Poverty and the State: A Study of Argentina

The following was submitted to the Georgia Tech Journal of Economics in 1997.

by John D. Breen

Georgia Institute of Technology

October 15, 1997

The history of Argentina is one of Indian settlement, colonial exploration, republic, military dictatorship, and, more recently, incipient capitalism.  Regrettably, it is also one of varying degrees of poverty, a condition which throughout the history of man has been ubiquitous to all peoples, but which in recent times has been confined to those inhabiting regions of the so-called ‘Third World’.  Argentina is unlike many of its poverty-stricken brethren in that it once emerged from the poverty of its time, only to later plummet back into it.  The effort of Argentina to duplicate its earlier revival has, particularly since the latter 1980s, been impressive, though the lessons of its history should be heeded and applied.

The Methods By Which Poverty is Described

1. Famine

A proper discussion of poverty in Argentina, or, for that matter in any region, can begin only after a careful analysis of the nature and causes of poverty itself.   The most obvious manifestation of poverty is and has historically been famine, a condition to which the world has forever been accustomed.  Notwithstanding the severe famines of Rome in 435 BC, England in 1235, and others of those periods in which famine was the normal state of affairs, the Encyclopedia Britannica lists thirty-one major famines prior to 1960.  Among these are the 1586 English famine which precipitated the system of Poor Laws, the eight 18^th century French famines including that of 1788 which accelerated revolutionary tendencies, and the Irish potato blight of 1846.[1] [2] 

Aside from the horror implied by the numbers, the most notable aspect of the list is what it does not contain.  Since the spread of the Industrial Revolution around 1800, not a single country sympathetic to a free market appears.  This implies either that the want of such a market, and not crop failures, are the primary impetus for famine, or that for some reason such failures affect only socialized economies.  To raise the question is to answer it.

Free market industrialized countries are able to withstand crop failures of whatever cause by exchanging the surplus of their industrial production for food products from abroad.  One of the countries from which the food would once invariably arrive was Argentina, which till the 1940s was the principle producer and exporter of beef.  By 1971, however, collectivist policies forced the Argentine state to ration even domestic consumption of beef.[3]

2. Population

Joining famine as a victim of the Industrial Revolution were the prophecies of Rev. Thomas Malthus, who in 1798 published An Essay on the Principles of Population. In it Malthus introduced his famous assertion that population growth would so exceed that of the food supply, that famine and disease would be the inevitable and only check upon it. 

Malthus postulated that ‘the human species would increase in the ratio of – 1, 2, 4, 8, 16, 32, 64, 128, 256, 512, etc. and subsistence as – 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, etc.’, and that ‘the increase of the human species can only be kept commensurate to the increase of the means of subsistence by the constant operation of the strong law of necessity acting as a check upon the greater power’ of  the human desire to procreate.[4] 

The misfortune of Malthus was that of writing at the onset of a period which would invalidate the consequences, though not necessarily the essence of his theory.  What Malthus correctly advanced was the law of diminishing marginal returns to a fixed quantity of land, given an increase in labor.  What his theory of population also fixed, however, was the state of agricultural technology, the progress of which has enabled the populations of  industrial societies to not only blossom, but prosper. 

Moreover, with the notable exception of the United States, no perceptible correlation between the availability of natural resources and a scarcity of poverty exists.  Indeed, the fixed land quantities of which  Malthus lamented are distributed much more generously to countries such as Russia and Argentina than they are to those such as Singapore, Hong Kong, and Japan.  Yet Russia, with a population density of 23 persons per square mile, and Argentina, with but 32, have since the middle of this century suffered poverty and famine to a degree far greater than that of a Japan  (density 861/sq.mi.) or Singapore (11,702/sq.mi.).[5]

What the former countries have also suffered to a greater degree, however, are interventionist government policies, the effect of which is to deprive people of the free market price mechanisms necessary to allocate resources toward the production and procurement of those goods most desired by ultimate consumers. Included among these goods, most especially in countries with minimal capital accumulation and short structures of production, are the essentials of life.

