A Factor Analytic Test of the Theory of the Dual Economy

FOR over a century, there have been recurrent claims that capitalist economic development is characterized by a process of unbalanced growth, with technical and institutional changes unevenly distributed among industries. Theorists as diverse as Marx (1867, chapter 25) and Galbraith (1952, chapter 7) have suggested that, though the history of most industries is one of ongoing technical change and increasing concentration of production and capital, there nonetheless exists a recognizable collection of backward industries within which such a process has not occurred. Most recently, these ideas about uneven industrial development have been conceptualized in terms of the analytical construct of industrial dualism.' Proponents of the theory of the dual economyhave suggested that the American economy is composed of two distinct industrial groups: a core of powerful, concentrated, unionized, capital intensive, technologically progressive industries, and a periphery composed of industries marked by the absence of these features. Despite increasing interest in the theory of the dual economy in recent years-in large part, stimulated by heightened interest in dual labor market theories-there has been remarkably little effort devoted to investigating whether the American industrial structure can be characterized accurately as dualistic.2 In section I, a factor analytic test of the theory is proposed. Section II discusses the data employed in the study, and section III suggests plausible guidelines to aid in the interpretation of factor analysis findings. The results, presented in section IV, suggest that a dimension of core-periphery variation characterizes the data examined, and section V will show that this variation is consistent with the hypothesis of industrial dualism.