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Latin American Report: Argentina at the Industrial CrossroadsAuthor(s): Hugh FoxSource: The North American Review, Vol. 253, No. 2 (Mar. - Apr., 1968), pp. 2-3Published by: University of Northern IowaStable URL: http://www.jstor.org/stable/25116742 .

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I LATIN AMERICAN REPORT

j ARGENTINA AT THE INDUSTRIAL CROSSROADS

If Thomas Jefferson had had his way the United States

would be much more similar to Argentina than it is now. First

of all, Jefferson had a pro-agricultural anti-industrial bias. In

his Notes on Virginia he wrote:

Those who labor in the earth are the chosen people of God . . . while we have land to labor then let us never wish to see our citizens occupied at a workbench, or twirling a dis taff. . . . for the general operations of manufacture, let our

workshops remain in Europe.

Jefferson's idea was to have a strong agrarian republic whose

products could be exchanged for manufactured goods.

Secondly, Jefferson envisioned the United States as a to

tally white country. He was not Anti-Negro, but felt that the

"deep-rooted prejudices entertained by the whites; ten thousand

recollections, by the blacks, of the injuries they have sustained," would make the peaceful conmingling of blacks and whites

impossible. In his Notes on Virginia Jefferson proposes a plan for slowly replacing the former slaves with whites, settling the blacks in a

colony somewhere outside the United States

itself.

Argentina fulfills two important requisites for the Jeffersonian

ideal state: it is primarily agricultural, and predominantly white. It is not, however, "free" at present, but under the con

trol of a military dictator, General Ongania.

Beginning with Hamilton there has always been a strong pro industrial feeling in the United States, and recent economists

like Walt Rostow have stated that in the modern world any

non-industrial, primarily agricultural state is doomed to failure.

According to the Rostow model, Argentina just hasn't made it.

In a very basic book for the understanding of Argentina, Argentina, Sociedad de Masas, published by the University of

Buenos Aires in 1966, Guido Di Telia y Manuel Zymelman, take a careful look at Argentinian economic development in

terms of the schemata proposed by Rostow in his 1952 arti

cle in the Economic Journal, "The Take-Off into Self Sus

tained Growth," and come up with the conclusion that Ar

gentina didn't really begin to "take off" industrially until 1933.

They divide Argentinian economic history intn the following

periods: 1) Traditional . until 1853 2) Transition . 1853-1880 3) Preconditioning . 1880-1914 4) A Long Period of "Stalling" . 1914-1933 5) Take-off. 1933-1952 6) Readjustment . 1952

This "economic" breakdown in a sense gives the whole of

Argentinian history in a nutshell. Independence from Spain was declared in 1810, but it wasn't until 1853, after 43 years of civil war, that any kind of stable central government

was

established and economic or any other kind of development could begin. Between 1853 and 1880 Argentina gradually de

veloped an agricultural economy based primarily on the un

believable fertility of the Argentinian pampas, an area of flat

plains unique in South American geography. Without this

"great plains" area, of course, the entire history of Argentina

might have been different.

At first the pampas had been used primarily for the raising of sheep and cattle. Then slowly toward the end of the nine

teenth century agriculture became more diversified, immigration

(uniformly white) was speeded up, and a system of railroads

was established throughout the country. The period of "stalling" was brought about by a reluctance

on the part of the large landowners to invest their money in

industry. Argentina had always produced much more than it

could consume. There was always a surplus, and consequently

there was always a favorable trade-balance, and the gains from agricultural products could always buy manufactured

goods from Europe and the United States. It was the perfect Jeffersonian situation?an agricultural nation strong and vital

enough to avoid the dehumanizing consequences of industriali

zation.

Only the First World War amply demonstrated the weak nesses of this kind of economic situation. International trade was disrupted and suddenly Argentinians became aware of just how dependent they had become in terms of basic manufac

tured goods. And not only that, but the prices of agricultural

products in the international market have tended to decrease

relative to the prices of manufactured goods; which means es

sentially that it took three times the 1951 tonnage of grain to

buy the same machine in 1962.