In those countries in which capital is left free, ‘the increase in population figures does not create supranumerary mouths, but additional hands whose employment produces additional wealth.  There are no able-bodied paupers.’[6] The conclusion appears therefore to be that neither population nor want of resources, but rather government interference and capital restrictions, correlate positively with ubiquitous economic destitution.  As capital becomes abundant relative to population (labor), the latter will necessarily become more valuable.  This value will manifest itself in price (i.e., wage) increases for the relatively scarce labor commodity.

3. Distribution of Income

For inducing universal poverty, an indictment is often leveled against the distribution of income within a country.  Only in a restricted economy can income be ‘distributed’, for on a free market it is created, and therefore accrues to each person according to the marginal value product of his output. 

Unfortunately, the impoverished nations of the world are that way primarily because a free market does not exist, and income is, in fact, distributed according to the desires of the ruling aristocracy. The distribution argument implies that were the aggregate output of a society to disperse equally among the populace, injustice, if not the condition of poverty itself, would be eradicated.  As William Baumol and Alan Blinder state, ‘The market is generous to those who are successful in operating efficient enterprises…, and it is ruthless in penalizing those who are unable or unwilling to satisfy consumer demands efficiently.’[7]

To detect and analyze income inequality within a country, a Lorenz Curve is constructed and compared to that of another country. As the 45 degree ‘line of perfect equality’ is the position to which each country should aspire, those with curves bowed furthest right ‘distribute’ income less equally and are thus less desirable. That notwithstanding, the 1993 per capita income of the aggregate United States ($24,700) far exceeded that of the United Kingdom ($16,900) or Sweden ($17,600)[8], though to each it possessed relatively similar Lorenz Curve. The Lorenz Curve may therefore be more accurately described as an indicator of how well one group is faring relative to another, yet it reveals nothing of the absolute affluence or poverty within a society. 

A country in which no one possesses anything would appear by a Lorenz Curve to be one of ‘perfect equality’ and therefore more ‘just’ than that in which the poorest possesses one tenth that of the richest billionaire, yet the latter country obviously boasts less poverty.  Indeed, perfect equality on a Lorenz Curve implies perfect socialism in that each person must earn the same amount, thereby eliminating the very existence of income groups. 

Without wage inequality, however, the market is without the mechanism which provides incentive to work and invest.  As Mises noted, ‘The inequality of incomes and wealth is an inherent feature of the market economy.  Its elimination would entirely destroy the market economy.’[10] Even such a free market skeptic as J.M. Keynes wrote that it was ‘the inequality of the distribution of wealth which made possible those vast accumulations of fixed wealth and of capital improvements which distinguished [the 19^th century] from all others.’[11] 

Though income inequality is often prevalent in countries such as Brazil and Argentina, it is in these countries the cause rather than the fact of inequality which must be eliminated.  The principle cause is a political system which grants monopolies and subsidies to favored businesses and unions on the basis of nothing other than connections and political quid pro quo. Elimination of these favors would permit entrepreneurial accumulation of capital and fixed wealth which renders possible the execution of  projects which would otherwise be unrealized. 

Entrepreneurs endeavoring to complete the projects would compete on a free market for production factors, thereby bidding up factor prices, including wage rates.  The rise in wage rates is effected by increased productivity. The advances in productivity reduce consumer goods prices, thereby further increasing real wages. The impoverished condition of the common laborer is therefore alleviated by the increase in his marginal value product the initial savings and capital accumulation  permitted.[12]

4. Wages and Subsistence

A common means by which poverty is measured is a head-count of persons whose annual income lies beneath a universal ‘poverty line’.  The World Bank in its 1990 World Development Report assigned as impoverished those whose incomes fell below $275 or $375, in constant 1985 Purchasing Power Parity prices, depending upon the country in which they resided.[13] The numbers are derived by calculating the cost to procure minimal caloric requirements for survival.

