Free Markets, Not Protectionism Once Made Argentina the Top Global Economy

Contrary to the dogma we learn in schools and universities, Argentina's economic growth was a result of an ambitious and complex model

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Argentina’s agricultural sector developed remarkably well. But was there a model that benefited it at the cost of deferring industrial development? (Twitter)

SpanishThe idea that the engine of development, also known as the “deindustrializing” model, was based on a protectionist “agro-exporter” program is a dogma. No matter the ideological orientation of the study text (which almost always leans to the same side), the idea that the Argentine government promoted a scheme that led to the development of the agricultural sector is indisputable. Teachers repeat this idea often, and students know it by heart by the time they leave schools and universities.

Agustin Etchebarne, a liberal economist and director of the Liberty and Progress Foundation, set out to debunk a myth that has already become gospel truth among Argentines. The data support him, but starting this particular debate is undoubtedly a challenge.

In a new video of his foundation, which already reached 25,000 views within hours of publication, Etchebarne elaborates in detail how the model of the Constitution of Juan Bautista Alberdi was a general opening scheme and not privileges or endorsements for a particular sector. “The project was based on respect for life, liberty, and private property. With that framework, our country became one of the most advanced countries with a diversified productive structure,” says the economist in the audiovisual production.

According to Etchebarne, the myth of the agro-export model is probably repeated in an attempt to devalue the liberal model and associate it with a particular sector: “the cattle oligarchy.” In this way, the insistence of the story has convinced the collective imagination that the model of openness and economic freedom, supposedly a generator of vast inequalities, would lead to the exclusive development of the countryside, given the characteristics of Argentina.

However, contrary to one of the most entrenched beliefs in the country, Etchebarne confirms that the model of the 1853 Constitution was none other than the “industrialist of the Adam Smith School. In this fashion, Argentina managed to position itself as the number one country in the world in 1895 in terms of per capita income and remained in the top ten of the world for half a century. In one of the most interesting segments of the video, the director of Liberty and Progress recalls that despite the model of economic liberalization, by 1914, 71% of all products consumed locally were Argentine industry. By 1922, the local industry had surpassed the production of the agricultural sector.

“In 1932, Argentina’s industrial output was larger than that of Mexico and Brazil combined. By 1943, the industrial sector was already exporting 20% of its production.” There is no doubt that the data kills the narrative.

Logically, then we analyze the end of the model of the role of protectionism, which did nothing but ends up harming the sector that it had theoretically benefited. Although the idea of the Argentine agro-export model is rooted in every sector, history shows something very different. It is time to foster an essential debate to discuss the future of the country.

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