W.P. Glade

 A Summary

In A Nutshell

Whilst this article is dense with information, it is useful to show that institutions are not the only thing worth accounting for when thinking about growth in LA. The structure of dependence upon core countries is also really important as well as technological changes.

  • Post colonial mix of capitalist and non-capitalist relations of production.
  • Began to integrate into world economy exporting wool, minerals and coffee but ease of borrowing in this time meant there were no home grown technological developments
  • Post independence left a politically unstable region – coups uprisings etc. and this led to inefficiency, indiscipline and corruption.
  • Last 25 years of 19th century stability began to be exhibited. Government authority increased especially in Brazil, Chile, Arg and mexico – and this meant policy could be directed toward securing material prosperity.
  • This stability lead to a more reliable and thus hospitable investment environment for foreign investors and for local private investment/capital accumulation.
  • Foreign investors were investing not just in businesses but in the government bonds so substantial infrastructure improvement could also take place. The money was better used as stability means less wastage and pilfering associated with constant regime change.
  • During the 19th century growth in world trade in primary products outstripped that of manufactured goods and this was so until the 1st quarter of the 20th century. Thus the growth seen in Latin America during this time of “high capitalism” was driven by industrialization in the economic centre.
  • The reliance on this demand driven by the economies of the North lead to unsteady growth due to shocks or political instability in those countries. Nevertheless during this period expansion was “export led” and therefore induced by the pull of demand in industrial countries.

Export Markets

  • The integration into the world economy changed the pattern and geography of production in LA
  • e.g. Argentina – Wool, hides, meat (with advent of frozen shipping capabilities) and most significantly (and recently to 1870) wheat and maize. The pampa and areas to the west of BA had been converted for farming cereals, and wool production shifted form the pampa to Patagonia.
  • e.g. Chile – Wheat, Copper and nitrates (more acquired after war of the pacific – a radical example of the changing geography of the region! [ Chile acquired mineral deposits in land from Peru and Bolivia])
  • e.g. Mexico was favoured with good geography i.e. close to shipping routes to Europe but also the northern border with the US – silver, gold, copper and under Diaz, Petroleum (was 3rd in world petrol producing nations). The diversity of exports (rubber, hides, cattle, lead chick peas) meant that there was more stability in external sector. Since the exporting regions were not close to each other many different regions were touched by flourish international trade. Thus we would expect to see regional subnational economies (such as the coffee economies around Rio in Brazil) but there was little of this and the average Mexican was not benefitted by growth even if the exports were coming from his locale.
  • Elsewhere a monocultural pattern of development e.g. Colombia 46% exports were coffee leading to basic instability of export economy.

Domestic Markets

  • Large changes in consumer habits in all countries of LA. Imports largely from Britain (although some artisan industries never entirely died out).
  • Industrialisation was patchy but nevertheless it was the dawn of the factory age inspired by a change in tastes that favoured factory goods over traditional goods.

New Characteristics of the Market

  • Doubly joined to the world market: firstly the organization for export expansion provided central resource allocation dynamic. Foregin, not domestic demand called the tune. Secondly changes in domestic demand reveal that consumption was heavily commited to participation in foreign trade.
  • Not everyone accepted the liberal economic model, some variation to laissez-faire was introduced in the region.
  • All product innovation originated abroad so all monopoloy profits accrued to foreign entities.

Factor Markets


Land was fundamental to the nature of the export economies (the good exported were land intensive”) and it also conditioned the social and political arrangements of the period.

The large increase in the supply of land needed to grow exports came from three sources:

  1. Private appropriations of the public domain – coffee pushed cattle/farming to ever further outlying parts of the region. Huge amounts of land that once belonged to the state then fell into private hands, either a family or company (in the case of mining land). Small/medium mines would be family run until they presented significant attractiveness at which point they would be bought by international companies – “denationalistion” was most significant for mining than rural properties (although banana plantations of central America etc.)
  2. Conversion of land held by haciendas to commercial use – triggered by railway lines as they moved into new areas. Previously unused estate land would be converted to producing export goods. Some estates were subdivided, but others were concentrated into larger production units.
  3. Corporate holdings in the more traditional areas – e.g. church land e.g. mexico – 1850s legal reform put church land in the hands of private owners. Market purchase and simple seizure were both used.
  • Generally large land owners had the upper hand as concessions for mining etc. were given to those who could influence politicians. Where export products were demanded the demand for land went up and so did prices pushing those peasant farmers etc. to the furthest periphery as they had no access to credit etc.

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