Though such a poverty line may be useful for cross-country comparison, it suffers from the serious defect of  accepting a notion of minimum subsistence which is purely arbitrary and therefore imprecise.  A man who lived his entire life in the Amazon jungle would tolerate conditions under which few in an industrialized country would survive.  Likewise, the notion of caloric requirements also varies from one person to the next so that a quantity necessary for survival is not useful as an economic indicator of poverty. 

The World Bank concedes as much in its report when it acknowledges that ‘as countries become wealthier, their perception of the acceptable minimum level of consumption – the poverty line – changes.’[14]  The poverty line therefore supplies no more than an unscientific tool with which to render a comparison between the aggregate condition of inhabitants of one place to those of another, without regard to the amount of satisfaction that condition yields to each.

5. Capital Accumulation

Though population growth, income inequality, and subsistence wage levels are not often the cause of poverty, they may nevertheless be symptoms of it.  That is not meant to confuse correlation with causation, for prosperity can coexist with any of these conditions.  That notwithstanding, the most reliable antidote for poverty has historically been increase in per capita capital accumulation.  Without such accumulation, the conditions previously described may indeed be revealed as a manifestation of poverty.

Whether it be Robinson Crusoe forgoing a certain quantity of present berries so he may construct a stick and acquire a more bountiful harvest in the future, or a modern company or individual investing saved funds in a venture which it or he hopes will reap future rewards, the principle is the same.  People voluntarily[15] exchange present for future consumption, thereby increasing the production structure and the consequent quantity of goods available to all. Examples of this process abound, particularly in the 19^th century Industrial Revolution.  A country which has prospered by its adherence to, and suffered by its neglect of , this free market process is Argentina.

Poverty and Development in the Argentine Republic

1. Before 1930

While Argentina is today considered an ‘emerging’ or ‘developing’ country,  at the turn of the century it would have been more accurately classified as ‘advanced’.  Argentine growth was most pronounced in the fifty years preceding the first world war, propelled by the rapid expansion of the capital stock and concomitant increase in exports.  Indeed, as one writer has it, ‘growth can be said to have been “export-led”, not because exports and their associated capital inflows provided growing aggregate demand (in a Keynesian fashion), but because, more fundamentally, exports and capital inflows led to an allocation of resources far more efficient than the one which would have resulted from autarkic policies.’[16]  This capital accumulation reduced the level of concern over mass poverty to a level comparable to that in the United States of the same period.  Indeed, as mentioned previously, Argentina was among the world’s largest exporters of beef. Table 1 below presents selected indicators of economic growth prior to 1930, while Table 2 presents the growth of the capital stock during the period 1900-29.

Table 1

Indicators of Economic Growth in Argentina Prior to 1930[17]

*Annual Averages

Table 2

Growth of Capital Stock in Argentina, 1900-29 (annual averages in percentages)[18]

The correspondence between economic growth indicators and the increase in quantity of capital goods is reflected in the dramatic decreases evident in the both during the latter half of the 1900-29 period.  The effect capital accumulation (and its subsequent diminishment) on the labor force is shown in Table 3.

Table 3

Growth of Labor Supply in Argentina, 1900-29 (annual averages in percentages)[19]

The export-led growth precipitated by capital accumulation provided the foundation for an expansion of industrial activity by producing a collection of skilled workers that could be, and were, hired by industrial entrepreneurs.  Moreover, as foreign investors expanded the capital stock in competition with one another, the profit, or interest, rate continued to diminish to the benefit of the Argentinean wage earner. As of 1930 ‘the supply of capital generated in Argentina was sufficient to have brought down interest rates to levels prevailing in the capital markets in Europe and the United States.  It was possible for public authorities to finance themselves as cheaply in Argentina as abroad.’[20] Until 1930, poverty was seldom of concern in Argentina.

