The Poor Rich Nation
The Poor Rich Nation
My next book will be on the political economy of Argentina
Argentina was once a wealthy country, but then became a relatively poor country. Explaining why is central to the country’s politics. Peronists argue that Argentina was ruined by the ruling class and their foreign masters. Adam Smith-style liberals such as the new president Javier Milei then blame the Peronists’ statism for their country’s decline. Their fellow travelers abroad can in turn hold it up as an example of what happens when there is too much government. Argentina becomes an international bogeyman—a case study of what not to do.
My new book project seeks a better answer. In The Poor Rich Nation: Argentina since 1810, I will attempt to explain how Argentina became a wealthy country and why it stopped being one.
In my PhD dissertation at the LSE, I looked at the impact of globalization on Argentina in the nineteenth century. I found that there was a long boom in the terms of trade after independence. As a result of the removal of the Spanish trade monopoly, combined with the falling costs of international transportation and cheaper manufactured goods, Argentina’s terms of trade improved by upwards of 2,000 from 1810 to World War I.
This long terms-of-trade boom allowed Argentina to become one of the world’s major exporters of agricultural products. Over 31 million acres of arable land were brought into production in the Pampas grasslands. Millions more were grazed by cattle.
Argentina then became a “poor rich nation.” It was wealthy, at a similar level to France and Germany. Yet it was not developed. In terms of political institutions, education, and health, Argentina lagged behind Northern Europe. Instead, it was at the level of Italy and Spain, two poorer Southern European countries.
My hypothesis is that Argentina had prospered in a period when it was more or less enough for a country to have abundant land to become wealthy. Government was relatively unimportant. Hence, outside of Buenos Aires, the state provided few public goods, such as schooling or sanitation. Policies aimed at promoting development beyond the agricultural sector were also limited. But it did not matter because Argentina had land and the terms of trade were improving by 2 percent per year.
Only when the terms-of-trade boom ended during World War I would the lack of state capacity become a problem. The provision of public goods and the formulation and implementation of public policies then became crucial for a country’s growth. Argentina lacked that capacity, and, as a result, ended the twentieth century relatively poor.
Much of my new book project will therefore be devoted to investigating the political origins of Argentina’s decline. I will try to explain why state capacity was so limited despite its wealth in the early twentieth century. Then I’ll look at how the country’s political system struggled to cope with the deterioration in the international environment after World War I.
Ideally, it will annoy both the liberals who argue that Argentina is a case of what happens when there is too much state and the populists who haven’t always covered themselves in glory when in power. The quality rather than the quantity of government has been the problem in Argentina.
If you can support me to write this book, it would be much appreciated. I am an independent scholar, based on a hill in Wales. My first book, provisionally titled King Cotton and the Whale: How Slavery Made American Capitalism, should be published by Harvard University Press in early 2025. While I am waiting, I would like to be able to write this book. I have already done much of the research for it, but now I need to sit down and type, type, type.
I am an independent scholar, so my opportunities for funding are limited. Any donation you can make to help me write The Poor Rich Nation would be fantastic.