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Corporate Profitability and Economic Policy During Argentina’s Great Depression, 1929–1934

Published online by Cambridge University Press:  26 March 2020

JOSEPH A. FRANCIS  and
CARLOS NEWLAND
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Abstract

An analysis of corporate profitability leads to a reevaluation of economic policy during Argentina’s Great Depression. While the overall profit rate collapsed, some sectors were more affected than others: Commerce, insurance, and agriculture were worst hit, followed by transportation, industry, and finally banking, which was a beneficiary of economic policy, especially the decision not to default on or renegotiate the external public debt. Had a different economic policy been pursued, it is likely that the international crisis would not have affected Argentina so severely. Most importantly, it would have been possible to further devalue the peso, which would have benefitted both agriculture and industry. Moreover, interest rates would have been lower, and continued government borrowing would not have crowded out investment in the private sector. An analysis of corporate profitability thus leads to a less positive view of economic policy during Argentina’s Great Depression than is often found in the existing literature.

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Article
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Enterprise & Society , Volume 22 , Issue 2 , June 2021 , pp. 538 - 565
Copyright
© The Author(s) 2020. Published by Cambridge University Press on behalf of the Business History Conference. All rights reserved.

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References

Bibliography of Works Cited

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Balboa, Manuel. “La evolución del balance de pagos de la República Argentina, 1913–1950.” Desarrollo Económico 12, no. 45 (1972): 151–172.CrossRefGoogle Scholar
Campa, José Manuel. “Exchange Rates and Economic Recovery in the 1930s: An Extension to Latin America.” Journal of Economic History 50, no. 3 (1990): 677–682.CrossRefGoogle Scholar
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Gerchunoff, Pablo, and Machinea, José Luis, “Going through the Labyrinth: The Political Economy of Argentina’s Abandonment of the Gold Standard (1929–1933).” CEPAL Review, no. 117 (2015): 102–120.Google Scholar
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Lluch, Andrea, and Salvaj, Erica. “Longitudinal Study of Interlocking Directorates in Argentina and Foreign Firms’ Integration into Local Capitalism (1923–2000).” In The Power of Corporate Networks: A Comparative and Historical Perspective, edited by David, Thomas and Westerhuis, Gerard, 257–75. New York: Routledge, 2014.Google Scholar
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Newland, Carlos. “Una aproximación microeconómica al cambio estructural argentino 1926–1945.” Desarrollo Económico 57, no. 222 (2017): 329–352.Google Scholar
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Randall, Laura. “Lies, Damn Lies, and Argentine GDP.” Latin American Research Review 11, no. 1 (1976): 137–58.Google Scholar
Salvatore, Ricardo D. “Better-Off in the Thirties: Welfare Indices for Argentina, 1900–1940.” In Living Standards in Latin American History: Height, Welfare, and Development, 1750–2000, edited by Salvatore, Ricardo D., Coatsworth, John H., and Challú, Amílcar E., 127–165. Cambridge: Harvard University Press, 2010.Google Scholar
Sánchez Román, José Antonio. “Resistance without Revolt: The Shaping of a Tax Culture in Modern Argentina (1930–1955).” Journal of Policy History 25, no. 3 (2015): 422–443.Google Scholar
Skupch, Pedro R. “Las consecuencias de la competencia de transportes sobre la hegemonía británica en la Argentina (1919–1939).” Económica 17, no. 1 (1971): 119–141.Google Scholar