2. 1930-1969

The first mistake made by the Argentine government in response to the market crashes of 1929 was the same as that made by every other government during that period: a repeal of the gold exchange standard in favor of a fiat currency rather than a pure 100% gold standard.  Though ostensibly an attempt to ensure a steady increase in farm prices, this tactic was in reality a consolidation of monetary power in the hands of the central government, despite which farm prices decreased:

Figure 1 (1939 = 100)[21]

Farm Price Indices

1928 – 130         1931 – 76

1929 – 123         1932 – 71

1930 – 103         1933 – 68

1934 – 85

Industrial growth also suffered during the 1930s as consumer time preferences increased, and most capital was directed toward consumer goods; consumption increased 28% during the 1930s.  Consequently, in 1940 Argentina possessed a standard of living comparable to that in the United States, Britain, and Switzerland.[22]

Though the conflagration of protectionist policies of the 1930s hindered the Argentinean export economy, production proceeded at an admirable pace during the decade.[23]  As war erupted in Europe, Argentina became more reliant upon the United States as a recipient of its exports in exchange for capital equipment.  The entry of the states into the war and Argentina’s declaration of neutrality effectively ended whatever potential may have existed for cordial relations.  Trade contracted throughout the war, rendering Argentina without the capital necessary to maintain, much less improve, its impressive record of progress.  The decline of imports is documented below (1935 = 100):

Figure 2[24]

Import Indices

1939 – 99           1942 – 54

1940 – 84           1943 – 35

1941 – 65           1944 – 35

1945 -36

Though the decline in capital imports ravaged Argentina and its poor during the war, the potential for resumed growth was omnipresent: large deposits of land, labor, capital, and, effected by the trade surplus of the war, an enviable reserve of gold.  What was also growing, however, was the state.  As Ferns notes, ‘Up to that point… the process of mixing and administering [capital and labor] had been left largely…to private businessmen responding to the forces of the markets both domestic and international.’[25] 

The 1946 election to the presidency of Juan Peron radically reversed the pre-existing state of affairs.  While proclaiming himself the saviour  of the common laborer, Peron was in fact their greatest antagonist. The realm of nationalised industries was almost without bounds: a central bank, the gas industry, all utilities, insurance, pensions, housing, and the military. The inflationary credit expansion and consequent surrender of capital required for such an overhaul produced a temporary and artificial stimulus to consumption and wages in the late 1940s.  Unfortunately, a nationalised economy does not possess the external price mechanism required to efficiently allocate resources in accordance with consumers’ desires and time preferences. 

Though the time preferences of the Argentine poor were relatively high in the aftermath of war-induced  import reductions, the inflationary credit of 1946-9 flowed to higher-order capital intensive industries which employed the union labor which comprised the foundation of Peron’s support.  Employment in these industries therefore increased, though those employed continued to purchase lower-order consumer goods in deference to their high time preferences. 

By 1950 higher consumer prices had consequently emerged as the most notable symptom of the inflation, while the malinvestment of capital and the maintenance of union employment camouflaged a stagnant economy. Meanwhile, the new ‘money’ produced by the central bank credit expansion (Table 4) filtered down to the impoverished and the elderly only after the rise in consumer goods prices had been accomplished.[26]  (Appendix A)

The very poor for whom Peron claimed to speak were therefore the ones most damaged by his excursion into state economic planning. As one writer has it, ‘Detailed government controls over the allocation of credit, plus inflation, gave rise to a distribution of loanable funds that bore few links to either the entrepreneurial capabilities of borrowers or the social profitability of projects.’[27]  

Table 4[28]

Billions of Pesos in Argentina at End of Each Year

Despite savings rates of near 20%, the post-war collectivist policies of the Argentine state strangled the domestic allocation of resources and the importation of capital from abroad to the detriment of an impoverished class which by 1929 appeared  negligible.  The subsidization of heavy industry induced many of the impoverished from the rural farms on which they had been raised to the illusion of high-wage prosperity in the industrial urban areas.  The consequent urban migration and lack of capital improvement produced precipitous decline in rural output (see Appendix B). 

