Industry and Development in Argentina This book explores the twists and turns in Argentina’s modern economic his tory and the debates that raged there around a problem common to all former colonies: how to achieve a level of economic growth for its population in a world characterized by unequal economic relations between the industrialized nations of the north and the commodity producers of the south. This new perspective examines the history of ideas surrounding industrialization and economic development in Argentina, drawing on a rigorous investigation of multiple sources. It demonstrates Argentina’s role as a laboratory for and dis seminator of ideas that would eventually become the common property of all the developing world. Influential thinkers such as Raúl Prebisch and Aldo Ferrer, leading figures in twentieth century Latin American economic thought, developed important ideas such as unequal international trade relations, the promise and limits of Import Substitution Industrialization, the role of the state in the development of a national capitalism. These were the forerunners of similar concerns in other countries in Latin America and elsewhere in the world. The book will be of interest to historians, economists, sociologists of economic development, and related disciplines concerned with questions of global economic inequality. Marcelo Rougier is Professor of Economic History at the Universidad de Buenos Aires, Argentina, CONICET Principal Researcher at Instituto Inter disciplinario de Economía Política de Buenos Aires (IIEP-Baires), Director of the Centro de Estudios de Historia Económica Argentina y Latinoamericana (CEHEAL) and Co-editor of the online journal H-industri@. Juan Odisio is Professor of Economic History at the Universidad de Buenos Aires, Argentina, and at the Universidad Nacional Autónoma de México, CONICET Associate Researcher at Instituto Interdisciplinario de Economía Política de Buenos Aires (IIEP-Baires), and Co-editor of the online journals H-industri@ and História Econômica & História de Empresas (Brazil). James Brennan is Professor Emeritus of History at the University of Cali fornia, Riverside. He is the author, editor, and translator of numerous books on modern Argentine history. His most recent book is Argentina’s Missing Bones: Revisiting the History of the Dirty War. 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Medina Albaladejo, José Miguel Martínez Carrión and Salvador Calatayud Giner Property, Power and the Growth of Towns Enterprise and Urban Development, 1100-1500 Catherine Casson and Mark Casson For more information about this series, please visit: www.routledge.com/ Routledge-Explorations-in-Economic-History/book-series/SE0347 Industry and Development in Argentina – An Intellectual History, 1914 1980 Marcelo Rougier and Juan Odisio Translated by James Brennan First published 2023 by Routledge 4 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 605 Third Avenue, New York, NY 10158 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2023 Marcelo Rougier, Juan Odisio, and James Brennan The right of Marcelo Rougier, Juan Odisio, and James Brennan to be identified as authors of this work has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library ISBN: 978-1-032-39836-5 (hbk) ISBN: 978-1-032-39839-6 (pbk) ISBN: 978-1-003-35162-7 (ebk) DOI: 10.4324/9781003351627 Typeset in Bembo by Taylor & Francis Books Contents Introduction: Why a History of Ideas on Industry? 1 1 Post Bellum: The Beginnings of “Industrialism” and the Revista de Economía Argentina (1914–1930) 9 2 Post Crisis: The Construction of a Consensus: State Intervention and Industrialization (1930–1940) 43 3 In Bello: Wartime Alternatives (1940–1945) 87 4 Post Bellum: The Beginnings of Industrial Policy and Postwar Dilemmas (1945–1950) 128 5 Foreign Capital as a Response to External Constraints (1950–1962) 170 6 The Renewed Heyday of the Industrial Debate (1962–1965) 215 7 Consolidation of the “Industrial-Export” Consensus (1965–1969) 260 8 From Dependency to Peronist Nationalism (1970–1975) 305 9 Alea Iacta Est: The End of the Industrial Consensus (1975–1980) 350 Epilogue 382 Index 387 Introduction Why a History of Ideas on Industry? The Place of Industry in Society It is difficult to deny the importance of industry and its influence on economic and social development. Indeed, the terms “economic development” and “industrialization” have often been used synonymously. Although the rela tionship between these two processes is complex and each can be analyzed from different perspectives not strictly economic, it is unquestionable that industry occupies an important place as a bearer of the transformations that, through advances in science and technology, encompass the economy and society. Industry manufactures machinery, equipment, diverse inputs, and introduces reforms in the organization of resources that diversify production, raise productivity, strengthen the linkages between multiple economic sectors, and sustain the very activities of research and development, that is to say the advance of knowledge. Technological development is the product of human endeavors and, ultimately, of a determined social dynamic. Industrialization is not just a collection of factories. It is an entire social system. Industry does not develop in a void, it requires insti tutions, companies, specific policies that ensure its development. Moreover, industrialization reorganizes all human relationships, creates the industrial bour geoisie that Marx spoke of or the innovating businessman in Joseph Schump eter’s terminology. It also creates wage earners, the industrial worker, causes mass migrations of rural populations to urban centers, among other social changes. In the course of these economic and social transformations, the development of manufacturing occasions an ensemble of representations, ideas, and specialized knowledge that analyze, promote, and critique. In other words, industrialization is as much a social and cultural formation as an economic one. Thus, its study requires dealing with dimensions for analysis that go beyond the technical questions of the manufacturing process. This book arose from a necessity derived from the research enterprise itself.1 After studying for years industrial policies, sectors, companies, and entrepre neurs it became increasingly clear to the authors that behind the policies and the social and economic conditions for their deployment there was a corpus of ideas that could well be considered the substrate of these policies, deeply DOI: 10.4324/9781003351627-1 2 Introduction interconnected with the material conditions in which industry developed. These ideas were expressed by industrialists but not only them, also