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Why Canada succeeded & Argentina failed?

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  Quote flyingzone Quote  Post ReplyReply Direct Link To This Post Topic: Why Canada succeeded & Argentina failed?
    Posted: 22-Jun-2006 at 23:33
Argentina began the 20th century as one of the worlds 10 richest countries. In fact it was the fifth richest following by close distance the leaders in the 1940s, the United States, Canada, Britain, and Germany. At that time people in Argentina were slightly richer than the Australians, and more than 3 times richer than the Japanese. However, today, Argentina is a Third World country with two-thirds of its population living in poverty.
 
Initially, there were a lot of similarities between the Canadian and Argentine economies. Both countries had enormous areas of virgin grasslands (the prairies and the pampas - the title of a book written by Carl E. Solberg on which some of my subsequent arguments will be based). Both had vast natural resources. The volumes of their exports (mainly to European markets) were similar. In both cases, the indigenous people and their decendants were either destroyed, absorbed, or replaced by European immigrants. However, after 1930, while Canada retained its export markets and moved on to industrialization and eventually became one of the world's richest and most democratic countries, Argentina sank into economic decay and political chaos.
 
How does one account for Canada's success and Argentina's spectacular failure? Before I start bringing up ideas mentioned in Solberg's extremely influential book, I would like to hear from you guys.
 
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  Quote pikeshot1600 Quote  Post ReplyReply Direct Link To This Post Posted: 23-Jun-2006 at 08:56

First, start with Canada's representative political tradition unimpeded by interference from the army.

Second, Canada as a society had no daliance with fascits, or with Nazi ideals.

Third, Canada was an active participant in the Second World War, and a geographic partner of the winners.  Her resouces and industries were the beneficiaries of participation and of partnering.  Argentina was not only remote from the war, she reaped mostly the effects of the war's economic dislocation rather than any benefits.  The cereals and livestock of the Pampas had a more difficult, expensive and dangerous route to northern markets while Canada was attached to them.
 
 
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  Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 23-Jun-2006 at 13:54
Pikeshott's points are reasonable, but Argentina's decline started before WW2 and Peron, didn't it?
 
I don't have any data on the timing of the economic decline of Argentina. Did the fact that it was heavily dependent on British investment pre-1914, investment that dried up after (and because of) the war, have anything to do with it?
 
Or the between-wars British emphasis on imperial preference, pushed so hard by Beaverbrook, who was, perhaps not coincidentally, Canadian?
 
Just suggestions, I don't really have any view.
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  Quote Guests Quote  Post ReplyReply Direct Link To This Post Posted: 23-Jun-2006 at 14:06

Argentina, along with most of Latin American, flirted with marxism after World War II.  The military juntas attempted to order around the economy like an army, resulting in economic stagnation and enormous poverty.  Argentina made a little bit of progress during the 1980's after the junta was removed following the Falklands debacle.  Some mild market reforms were implemented and the economy soared.  Unfortunately for Argentina, the government artificially pegged the Peso, taxed like hell and spent like lunatics.  The economy crashed to pieces in 2001 and the resulting socialist victory has condemned that sorry nation to further stagnation.

Canada, while no libertarian paradise, has more or less stuck to its capitalist roots.
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  Quote Zagros Quote  Post ReplyReply Direct Link To This Post Posted: 23-Jun-2006 at 16:53
Simple, Canada has a huge market for its produce just a click to the south and it has had a stable government.
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  Quote Constantine XI Quote  Post ReplyReply Direct Link To This Post Posted: 25-Jun-2006 at 23:41

I would also add that perhaps the presence of certain valuable resources has benefitted Canada, such as uranium, while I don't know of any special resources which are also held by Argentina of comparable value.

The political situation does have alot to do with things because in many new world nations the key to economic prosperity has often been to enjoy secure long term investment. As an English speaking (remember, the US and UK have been massive investors in the 20th century) country with a stable government, Canada had this. Argentina was not so politically stable and even managed to lose herself a war against Britain, a turn off for investors.


Edited by Constantine XI - 25-Jun-2006 at 23:41
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  Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 26-Jun-2006 at 04:41
The turning point in Argentine development seems to have been 1929 and the crash.
 
Up till then Argentine gowth had depended almost exclusively on British investment in the country: after 1929 that source dried up, because of the depression followed by the war, and Britain's relative impoverishment after it.
 