Ting, Chien‐Jung, and Ho, Tai‐Kuang. “Exchange Rates and Economic Recovery in the 1930s: An Extension to Asia.” Australian Economic History Review 58, no. 2 (2018): 134–152.CrossRefGoogle Scholar
Boletín Oficial de la Bolsa de Comercio, 1934.Google Scholar
Bolsa de Cereales de Buenos Aires, Numero Estadístico, 1986.Google Scholar
Industrias y Finanzas, 1935.Google Scholar
Interés Comercial, 1936.Google Scholar
La Información, 1935.Google Scholar
Review of the River Plate, 1934.Google Scholar
Revista de Economía Argentina, 1939.Google Scholar
Revista Económica, various years.Google Scholar
South American Journal, 1932.Google Scholar
Departamento de Hacienda. Memoria correspondente al año 1934, Vol. 1.Google Scholar
Departamento de Hacienda. Memoria correspondente al año 1937, Vol. 1.Google Scholar
League of Nations. Statistical Year-book, various years.Google Scholar
República Argentina. Censo industrial de 1935, Buenos Aires, 1938.Google Scholar
República Argentina. Anuario Agropecuario, various years.Google Scholar
República Argentina. Anuario de Estadística Agropecuaria, 1925–1926.Google Scholar
República Argentina. Boletín de Estadística y Economía Agropecuaria, 1960.Google Scholar
United Kingdom, Agricultural Statistics, various years.Google Scholar
U.S. Department of Commerce, Guide to Industry Classifications for International Surveys, 2012.Google Scholar
CEPAL. “El desarrollo económico de la Argentina: anexo: algunos estudios especiales y estadísticas macroeconómicas preparados para el informe.” Mimeo. 1958.Google Scholar
DIA Agency, Inc. Materials for the History of Argentine Railways. Data DVD. 2010.Google Scholar
López, Damián. “Respuestas a la Gran Depresión: un estado de la cuestión sobre las nuevas modalidades de intervención del Estado en la economía, 1930–1943.” Paper presented at XXII Jornadas de Historia Económica de la AAHE, Río Cuarto, September 21–24, 2010. Accessed November 20, 2017. http://www.aahe.fahce.unlp.edu.ar/jornadas-de-historia-economica/xxii-jornadas-de-historia-economica-rio-cuarto-2010/ponencias/lopez.pdf.Google Scholar
Allende, Beveraggi, Walter, M. El servicio del capital extranjero y el control de cambios: la experiencia argentina de 1900 a 1943. México: Fondo de Cultura Económica, 1954.Google Scholar
Cassis, Youssef. Big Business: The European Experience in the Twentieth Century. Oxford: Oxford University Press, 1997.Google Scholar
Cassis, Youssef, Colli, Andrea, and Schröter, Harm, eds. The Performance of European Business in the Twentieth Century. Oxford: Oxford University Press, 2016.CrossRefGoogle Scholar
Comité Nacional de Geografía. Anuario Geográfico Argentino. Buenos Aires: Comité Nacional de Geografía, 1941.Google Scholar
Confederación Argentina del Comercio, de la Industria y de la Producción (CACIP). Tres sugestiones para aliviar la crisis. Buenos Aires: CACIP, 1933.Google Scholar
Cortés Conde, Roberto. La economía argentina en el largo plazo: ensayos de historia económica de los siglos XIX y XX. Buenos Aires: Editioral Sudamerica, 1997.Google Scholar
della Paolera, Gerardo, and Taylor, Alan M.. Straining at the Anchor: The Argentine Currency Board and the Search for Macroeconomic Stability, 1880–1935. Chicago: University of Chicago Press, 2001.Google Scholar
Díaz Alejandro, Carlos. Essays on the Economic History of the Argentine Republic. New Haven: Yale University Press, 1970.Google Scholar
Ferreres, Orlando J. Dos siglos de economía argentina, 1810–2004: historia argentina en cifras. Buenos Aires: Fundación Norte y Sur, 2005.Google Scholar
Gondra, Luis Roque. Elementos de economía política. Buenos Aires: Librería La Facultad, 1933.Google Scholar
Halperín Donghi, Tulio. La república imposible. Buenos Aires: Ariel, 2004.Google Scholar