Still the 1918 crisis was weathered, and it wasn't until the

much more serious world economic crisis of the 1930's (es

pecially 1933) that Argentina was forced to begin to indus

trialize. Since 1933 there has been a growing concentration on

industrial growth. Wages have gone up in the lower classes,

stimulating buying power, and Argentinian industry has to

some extent been able to meet the new consumer demands

in terms of national production growth. This was in the 1940's and early 1950's. Since the mid 50's,

however, there has been a kind of paralysis of Argentinian

industry, accompanied by an increase in population and a

stabilization of agricultural production, a situation which pro duces a decrease in per capita production. The economy, in

other words, has been sliding backwards.

Some commentators assign some of the blame for this

negative development on the large percentage of foreign capi tal which has gone into Argentinian industrial development.

Marcelo Isovich in his Argentina, Econ?mica y Social (Bue nos Aires, 1965), for example, claims that some 30-35% of

the total industrial investment is in the hands of foreign in

vestors. He pictures the big landowners like Torquinst, Bee

car V?rela and Bracht leagued with foreign enterprises, drain

ing profit out of the Argentinian economy. Certainly U.S. and

British investment in Argentina is not there without profit-mo tives, and there can be no doubt that foreign control of large amounts of national industry definitely injures the overall vi

tality of any economy, but unfortunately Isacovich undermines

his own credibility by aligning himself with the socialist propa

ganda line and making statements like :

. . . Cuba, situated at the doors of the United States, demon strated that any Latin American country can cut its ties with imperialist capital, make its economy independent and assure its rapid growth and diversification. . . .

(254) The facts actually are that Argentina, like all other primarily

agricultural countries, is at a permanent disadvantage as long as

she depends on the buying power of her agricultural products to obtain manufactured articles. Furthermore, seeing that there

is not enough domestic capital to get industrial development

going, Argentina, like the rest of Latin America, is necessarily

dependent on the investment of foreign capital. The secret of

long-range industrial development lies in slowly replacing

foreign with domestic capital; only the problem here is that once

foreign capital enters into the economy of a country it is not

easy to dislodge it. Regarding Cuba, all that Cuba has done

is to switch from dependence on the United States to depend ence on Russia.

The irony in Argentina is that the same landowning class

that opposed industrialization in the nineteenth century is now

leagued with foreign capital and monopolizes most of Argen tinian industry.

Another problem with Argentinian industry is that very

2 The North American Review

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little of it is "heavy." Food, clothing, shoes, cars, television

sets, all are produced in Argentina, but it wasn't until 1963 that the first major steel mill in the country was finally com

pleted?at San Nicolas close to Rosario.

Certainly Rostow's basic contention that steel must form the basis for any "modern" country's economy has a kind of

validity. Steel is the basis for all other machinery, and as long as a country is dependent on external sources for steel it can

not really get a full industrialization process underway.

Regarding steel, though, Argentina's future looks good. In

1963 the San Nicolas plant produced %/4 m. tons, which is a

little less than half of its expected capacity. On the other

hand, however, even with maximum production Argentina in

the near future will only be able to produce one-half of the

steel it needs to supply the rest of its industries. If Argentina is to ever catch up with the rest of the industrialized world

it will need immediate major development in the area of steel

production.

Argentinians really are much too sophisticated to develop in any other way. In fact from the surface, Argentina does

n't look like an underdeveloped or developing country at all?

but a super-developed country with unlimited possibilities for the future.

What has happened is that Argentina's strong agricultural base, with a small population and higher buying power for

agriculturally-based products, was able to surge forward as no other country in Latin America has. Furthermore, racial uni

formity eliminated the social problem that beset countries like Peru, Bolivia or Colombia?the problem of large marginal groups totally outside the organic functioning of the national economy. In a sense Jefferson was right. If there was some fixed stability in worldwide agricultural prices and if the total Ar

gentinian population were reduced (and controlled), beef and

grain still could keep the Argentinian economy afloat. The

possibility, anyhow, of an agriculturally-based economy should

not be entirely frowned on. Without a strong, expanding agri cultural base (and this is the case in most Latin American

countries) it seems that no significant development is possible. Of course, Jefferson was thinking of a

society in which the machine as such had very little importance. Montieello, his own estate, was literally an agricultural paradise. But this was before television and radios, electric clocks, tape recorders, electric lights, typewriters, cars, planes, washing machines, dish

washers, electric ovens and record players. In modern times even much "culture" has an electronic-industrial base.

