Cold War Dynamics: The Third World and Dependency Theory

Cold War Power Struggles and the Third World

During the Cold War, the USSR (Communist) and the US (Capitalist) attempted to convince the Third World to become part of their respective blocs, each highlighting their own advantages. The USA wanted to demonstrate strength by controlling and exploiting Latin America. While the US promoted free trade, it was difficult to implement in Latin America because governments desired total control, resisted economic integration, and faced challenges with product pricing and difficult geography.

Geopolitical Triangulation and Strategic Shifts

The US intended to leverage the poor relationship between China and the USSR, known as Triangulation. This was complicated because Khrushchev criticized Stalin, the USSR provided more financial support to Western Europe, and China did not believe in the proletariat. Furthermore, the Tito-Stalin split in 1948 occurred because they disagreed on helping Greece. The US benefited from this by tilting the balance without toppling regimes.

The Non-Aligned Movement and Decolonization

Many ex-colonies remained neutral, refusing to join either block. These countries sought to:

• Maintain their autonomy
• Support decolonization
• Establish a fairer economic system without exploitation
• Improve terms of trade (as raw materials had very little value)
• Receive economic aid for development (via the World Bank)
• Ensure price stability
• Implement protectionism

The Non-Aligned Movement was created in 1955 at the Bandung Conference. It achieved significant coherence and led to the creation of the UNCTAD (United Nations Conference on Trade and Development) within the UN.

Dependency Theory and CEPAL

The CEPAL (Comisión Económica para América Latina y el Caribe) was created in Latin America, with Argentinian economist Raúl Prebisch as a key figure. According to his Dependency Theory (1960s–70s), poor states are impoverished while rich ones are enriched by how states are integrated into the world system.

The Four Types of States in the World Economy

1. Center of the Center: Rich countries (USA, France, UK).
2. Periphery of the Center: Modern, industrialized countries (Netherlands, Canada, Japan) with less power than the center but still wealthy.
3. Center of the Periphery: Developing but fairly wealthy countries (South Africa, India, Brazil).
4. Periphery of the Periphery: The poorest countries (e.g., El Salvador, Cambodia).

Global Capitalism and Elite Cooperation

Dependency theorists argue that an international division of labor and class distinction characterize global capitalism. In every country, regardless of poverty levels, there is an elite class unaffected by the general situation. These elites cooperate to maintain power, increase wealth, and preserve the system. Ultimately, the international system serves the interests of the core countries, preventing developing nations from achieving equal opportunity and growth through dominance and exploitation.