Furthermore, as the quest for employment in the city was often thwarted by artificially inflated union wages, the decline in rural output was calamitous for the new urban poor who found themselves without sustenance.  To further depress the situation, government support of heavy industry bid up the prices of capital intensive higher order goods while farm prices fell relative to them (Appendix A).  The result was a reduced standard of living not only for the urban migrants, but also for the poor who remained on the farm.

The nationalist drive to enhance the industrial sector was not unique to Argentina during the decades after the war, when nations the world-over discarded sound economic theory for hubris and aggrandizement.  Those favored by the state benefited in the only way they could under state control: at the expense of those not receiving direct subsidies or the initial issuance of  new credit or currency.  The latter tended almost always to be the rural poor or those of their number who attempted to obtain urban employment. 

Regarding the choice between industrial or agricultural development, it is best left to the dictates of the market and beyond the reach of the coercive state.  An unhampered domestic market and a liberalised trading environment will produce an allocation of resources between the urban and rural sectors which best serves the entirety of the population.  Such was the environment in which the United States during their first 80 years of independence transformed themselves from small producers of products that were almost exclusively agricultural in nature, to relatively prosperous producers of both agricultural and industrial products.[29]

Argentina during the 1950s and 60s emphasised manufacturing to such an extent that its once mighty agricultural sector stagnated  (Appendix C)[30]. From 1948-72 the value in constant dollars of agricultural production increased only 48% while that of manufacturing increased 250%.[31] In 1957, real income to beef production in what was once the world’s largest beef exporter declined 24% (Appendix C), while a simultaneous 2% decline in real industrial wages was underway.  What is fascinating about the rates of income growth in Appendix C is not so much the frequency of the negative rates, but the remarkable variations.

Even beef income growth, despite being negative for most of the period, was extraordinary in 1959 and 1964. Unfortunately, this was effected more by a government restriction of supply than by any improvement in production techniques.  Production in 1959 and 1964 declined 22% and 23%, respectively, thereby yielding impressive returns for those who did produce.  The vast majority, however, produced nothing and therefore received no income at all.[32] The miniscule recovery of 1953 was ‘accompanied by an increasingly demoralised private sector, a bloated and centralised public one, and, in mid-1955, a … foreign exchange crisis, which [the U.N. predicted] would end in national bankruptcy.’[33]

3. 1960-1996

Until the 1950s, Argentina was supposed to have been passing amicably through the Rostovian ‘stages of growth’, from the traditional society of the mid-19^th century, to the precondition stage of the latter 19^th and early 20^th century, and through the ‘take-off’ stage of 1930-52.[34] Unfortunately, for 30 years after Walt Rostow formulated his stages of growth theory in 1960, Argentina did not ‘take-off’ to a ‘drive to maturity’, as his theory would suggest, but rather descended into sustained economic contraction.[35] 

The Rostow theory of growth fails not just empirically, but also theoretically.  In an attempt to refute Marx, Rostow nevertheless conducts a futile Marxian quest for laws of history which pre-ordain an automatic evolution from one stage to the next.  The idea of such a law is, as Mises put it, ‘self-contradictory’, for the occurrence of one event cannot presuppose that of a subsequent one.  As Mises wrote, ‘Those features which an event has in common with other events are not historical’[36], regardless the tendencies they may share respecting the circumstances under which they occur.  Simply because the stock market advances during years in which the National League team wins the World Series implies not a ‘law of history’, but coincidence.  No law prescribes the outcome, just as no law mandates a drive to maturity after take-off.

