Argentina's Boom Years

From The Penguin History Of Latin America, by Edwin Williamson (Penguin, 2003), Kindle pp. 277-278:

With Buenos Aires at its head, the new Argentina was set upon the road to stability and modernization. In the course of the 1860s and 1870s, the liberal presidents Mitre, Sarmiento and Nicolaás Avellaneda created the institutions of a centralized nation state: a professional army, an integrated judicial system, a national bank, a system of public schooling, public libraries, an academy of science and other technical institutions. The railway and telegraphic communications began to link the hitherto fractious conservative provinces to Buenos Aires and, through it, to the world outside. The 1870s were also a time of expanding frontiers and absorption of massive new territories. Victory in the Paraguayan War (1865–70) yielded territory in the north and north-west. Then, in the south, General Julio Roca led another Desert Campaign (1879–80), which exterminated or reduced the nomadic Indians of the pampas, releasing vast acres for settlement and cultivation.

From 1880, the year in which Buenos Aires was constitutionally recognized as the federal capital of the nation, Argentina embarked on an astonishing rate of growth – sustaining an annual average of at least 5 per cent until 1914 – to become one of the richest nations in the world. The territorial acquisitions of the 1870s invigorated the economy, based as it was on cattle, sheep and, increasingly, cereals. As always in Argentina, there was a pressing need for labour, and now more so than ever – labour to work the land, to fence in and convert the barren pampas into wheatfields, and to lay the railway that would link up the provinces and turn the disparate regions into an integrated, modern nation. European immigration was therefore encouraged, and workers – mostly from Italy and Spain – flooded into this vast, empty country. In 1870 the population was less than 2 million; in the next fifty years approximately 3.5 million immigrants would come to Argentina.

The capital investment and technical expertise required for such a massive economic transformation were beyond the resources of a country that had been continually drained by military upheavals and whose economy had been based on rudimentary cattle-raising. Such resources were provided overwhelmingly by the British, who became the major customers for Argentine wheat and meat, the latter now available for export to Europe thanks to faster steamships and the introduction of frigoríficos (meat-chilling plants). A bilateral pattern of trade emerged: Argentina imported manufactured goods from Britain in exchange for her exports of foodstuffs for the British industrial working classes. However, British business also established a commanding position in the internal structure of the Argentine economy: British companies owned the railways, the telegraph, the new meat-processing plants and many of the banks and merchant houses operating in Buenos Aires; this made Argentina potentially vulnerable to external economic pressures, though it was not perceived to be a problem by any political force in the country at the time. A significant Anglo-Argentine community came into being, its upper echelons setting the social tone for the new plutocratic estanciero élite.

There were other structural imbalances. The opening up of the new territories after the ‘Conquest of the Desert’ did not lead to the emergence of a rural middle class of medium-sized farmers, as had occurred in the Midwest of the USA and as Argentine social reformers had advocated. The sheer volume of land was too great for the number of available purchasers; over-supply kept prices low until the end of the century and this cheap new land was snapped up by established landowners and merchants, who were able to expand their existing holdings. Impoverished European immigrants, on the other hand, could not initially afford substantial holdings; they started off as tenant farmers or sharecroppers in the hope of eventually purchasing their plots and extending their property, as in fact many of them did. Yet the pull of world demand for Argentine foodstuffs was such that agrarian export development encouraged ever greater concentration of resources, so that the pattern of distribution of new land in the end came to resemble the classic latifundia, the huge estates characteristic of the Hispanic seigneurial regimes established in America since the sixteenth century.

The immigrants filled jobs in industry and public works, and worked as seasonal labourers in the countryside, returning to live in the cities out of season. Wages in the country were generally good – good enough to attract the golondrinas, the ‘swallows’ who arrived from Italy and Spain for the harvest and then returned home. But most immigrants stayed and settled in the cities, especially Buenos Aires, where they suffered the vicissitudes of inflation and recession. Towards the end of the century, the market became over-supplied with labour and wages began to fall, exacerbating social tensions. Argentina’s transformation in the last quarter of the century thus resulted in a strangely skewed economic structure: the rural economy was in the hands of a relatively small creole élite of estancieros, the cities were inhabited by a large and growing proletariat, many of foreign extraction, while the booming export-economy was dominated by British financial and commercial interests.