ABSTRACT
In the nations that acquired large foreign debts in the 1970s, the debt crisis itself and related domestic austerity policies have developed as cornerstone features of a new international division of labor. This chapter provides a brief introduction to the historical transformations in the international division of labor since the 1940s and their impact on the structure and policies of Latin American governments. Internationalization of local economies has intensified as finance, manufacturing, agriculture, and labor markets have become directly dominated by multinational institutions. Populist demands for increased state spending and higher wages were matched by domestic business’s fears of socialism, capital flight, and a search for international allies. Theorists attempting to conceptualize the structure and developmental processes of the new international division of labor have drawn distinct themes. The world system governing international monetary and trade relations from 1945 until the early 1970s was negotiated at Bretton Woods in 1944.