Rostow further assumes an automatic rate of growth, while postulating that technology, rather than private savings, is ultimately responsible for it. Instead, he proposes government support of something he calls ‘social overhead capital’ to inaugurate the take-off phase.  Finally, the ultimate stage of ‘mass consumption’ to which Rostow refers is not necessarily ‘ultimate’, but may be initial, as in England during the ‘take-off’ years of the Industrial Revolution when the masses of England rapidly consumed the new inexpensive manufactured textile goods.[37]  The empirical evidence of Argentina clearly disproves the inevitability of the Rostovian stages.

By 1973, grain yields in North America were increasing 140%, in Australia by 89%, while in Argentina they were increasing at a paltry 25%. Trade restrictions limited acquisition of fertilizers and capital equipment necessary in a country reliant upon agriculture for 85% of its exports.  Moreover, land tenure policies resulted by 1965 in 5.6% of farms owning 75% of all productive land.  Past failure of the government to abide by its promises to farmers left the latter skeptical of any new guarantees the former would offer. Further aggravating the rural sector was the fact that by 1969 it accounted for only 13% of GDP, an amount hardly conducive to governmental empathy. [38]

Despite impressive gains to those involved in urban labor guilds, those inhabiting the big cities fared little better during the 1970s and 80s  than did their compatriots in the country.  The Peronist restoration of the early 70s, followed by the ensuing ‘dirty war’ later that decade, precipitated a military regime in the early 1980s which had little regard for economic or political liberty.  The effect was a poverty rate in excess of  35% by 1983, a rate which was exacerbated by exorbitant inflation with its consequent price increases and economic distortions.  

The rate of inflation did not drop below 36% till 1994, during which it was 7%.  Consequently, that same year finally saw prices increase by ‘only’ 5%, the first increase in four decades of less than 12%.  Not coincidentally, the early 1990s constituted a period of reforms sympathetic to a free market as taxes, import, and foreign exchange restrictions were reduced. After declining 6.2% in 1989, GDP from 1991-94 grew at rates in excess of 6% each year, and in excess of  8% twice.[39] 

The peso was pegged to the dollar, a condition it withstood despite the ‘tequila effect’ of the Mexican currency crash in 1994-5.  Poverty, meanwhile, while still regrettably high, has been reduced to 25% of the total population as capital investment pours in from the United States, Europe, and Japan.  While not over, the romance between state and heavy industry by 1995 was on the rocks. Argentina and other Latin American countries by that year seem to have begun absorbing the lesson that the road from poverty is not necessarily paved by a state subsidized manufacturing sector. 

The economic resurgence has occurred simultaneously with a drop in manufacturing as a percent of GDP.  By responding to market forces with production in which they have a comparative advantage, the Argentine people have benefited themselves and the poor among them.  The Economist in 1997 refuted the idea that Argentina might get trapped in agriculture to the detriment of its economy: ‘If a country does what it does best and sees its incomes grow as a result, it can afford better education and  infrastructure.  These, in turn, will give it an advantage in other products in the future.’ [40]  What those other products will be is a decision not for government officials or even for economists, but rather for entrepreneurs and businessmen whose resources, expertise, and time preference render them best equipped for the task.

[1] ‘Famine’, Encyclopedia Britannica, 1965

[2] Even the Irish famine may be attributed  to protectionist trading and land systems, plus English corn laws which resulted in exportation of abundant wheat supplies as the potato crops failed.  See John P. Finneran, ‘Free Trade and the Irish Famine’ in Burton W. Folsom, ed., The Industrial Revolution and Free Trade (Irvington-on-Hudson: Foundation for Economic Education, 1996), pp.154-58.

[3] Henry Hazlitt, The Conquest of Poverty (Irvington-on-Hudson: The Foundation for Economic Education, 1994), p.19.

[4] Thomas Malthus, An Essay on the Principle of Population (New York: Penguin Books, 1970), pp. 75-6.

[5] The World Almanac and Book of Facts, 1996, pp. 737-816.

