global political economy also developed its understanding and declination of Marx’s conceptualisation. Even though Marx did not expressly address the global economy as a whole — he was more preoccupied with unveiling the concealed mechanisms that make capitalism exploitative — Marxism as a movement did develop a view on the geopolitical and geo-economic dimension of the 19th century’s economic conjuncture. Vladimir Lenin (1936) famously described the fin de siècle global arrangement by pointing out the hegemonic dominance of British imperialism. Lenin defined imperialism as the latest stage of capitalism, for he saw an inherent connection between capitalist economic expansion and imperialism, according to which the former intrinsically implies the latter at a certain point. However, it was during the 20th century that most of the critical theory in the field of global political economy was produced. This is understandable because the global political economy is relatively young as an independent body of knowledge.

Building upon a Marxist conception of history and economy, Fernand Braudel (2009) developed the concept of longue durée. He argued that the social sciences are often missing the vision d’ensemble of social phenomena since they fail to address them from a cyclical standpoint and thus miss the slowly changing structures of economy and society. Building upon Braudel, Wallerstein (2000) and Arrighi (1994) developed their conception of the world system, which described the evolution of capitalism as characterised by the exploitation of some countries over others and by cycles in the long durée. The capitalist economy is best understood if studied as an independent object, constituted by the intertwining of economic relations among states. He argued that throughout the history of capitalism, some countries have established their position as centre or metropolis, while others were relegated to the position of the periphery. As it has explained in the first three articles of this series, the relationship between the centre and periphery has been changing throughout time, however, it has always been unequal and exploitative economically. It was upon the world system theory that the dependency theory was conceived in Latin America (Prebisch, 1962). Dependency theorists argued that the peripheral economies are inherently linked with the centre. The underdevelopment of the latter is dependent on the underdevelopment of the former since the periphery works as a provider of what central economies demand — being its primary sources, sources, or even workforce. According to them, no development is possible in the periphery if the relation of dependence persists (Quijano, 2014).

Image 2: Andre Gunder Frank and Immanuel Wallerstein (n.d). World System Theory [Illustration].

Complementarily to the world system theory the Neo-Gramscian strand of scholarship was developed within the field of International Relations. Robert Cox (1987; 1981), inspired by the work of Antonio Gramsci built his conception of world orders. In his view, world order is the manifestation at the global scale of the social relations of production in the national realm. World orders — the form that the global arrangement of the relation among states takes at a certain time — is the expression of the hegemony of one (or an alliance of more than one) social class over the others, which is based upon certain relations of production, and is projected internationally. Therefore, according to Cox, the way in which the world system is shaped must be regarded as the result of the prevailing social relations of production — recalling Marx’s historical materialism. Furthermore, in a Neo-Gramscian fashion, world orders are not only determined by the social relations of production but as a result of hegemony at the international level. They also contribute to the maintenance of those relations of production, as they provide for an internal anchorage to the national expression of the hegemony of one class over the others (Cox, 1981).

Image 3: Unknown (Early 20s). Antonio Gramsci [Photograph].

In summary, the theoretical base of the critical global political economy lies in the view of capitalism as an inherently exploitative system. Capitalism generates intrinsic contradictions, which it cannot escape, and that can only be solved by overcoming such a system (Harvey, 2014). In the views presented here the capitalist world system either favours the countries of the centre at the expense of the peripheral ones (Arrighi, 1994; Wallerstein, 2000) or is the reflection of class hegemony at the international level (1981). In both cases, capitalism is seen as the ultimate cause of the problems connected with the world economy.

Until now, some important conceptions of global political economy within critical theory have been explained. The theoretical base of critical global political economy has been explored. The next section will address some of the political and academic outcomes of critical global political economy.

Historical applications

As briefly explained in the previous section, critical theory — and with it, critical interpretations of global political economy — was defined relatively recently by the Frankfurt School. However, it is crucial to understand that its intellectual roots can be traced back to the beginning of the 19th century. This last issue is paramount in understanding the ante litteram applications of critical scholarship in the global political economy. The assumption that capitalism is unfair and that under capitalism exploitation will never be eliminated certainly underpinned the action of most trade unions in the 19th century and most socialist — and later communist — parties were determined in overcoming capitalism as a system. Nevertheless, the global political economy declination of critical theory started to find practical applications in the 20th century as the crisis of imperialism was clear, and the decolonisation movement was gaining traction.

Image 4: Unknown (n.d). The Frankfurt School [Photograph].

The crisis of 1929 exposed some of the contradictions of capitalism, not only regarding its internal functioning but also concerning its exploitative nature on a global scale. The effects of global capitalism on peripheral countries were made manifest when the crisis expanded from the financial to the “real” sector, which caused an instant drop in the demand for primary goods on the world market. Those countries that at that moment were in a peripheral position, hence producing primary goods for exportation, suffered a dramatic decrease in the price of said goods, which could only result in a drastic drop in profits (Quijano, 2014). Most of those countries were Latin American. The acknowledgement of such a conjecture, and of the fact that it was inherently linked to the structure of world capitalism contributed to the direct engagement of the Economic Commission for Latin America and the Caribbean (ECLAC) in building the founding of the dependency theory. Such advocacy of the ECLAC together with national initiatives also led most countries of the region to rethink their collocation in the structure of world capitalism and engage in policies known as import substitution industrialisation (ISI). ISI was built upon the idea that countries should engage in industrialisation supported by the internal market, and therefore not be dependent on external factors. However, critical and dependency theory thinkers criticized such an approach, for they argued it did not emancipate Latin American countries from dependency, but rather transformed it into technological dependency (Quijano, 2014). Nevertheless, being ISI efficient or not, it is important to understand how it was inspired by critical views of the world economy, recognising the exploitative nature of a certain world economic arrangement.