Still, with Argentina's strong agricultural base, the average

Argentinian eats well. Meat is cheap, and food is more plenti ful in Argentina than any place else in Latin America?

more plentiful and tastier. Argentina's predominantly Italian and secondarily Spanish racial background has given an Italian

flavor to Argentinian life, and besides the traditional steaks,

Argentinian food is primarily based on "pasta.** The pre-industrial aristocracy that grew out of the nine

teenth century monopolization of the lands in the hands of a few families created a highly literate and cultured upper and

(eventually) middle class. You do not need a highly devel

oped steel industry to be literate and Argentina is highly lit erate?Buenos Aires is one of the great cultural capitals of the world.

Take a performance of the St. Matthew Passion in the Te

atro Colon for instance. The theater itself is enormous and seats thousands. Every seat is filled. Elegance everywhere.

New York may be able to match the elegance of Buenos Aires, but cannot top it. The houselights dim, the curtains part, the

stage is filled with chorus and orchestra, the conductor comes on stage, begins, the whole audience "participates" in the

performance. It is an educated audience, an audience finely trained in the art of music appreciation. Half way through the performance the girl next to me, wrapped up in the music,

begins to cry. Or take the theater scene. Broadway plays are presented si

multaneously (in Spanish) with their production in New York, and at the same time you find the best of European and Ar

gentinian theater itself on the boards. The Royal Hunt of the

Sun, the latest play by Albee, the first Spanish presentation of a

play by Valle-Inclan, the Spanish writer, originally presented in French in 1923 (Las Luces de Bohemia)?the Lights of

Bohemia, a new play (Se Acabo la Diversion ? The Fun's

Over) by the Argentinian playwright Juan Carlos Gene, a

production of the contemporary Polish playwright Slawomir Mrozek's La Mar Estaba Serena (The Sea Was Calm), a re vival of the classic Spanish drama La Celestina, a production of Hello Dolly, Behen's The Hostage. . . .

actually there is so much theater going on at any one moment in Buenos Aires that you can spend a month seeing two plays

a night (usual

ly there are two performances?precisely for that kind of

theatergoer) and never the same play twice. In Buenos Aires you don't really feel that you're next to Bo

livia and Chile. You're in Europe. The sidewalk cafes, the

shops, the book stores open until one or two in the morning have the flavor of Rome or Paris or Berlin in the twenties. The faces are Italian or

Spanish. No Indians. No Negroes. The

only difference from Europe is that things are cheaper. So Jefferson did have a point, and Rostow's steel-production

take-off diagnosis for the "success" or failure of a country in

the twentieth century is far from comprehensive. Although Argentina still is "underdeveloped" industrially, culturally per haps it is more developed than even the United States. But then again perhaps "culture" as a value has its drawbacks. In the past "culture" has been the result of a stratified, pre-indus trial social system in which the "culture" of the few has been at the expense of the many. In the beginning of the Industrial

Revolution this class stratification changed very little. The ma

jor change that the Industrial Revolution effected in eighteenth century England was to move the lower classes into an urban environment worse than the rural environment that they left behind. Gradually though, mainly as a result of collective

bargaining, industrialization has increasingly come to mean the betterment of the lower classes. In Argentina, on the oth er hand, as Juan Jose Sebreli points out in his Buenos Aires, Vida Cotidiana Y Alienaci?n (Buenos Aires, Daily Life and Alienation), the worker is still "immersed in the solitude im

posed on him by the society that rejects him." (188) Hence his political polarization, his sense of "group."

The "culture" that Argentina has produced has been aristo cratic. Agrarian societies tend to be aristocratic. Industrial so

cieties, on the contrary, tend toward mass (ive) culture, per haps losing something in intensity, but certainly gaining much in "homogenization" of the overall society. This, perhaps, is

Argentina's future?a transformation into a "pop" culture like the United States. Industrialization seems

inevitably to promise such a transformation. And without industrialization, it is un

likely that even the aristocratic culture that has already been built will survive in its present form.

Hugh Fox

March-April, 1968 3

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