There's something of a chicken-and-egg situation about economic stagnation/deflation and political instability/dictatorship. Each leads to the other, but I suspect here the political developments followed from the economic ones in the first place.
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  Quote flyingzone Quote  Post ReplyReply Direct Link To This Post Posted: 26-Jun-2006 at 19:14

gcle is definitely right in pointing out the fact that Argentina's decline started before the Second World War.

Carl Solberg, in his monumental book "The Praire and the Pampas: Agrarian Policy in Canada and Argentina, 1880 - 1930", used the differences in the agrarian policy in the two countries as a plausible explanation for the divergent path of development. Specifically, he emphasized the role of the state and its interaction with class interests.

For example, in Canada, under John Macdonald's Conservative party (that represented in Ottawa the merchants and nascent industrialists), policies that favoured the interests of these groups were enacted. One of the most remarkable policies was the insistence that immigrants had to be settled on their own land (in a Canadian version of the Homestead Act of the United States). As a result of that, they were able to produce staples for export and become consumers of Canadian industry. Also, in order to obtain a homestead grant, immigrants to Canada accepted citizenship and organized themselves into rural cooperatives. The result of that was of course the emergence of a mass democratic electorate powerful enough to exert pressure on Ottawa. Hence both political and economic reforms.
 
In Argentina, on the other hand, the most influential political players were the landed elites, specifically those cattle barons whose origin can be traced to the late eighteenth century. In order to secure a market for exports and obtain credit and luxury import, they entered into alliance with Great Britain. Workers from Spain and Italy, attracted by employment opportunities in Argentina, would work there in the off-season and returned home with their wages. Assimilation of immigrants (i.e. those who did stay) into Argentine politics was therefore a lot slower than their counterparts in Canada. Moreover, instead of exerting their (limited) power by votes, the Argentine tenant farmers would use violence and strikes, leading to repression by the elite. Hence the stunted political development.     
 
Of course Solberg's view is not without its critics. I am just presenting one particular point of view based on political economy.
 
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  Quote edgewaters Quote  Post ReplyReply Direct Link To This Post Posted: 28-Jun-2006 at 17:27
Canada crashed in 1929 too, but on the other hand, it saw economic benefits and the buildup of heavy industry from the war, while Argentina did not. Also one must keep in mind that in the interwar years Canada was a key member of the world's largest trading bloc (the Commonwealth) and in the postwar years, Canada and the US formed the world's (probably history's) largest bilateral trading partnership.
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  Quote Mila Quote  Post ReplyReply Direct Link To This Post Posted: 28-Jun-2006 at 17:50
I always thought Argentina was somewhat of an oddity. Moreso than any other South American city, Buenos Aires reminds me of a European capital. Stereotypes of prosperity, of course, come with that.

I discovered quite some time ago that Argentina was once a very wealthy country but I assumed it has simply remained at the level of wealth it had attained back then - a lack of progress, but no degression.

I think these sorts of things are dictated by a variety of factors - interest rates, currency value, trade surplus and deficit, and so on. If I had to choose a likely reason, the ones you've discussed here seem as good as any to me.

I also think there's a cultural element at play. Countries that are similar tend to work together so it's no surprise to me that the successes in Canada, the United States, the United Kingdom, and Australia served to further bolster each other. Argentina, on the other hand, was culturally linked with a less successful region and even formed unofficial links with even less successful countries overseas (Nazi Germany, for example).
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  Quote flyingzone Quote  Post ReplyReply Direct Link To This Post Posted: 28-Jun-2006 at 19:11
Just to bring up an entirely different perspective to this question. A guy called Bernard Cloutier brought up the issue of Argentina's national culture (which he called the "Argentine character") as an explanation for the country's economic problems. According to Cloutier, the "Argentine character" is an extension of the Spanish absolutist heritage and it consists of excessive individualism, egocentrism, and lack of civic discipline. This is what he has to say about the "Argentine character":
 

'Long term, I cannot see how Argentina can find a durable solution to its financial problems without a serious reduction of the excessive individualism of its citizens, and the development of a sense of collective responsibility that I think are required to win the struggle against the corruption that I feel is the principal cause of the country's problems.