Image 5: Unknown (n.d). Dependency Theory [Illustration].

Critical global political economy acquired importance with the rise of neoliberalism and neoliberal globalisation. As has been explored in the previous articles, neoliberalism did entail the internationalisation and the integration of economies above the borders of nation-states (Slobodian, 2018). Critical thinkers have analysed and criticised neoliberal globalisation and its manifestations all around the world for it inherently enhances the exploitative nature of capitalism (Harvey, 2005). Such criticism towards globalisation fostered the no global political movement in early 2000, which in Latin America spurred the electoral triumph of many leftist and anti-neoliberal movements determined at engaging in radical transformations of the economy and society -the so-called pink tide (Chodor, 2015). Furthermore, many movements of resistance arose in the early 2000s, expressively positioning themselves in opposition to neoliberalism and its global hegemony (Petras & Veltmeyer, 2011). After the crisis of 2008 -when the contradictions of neoliberal globalisation were exposed- anti-neoliberal — and to a certain extent anti-capitalist — movements grew in western countries as well. Critical thinking addressed the structure of neoliberal globalisation by criticising its exploitative nature based on giving capital much more power vis-à-vis the labour force (2005). Critical analysis of the manifestations of neoliberal hegemony also emerged regionally — e. g., the European Union, which has been seen as the manifestation of the interests of the regional capitalist class (Bieler, 2005) or other projects of regional integration (Katz, 2008).

Image 6: Unknown (n.d). The No-Global Movement [Illustration].


Even though critical theory as an independent body of knowledge was identified in the 1960s by the Frankfurt School, its origins trace back to the early 19th century. It is not possible to understand the 20th century’s critical theory without looking back to classical Marxism. Global political economy has interiorised critical theory by drawing the structure of the world economy as inherently exploitative and responsive to class interests. This has been academically discussed by prominent scholars from different points of view. Historical applications of critical global political economy to policymaking are not abundant — which is demonstrated by the fact that world capitalism is still hegemonic. Nevertheless, it has indeed influenced political movements throughout the last 100 years, some of which have even made their way to positions of power upholding their opposition to the unfair structure of the world economy. Only rarely, however, this was translated into authentically critical — in the sense that it proposes an alternative to world capitalism — governments able to question the system at its roots.

Bibliographical References

Arrighi, G. (1994). The long Twentieth Century; Money, power, and the origins of our times. Verso.

Bieler, A. (2005). Class Struggle over the EU Model of Capitalism: Neo-Gramscian Perspectives and the Analysis of European Integration. Critical Review of International Social and Political Philosophy, 513-526.

Braudel, F. (2009). History and the Social Sciences: The Longue Durée. Review (Fernand Braudel Center), 171-203.

Chodor, T. (2015). Neoliberal Hegemony and the Pink Tide in Latin America: Breaking UP with TINA?. London: Palgrave Macmillan.

Cox, R. W. (1981). Social forces, states and world orders. Millennium journal of international studies, 126-155.

Cox, R. W. (1987). Production, Power, and World Order: Social Forces in the Making of History. New York: Columbia University Press.

Harvey, D. (2005). A Brief History of Neoliberalism. Oxford: Oxford University Press.

Harvey, D. (2014). Seventeen contradictions and the end of capitalism. London: Profile Books Ltd.

Horkheimer, M. (1982). Critical Theory Selected Essays. Continuum Pub. Corp.

Katz, C. (2008). El rediseño de America Latina; ALCA, MERCOSUR y ALBA. La Habana: Editorial de ciencias sociales.

Lenin, V. (1936). Imperialism, the Highest Stage of Capitalism. In V. Lenin, Selected works (p. 667-776). Moscow: Progress Publisher.

Marx, K. (2017). Antologia. Milano: Feltrinelli.

Petras, J., & Veltmeyer, H. (2011). Social movements in Latin America : neoliberalism and popular resistance. New York: Palgrave Macmillan.

Prebisch, R. (1962). The economic development of Latin America and its principal problems. Economic Bulletin for Latin America.

Quijano, A. (2014). Dependencia, cambio social y urbanización en Latinoamérica. In A. Quijano, Cuestiones y horizontes : de la dependencia histórico-estructural a la colonialidad/descolonialidad del poder (pp. 75-124). Buenos Aires: CLACSO.

Slobodian, Q. (2018). Globalists. Milano: Meltemi.

Wallerstein, I. (2000). The Essential Wallerstein. The New York Press: New York.

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Pelin Burcu Ozturk
Pelin Burcu Ozturk
Nov 01, 2022

The theoretical framework allows a deeper understanding of historical context while historical applications are very well explained with 20th-century examples. Great work!


Oct 31, 2022

Another excellent piece of research and analysis. The topic is well stated, clear and straightforward. Excellent work as always!

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Andrea Taborri

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