Contemporary ‘dependency’ writers have attributed the origins of most of Latin America's past and present economic problems to the expansion of European capitalism in the nineteenth century. It led to the formation of alliances between local elites and powerful foreign interests, giving the latter participation in policy making. The main tenet of the ‘dependency school’ is that the economic policies derived from this alliance, and the alliance itself, were detrimental to ‘national’ development, since they inhibited the growth of the non-export oriented activities of the economy.

Prior to the introduction of the steamboat on the Magdalena River during the 1820s, reaching Bogotá from the Caribbean coast required a two to five month journey. This trip included travelling in bongos (rafts) and traversing mountains on the backs of both men and beasts. Bogotá was the most isolated of all the Spanish viceregal capitals. No other viceroyalty was so dependent on river transportation as New Granada (now Colombia). Even by the late nineteenth century, travel within the country remained dreadfully difficult. In the best of weather most Colombian roads were barely suitable for mule traffic, and, whenever tropical rains poured, human carriers undertook the burden of transportation despite the fact that Colombia, following the newest American and European trends in transport innovations, built railroads to the point where they were the nation's leading technological import during the nineteenth century. The apparent futility of this modernization effort has led many scholars, both Colombians and non-Colombians, to conclude that Colombia moved directly from the age of the mule to that of the airplane.

‘No one is unaware,’ stated Brazil's Minister of Finance Ruj Barbosa in 1891, ‘that commerce, especially large-scale commerce, in our most important trade centers resides in greatest part, not to say in its near entirety, in the hands of foreigners.’ Rui was calling attention to a situation of increasing concern to Brazilian leaders: the preponderance of foreigners in big business. Another Brazilian Minister of Finance, Felisbello Freire, remarked on the subject in 1894, ‘to my mind this phenomenon is an indication of a subjugation which, dating from colonial times, threatens the annulment of native commerce.’.

For the foreign scholar, especially, an understanding of Peruvian politics between 1895 and 1919, the period of the so-called Repôblica Aristocràtica, is difficult to obtain. This quarter-century is considered an era of rapid social and economic change: in the words of one scholar, it completed ‘the disappearance of colonial Peru’. An important element in this transition was the growth on the coast of the ruling group connected with the expanding export economy, known in the literature variously as the ‘oligarchy’, ‘bourgeoisie’, or the ‘plutocracy’, which supposedly obtained control over the meagre resources of the state and directed them to its own ends.

During the inter-war period the international economy was drastically altered as economic nationalism and the desire for self-sufficiency were strengthened in the aftermath of the Great War. Even Britain, the bastion of free trade, began to adopt protection and trade preference from 1919. The narrowing of European markets had serious consequences for primary commodity producers, many of whom, induced by high war-time prices, had greatly increased their output and used windfall profits to install more modern processes and increase capacity. When commodity prices began to fall from about the mid-1920s, the most common response was to raise output, and this simply helped to push prices still lower. With the Crash in 1929, the position of primary producers changed from bad to catastrophic. Prices collapsed, flows of capital and credit dried up and the already weakened international economy broke into fragments. Countries moved to protect themselves by the introduction of exchange controls, systems of trade preference, higher tariffs and bi-lateral trade agreements. In Latin America the most widely known bi-lateral arrangement was the so-called Roca-Runciman Agreement celebrated between Britain and Argentina in 1933 and renewed three years later.

The literature on American foreign policy tends to emphasize nonstructural (national security, ideological, strategic, bureaucratic, etc.) factors in seeking to account for the differing U.S. government responses to nationalist movements that challenge for and/or capture state power in the Third World. In those instances where structural (e.g. economic) factors are acknowledged to be significant, they are still generally accorded a secondary role in the shaping of policy actions. As a result, most interpretations are rooted in discrete policy actions linked to particular and time-bound events unrelated to any core concept that could serve as an organizing principle (e.g. a theory of capital expansion) for understanding the observed continuities in U.S. policy over historical time. In contrast, this study contends that a focus on the interface between permanent (economic) and short-term (non-economic) objectives provides a more adequate explanation of U.S. imperial state policy in specific conjunctures. It is proposed that while ‘national security’ concerns, strategic interests, ideological outlooks and bureaucratic conflicts may directly influence Washington's policy toward Third World nationalism, these factors must also be understood in a context in which they converge, or are intertwined, with underlying long-term economic concerns (investment, trade relations, access to strategic raw materials, etc.)

It is through the organisation of labour that class interests and class antagonisms become manifest. A major problem with recent debates about the informal sector, petty commodity producers or the marginalised labour force is that their structural positions in the economy have not been translated into class analysis, whereby the social position of the sector of the labour force under discussion is clearly identified in relation to other groups in society. As a result, conflicting interests are not fully discussed and the capacity of the urban poor for organising and working towards the amelioration of their condition is ignored.