[6] Ludwig von Mises, Human Action: A Treatise on Economics, 4^th Edition (Irvington-on-Hudson: Foundation for Economic Education, 1996) p. 836.

[7] William J. Baumol and Alan S. Blinder, Economics: Principles and Policy, 4^th Edition (New York: Harcourt Brace Jovanovich, 1988), pp. 828-35.

[8] World Almanac, pp. 821-31.

[9] Paul A. Samuelson and William D. Nordhaus, Economics, 13^th Edition (New York: McGraw-Hill, 1989), p. 647.

[10] Mises, Human Action, p. 840.

[11] John Maynard Keynes, The Economic Consequences of the Peace (New York: Harper & Row, 1920), p. 19.

[12] Mises, Human Action, p. 609.

[13] The World Bank, World Development Report 1990: Poverty, p. 27.

[14] ibid.

[15] A government mandated savings program, whether by increased taxation or some other means, will not produce the beneficent effect described.  Nothing is inherently noble about high saving rates; rather they are only an effect of low time preferences on the part of the savers. By disrupting voluntary savings patterns the state distorts market signals and induces investment in processes that are neither warranted nor desired.

[16] Carlos F. Diaz Alejandro, Essays on the Economic History of the Argentine Republic (New Haven and London: Yale University Press, 1970), p. 11.

[17] Diaz, Economic History of Argentina, p. 2

[18]Diaz, Economic History of Argentine., p. 7

[19] ibid, p. 8.

[20] H.S. Ferns, The Argentine Republic 1516-1971 (New York: Barnes & Noble, 1973) p. 105.

[21] Ferns, p. 116.

[22] Ibid., p. 130-2.

[23] ibid., p. 139.

[24] ibid., p. 145.

[25] ibid., p. 147.

[26] For an analysis of credit expansion as the cause of business cycles and recession, see Ludwid von Mises, The Theory of Money and Credit (Indianapolis: Liberty Classics, 1980), p. 403-4. ; Murray N. Rothbard, America’s Great Depression (New York: Richardson and Snyder, 1963), pp. 11-38.; Mark Skousen, The Structure of Production (New York: NYU Press, 1990) pp. 282-326.; Richard M. Eberling, ed., The Austrian Theory of the Trade Cycle (Auburn: Ludwig von Mises Institute, 1996)

[27] Diaz Alejandro, p. 128.

[28] Ferns, p. 158.

[29] An interesting note respecting the United States immediately preceding the War for Southern Independence is the fact that the wealthiest were the agricultural states of Louisiana and South Carolina; see James Donald Kennedy and Walter Donald Kennedy, The South Was Right! (Gretna, LA: Pelican, 1995), p. 145.

[30] Richard D. Mallon, Economic Policymaking in a Conflicted Society: The Argentine Case (Cambridge: Harvard Press, 1975), pp. 36-91, p. 201.

[31] Gary W. Wynia, Argentina in the Postwar Era (Albuquerque: University of New Mexico, 1978), p. 205.

[32] ibid., p. 105, 122.

[33] ibid., p. 143, 153.

[34] ibid., p. 51. Also Michael Todaro, Economic Development, Sixth Edition (Menlo Park: Addison-Wesley, 1996), p. 131.

[35] Todaro, p. 131.

[36] Ludwig von Mises, Theory and History: An Interpretation of Social and Economic Evolution (Auburn: The Ludwig von Mises Institute, 1985), p. 212.

[37] Murray N. Rothbard, Man, Economy, and State: A Treatise on Economic Principles (Auburn: Ludwig von Mises Institute, 1993), p. 839.

[38] Wynia, Argentina in the Postwar Era, p. 206-9.

[39] Economic Commission for Latin America and the Caribbean, Economic Survey of Latin America and the Caribbean 1994-1995 (Santiago: United Nations, 1995), pp. 134-5.

[40] ‘Stranded on the Farm?’, The Economist, October 4, 1997, p. 84.