Chimneys in the Desert: Industrialization in Argentina during the Export Boom Years, 1870-1930

Published by EH.NET (June 2006)

Fernando Rocchi, Chimneys in the Desert: Industrialization in Argentina during the Export Boom Years, 1870-1930. Stanford, CA: Stanford University Press, 2005. xviii + 394 pp. $70 (cloth), ISBN: 0-8047-5012-2.

Reviewed for EH.NET by Joel Horowitz, Department of History, St. Bonaventure University.

Argentina’s inability to sustain the prosperity, which in the late 1920s made it one of the richest countries in the world, has led to much speculation about the causes of that failure. Many have placed a good deal of the blame on Argentina’s failure to create a self-sustaining process of industrialization. However, as Fernando Rocchi (Chair, Department of History, Universidad Torcuato Di Tella, Argentina) points out in the book under review, there have been extremely few modern systematic studies of the early stages of industrialization. Many commentators have just accepted the view, which principally came from the industrialists, that early industrialization occurred in a largely hostile environment, since the primary providers of credit, the state owned banks, were unwilling to grant loans and little or no tariff protection was provided.

Rocchi sets out to shift this vision. His work is wide ranging, well written and extremely perceptive. It is based on an impressive array of sources, including but not limited to company and bank records and diplomatic archives. Given the state of the archives and libraries, this is an extraordinary accomplishment. In many cases, the author makes his point by showing how individual companies operated. In this way we can see the micro level, as well as the larger trends. As Rocchi points out, Argentine industrialization differed from the classical models since the country had little in the way of an artisanal tradition. Most of its skilled workers were immigrants. For Rocchi the key hindrance to industrialization lay in the small size of the market that prevented the achievement of enough efficiency to win markets abroad. This was despite the rapid population growth, creation of a national market, and a culture of consumption. Argentina also lacked key inputs such as coal and iron and had relatively high labor costs. Rocchi argues, quite convincingly, that industrialization was not constrained by the inability to obtain capital from the state controlled banks. He demonstrates, using the archives of the Banco de la Naci?n and the Banco de la Provincia de Buenos Aires, that numerous large and medium-sized companies did receive loans from state controlled banks. Companies also raised money on the stock market. He argues, however, that self financing, which was very common, may have been the best strategy given the volatility of consumer demand which depended on foreign purchases of Argentine exports. Rocchi does not really demonstrate that consumer demand was that much less dependable than in other countries.

How much tariff protection industry had is difficult to demonstrate given the complex way that rates were calculated, but Rocchi makes clear that industrial production was frequently protected by either protective or revenue tariffs. Arguments in congress show that critical support existed for the idea of protecting industry. Clearly the conditions for industrialization were much more complex than has usually been thought and it would be difficult to classify them as hostile.

Rocchi’s goals are larger than just showing the beginning of industry. He devotes a well crafted chapter to the creation of a consumer society in Buenos Aires, which in many ways resembled that of the contemporary North Atlantic world with department stores and the like. Harrods, the well known English department store, even had a branch in Buenos Aires. The author also includes a chapter on how Buenos Aires-based firms created national markets for themselves, intensifying the central role of the city in Argentine economics. Large firms were created, as were trusts. Rocchi also discusses how conflict with the labor force helped forge cooperation between industrialists.

Rocchi gives us a picture of a rather dynamic sector of the economy that responds relatively well to growing demands but is limited by the size and nature of the economy. This is a convincing argument but not one without flaws. The author is, at times, somewhat too determined to claim originality for his arguments. He clearly builds on others and while he has made by far the best case for his ideas, at times he does not give others all their due. More importantly, although the book purports to cover the period from 1870 to 1930, very little material exists for the period after the first fair presidential election in 1916. We therefore lack a full discussion of the impacts of World War I and of the 1920s. In the latter period the nature of industrialization shifted due to the intensification of direct investment by foreign firms, particularly from the United States. If one is going to make arguments about the nature of industrialization prior to the Great Depression, it would be helpful to know more about these changes.

Despite these caveats, Fernando Rocchi has given us an excellent work that has reshaped our vision of early industrialization in Argentina. It also helps us to understand some of the innate problems of the economy and shows why some of the prescriptions later given for the economy did not solve its problems. Like all good books, this should inspire further research. Anyone interested in the problematic history of the Argentine economy will find this book a stimulating and convincing work.

Joel Horowitz is Professor of History at St. Bonaventure University and is currently finishing a monograph on political mobilization in Buenos Aires between 1916 and 1930.