by intel lectuals, government officials, politicians, military officers, and other social actors, and they distilled the whole social fabric. It soon became clear that contemporaries’ ideas about industry and its problems constituted a dimension of analysis of great interest to better understand any other angle of industrial history; not only as a complement but as a gateway to the analysis of a complex social process such as industrialization and economic development. The insufficient attention paid to the realm of ideas was revealed with the surprising confirmation of their almost null treatment by scholars of industry in Argentina, a dearth of studies that considered ideologies, debates, and mentalities linked to the industrial sector and more generally to economic development. The scholarship on industry and development is unquestionably abundant and rich for Argentina. There is an enormous amount of information of a statistical nature, on industries and individual firms’ general evolution. Also, in recent years a great deal of new research has appeared on the special characteristics of indus trial companies, on the incorporation of technology and their profitability, for example. On the other hand, in an older scholarship there are important studies on the behavior of social actors tied to industry such as industrialists and workers as well as their organizations, business and trade unions, and their demands. Finally, public policies affecting industry have also been relatively well studied for various periods in which we can find detailed studies on tariff and credit policies and others specific to the manufacturing sector (Rougier 2021). In other words, there exist important studies on the history of industry itself, but we know very little about the ideas that are deployed around it. Significantly, none of the great, classic works dealing with industry, such as that of Adolfo Dorfman (1970) or Jorge Schvarzer (1996) put great emphasis on the ideological substratum of industrial policies or the debates surrounding the sector that have occurred in different historical contexts. This void becomes even greater when considering that the debates on industry have been present at the international level, at least since Adam Smith suggested theroleofindustrialization in “the wealth of nations.” Since then, industrialization has occupied a central place in debates on economic development and its pro blems. With varying emphasis and assessments—linked to the socioeconomic situation of each historical moment as well as particular “climates of opinion”—the subject has reemerged in the public arena, being of supreme relevance even in present days. The dispute on the necessity (or not) to favor industry’sdevelopment and the weight of manufacturing in the economy has occupied a good part of modern world economic history. However, in the case of less developed countries, the differences with the developed world are notable, not only in regard to the pace of industrial growth and the structure and organization of production, but also, and to an important degree, “with regard to the intellectual climate in which industrialization takes place” (Gerschenkron 1968, p. 17). While Argentina never became an advanced manufacturing nation due to the stubborn persistence of obstacles for its Introduction 3 development, tied to institutional and social impediments and the insufficient maturity of its productive structure; the need to deepen factory production has been a constant refrain. Echoes of the voices favorable to a greater industrializa tion can be traced back to very early periods, with important antecedents since the final decades of the nineteenth century, when there were heated debates on the character of foreign trade and the tariff policy intended to protect the initial factory endeavors in the local scene. Thus, successively, the intrinsic fragility of the national economy, displayed in reoccurring and persistent foreign crises during the era of the so-called agro-export model, opened a debate on the role that industry should have. Later, the closing of markets during the interwar period and the growth of the “light” manufacturing sectors inspired the inter vention of intellectuals and various centers of opinion inserting the industrial question into the most diverse social and cultural spaces. In the 1960s and the early 1970s, the intense search for establishing “complex” industries combined with the constant dependence on trade and financial flows for the balance of payments, encouraged deep debates on “national industry” and sparked numer ous studies and specific policy and institutional proposals. Each of these periods was marked by the intellectual and political disputes surrounding the country’s industrialization as well as their consequences. This book takes as its starting point the manifold questions which at broad strokes refer to the specificity of national thought on industry, the conditions in which industry developed, the dilemmas that were posed for resolution or the “anomalies” that were identified in the workings of Argentina’s economic structure. We study the ideas, interpretations and initiatives that circulated not only with regard to the problems of national industry but also the broader panorama of the economy and economic development in the years that begin with the outbreak of the First World War until the threshold of the crisis in the industrialization model at the end of the 1970s. We interpret this period as Argentina’s “short industrial century.” In these years diverse opinions took shape regarding the country’s development and its possibilities, opinions formulated by sundry actors (social scientists, politicians, military officers, among others) that involved a strong appreciation of the place that belonged to manufacturing in the general dynamic of the economy, politics, and even social change. The focus presented in this book frames historically the principal con troversies on industry and economic development, alluding thereby to the questions of the national economy as well and considering the participation of the actors within a specific intellectual domain, structured as a system of rela tions in competition with groups of diverse opinions (Bourdieu 2000). The dynamic in the “domain” of debate can be understood as having two central threads: from the external perspective, because of the problems that afflicted national industry, inseparable on the other hand from those of the country’s general economic situation, and second from the internal perspective also, because of the theoretical and practical approaches tested in each period to deal with those same problems that the macroeconomic situation had been delineating.