Nitzan, Jonathan, and Bichler, Shimshon. Capital as Power: A Study of Order and Creorder. Abingdon: Routledge, 2009.CrossRefGoogle Scholar
Ortiz Batalla, Javier. “Finanzas públicas, moneda y bancos (1914–1945).” In Nueva Historia de la Nacion Argentina, edited by de la Historia, Academia Nacional, vol. 8, pp. 525–549. Buenos Aires: Sudamericana, 2002.Google Scholar
Pinedo, Federico. Siglo y medio de economía argentina. Buenos Aires: Centro de Estudios Monetarios Latinoamericanos, 1961.Google Scholar
Rocchi, Fernando. Chimneys in the Desert: Industrialization in Argentina during the Export Boom Years. Stanford: Stanford University Press, 2006.Google Scholar
Salera, Virgil. Exchange Control and the Argentine Market. New York: Columbia University Press, 1941.CrossRefGoogle Scholar
Schvarzer, Jorge. Bunge & Born: crecimiento y diversificación de un grupo económico. Buenos Aires: CISEA, 1989.Google Scholar
Smith, Peter H. Politics and Beef in Argentina: Patterns of Conflict and Change. New York: Columbia University Press, 1969.Google Scholar
Vázquez Presedo, Vicente. Estadísticas históricas argentinas (comparadas). Vol. 2, Segunda parte 1914–1939. Buenos Aires: Ediciones Macchi, 1971.Google Scholar
Alhadeff, Peter. “The Economic Formulae of the 1930s: A Reassessment.” In The Political Economy of Argentina, 1880–1946, edited by Tella, Guido Di, 95–119. London: Palgrave Macmillan, 1986.CrossRefGoogle Scholar
Alhadeff, Peter. “Finance and the Economic Management of the Argentine Government in the 1930s.” PhD diss., St Anthony’s College, 1983.Google Scholar
Balboa, Manuel. “La evolución del balance de pagos de la República Argentina, 1913–1950.” Desarrollo Económico 12, no. 45 (1972): 151–172.CrossRefGoogle Scholar
Campa, José Manuel. “Exchange Rates and Economic Recovery in the 1930s: An Extension to Latin America.” Journal of Economic History 50, no. 3 (1990): 677–682.CrossRefGoogle Scholar
Chu, David S. C. “The Great Depression and the Industrialization in Latin America: Response to Relative Price Incentives in Argentina and Colombia 1930–45.” PhD diss., Yale University, 1972.Google Scholar
Cottely, Esteban. “Enigmas de la política cambiaria.” Boletín Techint, no. 262 (1990): 29–78.Google Scholar
della Paolera, Gerardo, and Taylor, Alan M.. “Economic Recovery from the Argentine Great Depression: Institutions, Expectations, and the Change of Macroeconomic Regime.” Journal of Economic History 59, no. 3 (1999): 567–599.CrossRefGoogle Scholar
della Paolera, Gerardo, and Taylor, Alan M.. “Internal Versus External Convertibility and Emerging-Market Crises: Lessons from Argentine History.” Explorations in Economic History 39, issue 4 (2002): 357–389.Google Scholar
Eichengreen, Barry, and Sachs, Jeffrey. “Exchange Rates and Economic Recovery in the 1930s.” Journal of Economic History 45, no. 4 (1985): 925–946.CrossRefGoogle Scholar
Gerchunoff, Pablo, and Machinea, José Luis, “Going through the Labyrinth: The Political Economy of Argentina’s Abandonment of the Gold Standard (1929–1933).” CEPAL Review, no. 117 (2015): 102–120.Google Scholar
Giberti, Horacio. “Vicissitudes of Arable Farming Enterprise in Argentina during the Past Twenty Years.” Review of the River Plate, July 12, 1950: 15–21.Google Scholar
Lanciotti, Norma S. “Auge y declive de las empresas financieras e hipotecarias de origen británico en la argentina, 1885–1960.” Avances del Cesor 11, no. 11 (2014): 175–197.CrossRefGoogle Scholar
Lanciotti, Norma S., and Bartolomé, Isabel. “Global Strategies, Differing Experiences: Electricity Companies in Two Late-Industrialising Countries: Spain and Argentina, 1890–1950.” Business History 56, no. 5 (2014): 724–145.CrossRefGoogle Scholar
Lewis, Daniel Kent. “A Political and Economic History of Grain Farming in Buenos Aires Province, Argentina, 1914 to 1943.” PhD diss., University of California, 1990.Google Scholar
