A short century ago the US and Argentina were rivals. Both were riding the first wave of globalisation at the turn of the 20th century. Both were young, dynamic nations with fertile farmlands and confident exporters. Both brought the beef of the New World to the tables of their European colonial forebears. Before the Great Depression of the 1930s, Argentina was among the 10 richest economies in the world.
A hundred years later there was no choice at all. One had gone on to be among the most successful economies ever. The other was a broken husk.
There was no individual event at which Argentina’s path was set on a permanent divergence from that of the United States of America. But there was a series of mistakes and missteps that fit a general pattern. The countries were dealt quite similar hands but played them very differently.
On the face of it the economies of the two countries also looked similar: agrarian nations pushing settlement westwards into a wilderness of temperate grasslands. In both nations, the frontier rancher – the gaucho and the cowboy – was elevated into a national symbol of courage and independence. But there were big disparities in the way this happened. America chose a path that parcelled out new land to individuals and families; Argentina delivered it into the hands of a few rich landowners.
Immigrants came to Argentina as well, but they came later and with fewer skills – largely low-skilled Italians and Irish. In 1914, a third of Argentina’s population was still illiterate. America imported the special forces of British agriculture, and in addition a large number of literate, skilled workers in cloth and other manufactures. Meanwhile, Argentina had more land than it could efficiently work. But it was well into the 20th century before the rot in the foundations was apparent.
Economies rarely get rich on agriculture alone and Britain had shown the world the next stage, industrialisation. America grasped that building a manufacturing industry would allow it to benefit from better technologies, while trying to squeeze a little more grain out of the same fields would not. It was not as if Argentina consciously rejected the same course. It could scarcely avoid growing its own manufacturing industry. But when industrialisation did come, prevailing prejudices ensured it was limited and late. Argentina’s elites saw no reason to risk their status and livelihoods in the fickle new sphere and anyway there were not enough new workers to fill the factories. Argentina brought the same tendencies that it had to the ossified agricultural sector, preferring cosy, safe monopolies to the brutal riskiness of competition. Its wellbeing rested on farm prices holding their own against the prices of manufactured goods, and on global markets remaining open.
All in all, it would be wise to keep betting on the US finding the right way out of the financial crisis and Argentina continuing to harm itself. Of the two great hopes of the western hemisphere in the late 19th century, one succeeded and the other stalled in the 20th. It was history and choice, not fate, that determined which became which. It is history and choice that will determine which is which in a century’s time.