Nations dont change their national characteristics easily. The northern Europeans persist being reserved and those of the south remain expansive.  North Americans are still chauvinistic and manicheist, the Chinese remain industrious, the Japanese, workaholics, and so on...  It is not very likely that the egocentric Argentines will suddenly discover the collective values, civic discipline and sense of nationhood that would be required for their country to rid itself of the corruption and extreme social inequality that prevent its development. It will not be easy for the Argentine people to escape the Spanish absolutist heritage that legitimate power comes from the top of the pyramid and not from its base. As seen from the outside, the country seems to be fated to remain as unstable and vulnerable to periodic military dictatorships as it has been since its independence from Spain.

The Argentine Character

In two months I met a lot of people in 16 towns and cities but I met none of the powerful oligarchy that control the country. The ordinary citizens I met from upper middle class to poor reminded me of frightened adolescents in a strict boarding school trying to look brave but secretly terrorised by the headmaster. I have come to see them as victims of the greed of the elite to whom they look for leadership. A succession of cruel dictatorships has undoubtedly left its trace on the national character. Argentine egocentrism, seen as the manifestation of a survival instinct, draws understanding and sympathy.

Now that argentine egocentrism has been examined it is only fair to mention two other widely recognised components of their unique personality; their considerable self esteem and their marked tendency to be hospitable to strangers.

Argentines like to joke about their inflated ego. I have heard dozens of these jokes but I'll share only one with you What is the most common mode of suicide in Argentina? To jump into into the void from the top of ones ego!  Unfortunately the South American neighbours who are the object of  Argentine disdain do not appreciate this trait at all and qualify Argentines of being haughty, aloof, superb and a number other less printable expressions.

After all these critical comments on their character,  I am pleased to emphatically mention the remarkable cordiality and hospitality with which Argentines spontaneously greet strangers.  This tradition of hospitality is said to come from the early  gauchos that roamed the pampas living off wild cattle before the land was partitioned to landowners. Somehow it was transmitted through the ages and maintained even in city life. I have visited many people in many places but few have greeted me as warmly.

Finally, sharing with you the analysis of the Argentine Character emailed to me by argentinean reader of this page might help understand the contradictions that hamper the development of this country. Let me add however that people are more loveable through their defects than through perfection and that Argentina is definitely a country I will be happy to visit again.'

What do you think? Do you think the national culture of a country could be determinant of its economic and even democratic development? Is that too culturally-deterministic?
 
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  Quote flyingzone Quote  Post ReplyReply Direct Link To This Post Posted: 28-Jun-2006 at 19:25
Oh, I forgot to mention that my good friend Juan, an Argentine (of Basque origin actually) immigrant to Canada told me that, even when Argentina's economy hit rock bottom, when the country's inflation rate hit 1000%, and when people were basically either bartering or pawning their possessions for survival, there were still many Argentines, never having travelled outside their country, who believed that Argentina was the best country in the world to live. Maybe there's indeed some truth to this "Argentine character" thing that this Cloutier guy talked about.  
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  Quote snowybeagle Quote  Post ReplyReply Direct Link To This Post Posted: 28-Jun-2006 at 21:38
Canada also got immediate access to the Pacific - direct routes to markets into the Far East.
 
There isn't a lot Argentinians can sell to Australia, New Zealand and South Pacific.
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  Quote thedude Quote  Post ReplyReply Direct Link To This Post Posted: 28-Jun-2006 at 22:50

Canada were lucky to have strong bonds with Great Britain and the USA. Both were superpowers and Canada were allowed to grow with their help. The States invested alot in Canada and Canada became very close with the States.

Also Canada gained alot of respect when entering the Second World War because unlike the First, they had to choice to go and they showed great loyality. After World War 2, Canada were now considered a power.
 
At the beginning of the 21st century, Argentina faced considerable economic difficultiesIn the 1990s the government changed the primarily state-controlled economy to one that was mostly privately controlled.



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  Quote Killabee Quote  Post ReplyReply Direct Link To This Post Posted: 01-Aug-2006 at 19:22
I have to admit that countries with anglo-saxon heritage are the most democratic, efficient and incorrupted in the world. Argentina, like the rest of Latin American, is laden with dictartorship, corruption scandal, bureaucracy, which culminated in economic downfall.
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  Quote Guests Quote  Post ReplyReply Direct Link To This Post Posted: 13-Oct-2006 at 11:25
Originally posted by Killabee

I have to admit that countries with anglo-saxon heritage are the most democratic, efficient and incorrupted in the world. Argentina, like the rest of Latin American, is laden with dictartorship, corruption scandal, bureaucracy, which culminated in economic downfall.
 
