Argentine Economy

Topics: Argentina, Buenos Aires, Economics Pages: 11 (4089 words) Published: December 9, 2012
The economic history of the Republic of Argentina at the end of the 19th and beginning of the 20th century was heavily obscured by the expansion of U.S economic and political forces in the western hemisphere and other parts of the world. During this era of massive integration of world markets and rapid technological developments, few were aware that a little more then five thousand miles south of the United States a similar economic expansion was occurring in a southern-most country of Latin America. This essay will explore what most scholars refer to as the Argentine Riddle. It will list and analyze the factors that made possible for a rapid expansion of the Argentine economy from the 1860s onto the 1930s. Those factors were its holdings over the pampas, foreign investment, and large waves European immigration. The short-lived glory of the Argentine economy went on to represent one of the greatest symbolic achievements by a former colonial entity. Scholars refer to the Argentina Riddle as a series of fortunate events in which market prices, demand for agricultural exports, immigration flows, and foreign investments were all perfectly aligned to aid the Argentine economy in its quick and decisive economic expansion. “There was no national economy, properly speaking, within the present geographical limits of Argentina” (Ferrer, 32). The decades following Argentinean Independence in 1810 were plagued by political and economic instability. In order to better understand Argentina’s rapid expansion, it’s important to know the economic and political forces that dictated Argentina’s fate up to the period of expansion. In 1826 under the regime of Argentina’s first president Bernardino Rivadavia, the state saw itself engaged in war with neighboring Brazil. The war was so detrimental to the Argentine economy that a civil war followed resulting in the removal of the Rivadavia and the creation of the Argentinean Confederation. Starting in 1835 Juan Manuel Rosas would lead the confederation, in contrast to Rivadavia he indentified himself as a “federal” (Rock). A “federal” platform included the autonomy of provincial governments and the distribution of external commerce taxes. “Under Rosas the cattle industry grew significantly and Argentina found itself paying its way to international markets and was doing so by reason of expansions in this cost effective sector” (Ferns, 33). Juan Manuel Rosas was overthrown in 1852 by one of his own governors, General Justo Urquiza. General Urquiza ruled the Argentine confederation until 1860, the year where the Argentine economy begins to structure itself as an export-led economy. In between the years of the Argentine independence and the period of expansion, the state experienced various regime changes and a civil war. The regime along with the civil war inhibited stability and growth. Oligarchy style politics introduced by Juan Manuel Rosas favored the small wealthy minority creating policies and laws that ensured their economic dominance and repression of the poor (Rock). These oligarchy policies eventually led to creation of large inequality gap in Argentinean society. At the core of every government is a solid infrastructure. With all the internal conflict that cursed Argentina shortly after its independence, the country entered the second half of the twentieth century with no such infrastructure. It lacked an effective system of taxation, transportation, and manufacturing. The state heavily relied on imports and exports to collect revenue for the state and attracted little investment due to its weak stability (Rock). For the reasons previously mentioned, many scholars narrow down the years of the early 1860s, as the period in Argentinean history that catalyzed it’s political and economic expansion: “The modern political economy of Argentina dates from around 1860. At this point came the fist great export book led by wool, and the formation of the national state. From this time forward...
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