Lluch, Andrea, and Salvaj, Erica. “Longitudinal Study of Interlocking Directorates in Argentina and Foreign Firms’ Integration into Local Capitalism (1923–2000).” In The Power of Corporate Networks: A Comparative and Historical Perspective, edited by David, Thomas and Westerhuis, Gerard, 257–75. New York: Routledge, 2014.Google Scholar
Nakamura, Leonard I., and Zarazaga, Carlos E.J.M.. “Banking and Finance, 1900–35.” In A New Economic History of Argentina, edited by Paolera, Gerardo della and Taylor, Alan M., 295–323. Cambridge: Cambridge University Press, 2003.Google Scholar
Newland, Carlos. “Una aproximación microeconómica al cambio estructural argentino 1926–1945.” Desarrollo Económico 57, no. 222 (2017): 329–352.Google Scholar
Prebisch, Raúl. “El momento presente de nuestra economía.” In Obras 1919–1948, vol. 2, 158–306. Buenos Aires: Fundación Raúl Prebisch, 1991.Google Scholar
Randall, Laura. “Lies, Damn Lies, and Argentine GDP.” Latin American Research Review 11, no. 1 (1976): 137–58.Google Scholar
Salvatore, Ricardo D. “Better-Off in the Thirties: Welfare Indices for Argentina, 1900–1940.” In Living Standards in Latin American History: Height, Welfare, and Development, 1750–2000, edited by Salvatore, Ricardo D., Coatsworth, John H., and Challú, Amílcar E., 127–165. Cambridge: Harvard University Press, 2010.Google Scholar
Sánchez Román, José Antonio. “Resistance without Revolt: The Shaping of a Tax Culture in Modern Argentina (1930–1955).” Journal of Policy History 25, no. 3 (2015): 422–443.Google Scholar
Skupch, Pedro R. “Las consecuencias de la competencia de transportes sobre la hegemonía británica en la Argentina (1919–1939).” Económica 17, no. 1 (1971): 119–141.Google Scholar
Ting, Chien‐Jung, and Ho, Tai‐Kuang. “Exchange Rates and Economic Recovery in the 1930s: An Extension to Asia.” Australian Economic History Review 58, no. 2 (2018): 134–152.CrossRefGoogle Scholar
Boletín Oficial de la Bolsa de Comercio, 1934.Google Scholar
Bolsa de Cereales de Buenos Aires, Numero Estadístico, 1986.Google Scholar
Industrias y Finanzas, 1935.Google Scholar
Interés Comercial, 1936.Google Scholar
La Información, 1935.Google Scholar
Review of the River Plate, 1934.Google Scholar
Revista de Economía Argentina, 1939.Google Scholar
Revista Económica, various years.Google Scholar
South American Journal, 1932.Google Scholar
Departamento de Hacienda. Memoria correspondente al año 1934, Vol. 1.Google Scholar
Departamento de Hacienda. Memoria correspondente al año 1937, Vol. 1.Google Scholar
League of Nations. Statistical Year-book, various years.Google Scholar
República Argentina. Censo industrial de 1935, Buenos Aires, 1938.Google Scholar
República Argentina. Anuario Agropecuario, various years.Google Scholar
República Argentina. Anuario de Estadística Agropecuaria, 1925–1926.Google Scholar
República Argentina. Boletín de Estadística y Economía Agropecuaria, 1960.Google Scholar
United Kingdom, Agricultural Statistics, various years.Google Scholar
U.S. Department of Commerce, Guide to Industry Classifications for International Surveys, 2012.Google Scholar
CEPAL. “El desarrollo económico de la Argentina: anexo: algunos estudios especiales y estadísticas macroeconómicas preparados para el informe.” Mimeo. 1958.Google Scholar
DIA Agency, Inc. Materials for the History of Argentine Railways. Data DVD. 2010.Google Scholar
López, Damián. “Respuestas a la Gran Depresión: un estado de la cuestión sobre las nuevas modalidades de intervención del Estado en la economía, 1930–1943.” Paper presented at XXII Jornadas de Historia Económica de la AAHE, Río Cuarto, September 21–24, 2010. Accessed November 20, 2017. http://www.aahe.fahce.unlp.edu.ar/jornadas-de-historia-economica/xxii-jornadas-de-historia-economica-rio-cuarto-2010/ponencias/lopez.pdf.Google Scholar