That's just a myth. I can mention thousands of scandals and corruption cases in the U.S., Britain or Japan as well. 
 
First, people should realize what is the mood of Argentineans. They are our neighbours (I am Chilean and I know them well) and I tell you: They love to cry! They are a people that love to complain how badly life has treated them. They call it Tango LOL
 
In comparison, an anglo-saxon can be very poor, exploited at work, or abussed in any manner and he will always be very proud of its country and its job. That's a matter of psycology.
 
The realities of Argentina are quite different. Argentina IS NOT a poor country. Comparing it with Ghana or Vietnam is making a big mistake.
Argentina is a country with lots of resources and a large and educated middle class, and the HIGEST income per capita in Latin America, which is still superior than many countries of Europe and MOST countries of Eastern Europe.
 
Argentina is a country thas has lots of achievements, including several Nobel prizes in science, lots of excelents artist and sportmen. Yes, Argentineans build cars for racing, design planes, and success in the most important universities worldwide.
 
Argentina is a dissorganized, chaotic, Italian-like country, but still is a place to be taken into account. Perhaps the more intelligent people of Latin America live in there, together with some of the dumbest politicians on the planet LOL
 
In comparisson, my country Chile was very poor, and has tried during all the 20th century up today to catch up with Argentina. We are a model of success and development.... and we still lag behind Argentina Wink
 
So, please, take a second look on that beautiful country. After all, Argentina is less boring than Canada. No doubt about it.
 
Pinguin
 
 
 
 
 
 
 
 
 
 
 
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  Quote Hellios Quote  Post ReplyReply Direct Link To This Post Posted: 14-Oct-2006 at 01:51
SubjectTopic: Why Canada succeeded & Argentina failed?
 
Good topic flyingzone.

 

The main reasons have already been mentioned in the replies above.

 

There's also an obscure theory that climate might've been a small factor.  LOL

 

Personally, I don't agree with the theory.

 

The theory is that an extremely cold environment compels people to work harder.  Supposedly it started with the colonists having to work harder to survive the long winters & ends with modern Canadians having to work harder to pay some additional expenses due to winter, o something like that.

 

Again, I don't agree with the theory, but maybe it's possible that the Canadian climate gives a small boost to the economy due to the additional infrastructure & industries required in order to deal with it.



Edited by Hellios - 14-Oct-2006 at 22:37
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  Quote Guests Quote  Post ReplyReply Direct Link To This Post Posted: 14-Oct-2006 at 08:20
Originally posted by Hellios

....

 

Again, I don't agree with the theory, but maybe it's possible that the Canadian climate gives a small boost to the economy due to the additional infrastructure & industries required in order to deal with it.

 
When you consider that Canada is right beside the United States, and in many places the frontier is a imaginary land, it is not difficult to figure it out the prosperity of that nation.
 
Canada work in many things with the U.S., from manufacturing to natural resources explotation, and from basic research to military development. They share distribution chains and they even belong to the same beisball leages.
 
The weather has nothing to do with it.
 
As for the people, Argentineans are not much different physically from Canadians at all.
 
 
Pinguin
 
 


Edited by pinguin - 14-Oct-2006 at 08:21
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  Quote Guests Quote  Post ReplyReply Direct Link To This Post Posted: 14-Oct-2006 at 08:26
By the way, do you really believe Argentina is such a disaster?
I believe it is pretty good shape. Look at Argentina's soccer team
 
Pinguin
 
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  Quote Guests Quote  Post ReplyReply Direct Link To This Post Posted: 14-Oct-2006 at 08:49
Now, seriously, things that Argentina produces:
 
Manufactured goods:
 
Toys
 
Cars
 
 
Planes
 
Cell phones (Motorola-Brighstar Land of Fire)
 
 
And tons of products from all the manufacturing range.
 
So, yes, Argentina is not in the shape of Canada, but things aren't like in real poor countries either. There was a economical crisis and things are improving now.
 
Pinguin
 
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