The Great Depression in Latin America

Duke University Press

Contents

The Impact of the Depression on Argentine Society

Roy Hora

Social and political developments in Argentina during the period that stretches from the beginning of the Great Depression to Colonel Juan Perón's rise to power a decade and a half later have been studied from two points of view. During the 1960s and 1970s, most scholars characterized this period, known as the Década Infame, as one of political reaction and social regression. According to this view, the coup d'état led by General José F. Uriburu on September 6, 1930, that overthrew President Hipólito Yrigoyen and the subsequent systematic use of electoral fraud by the ruling Concordancia (1932–43) allowed the Conservatives and their allies on the right to reverse the reformist politics furthered by the Radical governments (1916–30) after the Sáenz Peña electoral reform democratized the (male) franchise. This interpretation also emphasizes that the Great Depression had a negative impact on popular welfare, in both rural and urban areas, whose effect lasted for more than a decade, and which undid much of the social progress that had been achieved in previous decades, most particularly during the period of Radical rule.

This way of looking at the 1930s holds that this social and political relapse ran parallel to deep economic transformations. As a result of the contraction of the world market for agricultural products, Argentina's export sector lost momentum. When economic recovery began, the inward-looking, labor-intensive manufacturing sector overtook export agriculture as the major engine of growth. Recovery was aided by public policy that, as a result of the change in the political base of the state, became more favorable to business interests than during the democratic era that ended in 1930. After General Uriburu's coup d'état removed Yrigoyen from office, the country fell under the rule of the Concordancia. A sort of united front of those forces of the Center and the Right that had been ousted from the scene by the rise of the Radicals, the Concordancia controlled politics from 1932 to 1943, and for that matter repeatedly resorted to electoral falsification in various degrees, especially in the province of Buenos Aires. Far more pro-capitalist than its Radical predecessors, the Concordancia served the interests of a business elite made up of large landowners (whose wealth dated back to the agro-export period) and, to a lesser extent, of manufacturing and urban entrepreneurs who benefited from inward-looking growth. Indifference to popular demands on the part of the governing elite, repression of political dissidents and labor militants, and the weakness of the unions explain why there was no social or labor reform in the 1930s, despite mounting discontent. It was only with the accession of Perón to government that social reform became a central aspect of public policy.

According to this narrative, then, the 1930s was a period marked by rupture with the previous export-led era but also with the Peronist years. In fact, much of the persuasive power of this account lies in its capacity to explain the rise of Peronism as the product of the new social forces that emerged in the wake of the economic and social changes brought about by the Depression, and as a response to the reactionary political climate prevalent throughout the Década Infame. Following this interpretation, the critical factor in the emergence of Peronism—the movement that would from that point onward take center stage in Argentinean politics—was the growing tension between this undemocratic, elitist political order and the growing economic and social weight of urban labor.

In the past twenty-five years, this interpretation has been called into question. Major processes of change that have taken place since the 1980s, such as deindustrialization, the erosion of working-class politics, and Peronism's electoral defeats (and changes) during the post-1983 democratic period, have had a strong impact on the way historians regard the 1930s. Also, greater awareness of the importance of manufacturing growth and social betterment during the export-led era has given rise to more balanced, even more sympathetic, views on the oligarchic republic (1880–1916) and the pre-1945 economic and social development of the country. As a result, the rise of industrial society has lost much of its centrality as the dominant theme in the country's mid-twentieth-century history. Understanding of the Década Infame as an era of manufacturing growth and working-class ascent has given way to an alternative view that emphasizes continuity with earlier periods. The 1930s are seen as a period not of rupture but of continuation of the processes of economic growth and diversification and, more importantly, social betterment that wide sectors of society, including the popular classes, had experienced since the turn of the century, and which had gathered pace during the prosperous 1920s. In this way, the Década Infame is located within the context of a broader, interwar period. According to this view, once the worst effects of the Great Depression had subsided, society again became open and mobile, characterized by increasing levels of well-being and renewed opportunities for social advancement, especially in the large littoral cities. It is often noted that, apart from manufacturing, the services sector also experienced significant growth during the 1930s, thus consolidating an economic structure that was not only more industrialized but also more complex and diversified.

According to this view, as social mobility and individual progress became more widespread in the interwar period, the confrontational, class-based popular identities forged during the turn-of-the-century years (when Anarchist influence over the working classes was at its height) lost salience. Thus, while adherents to the first interpretation outlined above suggest that the formation of labor institutions and a stronger (albeit repressed) worker culture gained momentum during the 1930s, this second interpretation emphasizes a gradual erosion in class-based identities. Instead, it points to the making of a wider "popular sectors" identity, in part shaped by middle-class values, and defined less by class than by determinants such as culture, consumption, and residential patterns. In sum, where the first narrative emphasizes the social and political alienation of the new urban laborers created by industrialization, the second highlights the identification of large sections of the urban population with aspirations for social or family betterment compatible with the existing order and, as a result, a strong popular identification with the moderate, reformist political agenda articulated by the Radicals and the Socialists.

Finally, this second perspective sees the political developments that put an end to the Década Infame under a different light. Explanations of the rise of Peronism downplay the analytical weight of labor activism and of popular demands that could not be accommodated within a reformed version of the political order of the Década Infame. In the more integrated and harmonious society portrayed by proponents of this argument, the economic and social transformations brought about by the growth of manufacturing play a minor part in the emergence of Peronism. Politics and ideology, rather than social and economic change, are the most important explanatory variables. According to this view, the authoritarian, nationalist ideas dominant in the armed forces and the Catholic Church, the political and ideological impact of World War II, the mobilization of the center and left political parties and the middle classes against the military that took power in June 1943, and the besieged military regime's struggle for survival in 1944–45 were developments even more important than the upsurge of working-class activism in shaping the political scenario that brought Colonel Perón to power.

Because of their emphasis on either change or continuity, exclusion or integration, these two interpretations of the Great Depression years are often regarded as alternative narratives. However, important divergences stem from the fact that they focus on two distinct groups: the industrial workers in the first case, and the urban middle classes and the more integrated and prosperous segments of the urban popular classes in the second. In fact, this chapter argues that these interpretations actually explore two parallel and (to some extent) complementary realities, both of equal importance for understanding how Argentina developed during the 1930s and what was the political legacy of the Great Depression. In order to achieve a better understanding of the 1930s, therefore, these two narratives need to be brought together.

The first section of this chapter briefly describes the impact of the Great Depression. Then, the chapter looks into how the slump affected the middle classes and the most integrated and prosperous sectors of the urban workers. I contend that long-established forces of integration were at play during this period, promoting social mobility and increased levels of welfare. However, this experience was less widespread and less potent than in earlier decades. The next section shifts attention to the word of labor, exploring how the rise of industry and new forms of labor organization affected the workforce. It states that deteriorating living conditions and greater hostility toward the established order contributed to the emergence of the first industry-wide trade unions in the manufacturing sector, and it assesses the long-term significance of the changes in the workers' political consciousness associated with this process. Finally, the concluding section summarizes the central themes of this article and offers some indications on integrating the two narratives outlined above into a more complex view of how Argentinean society was transformed as a result of the Depression.

Argentina into the Depression

The Argentine economy, highly integrated into international trade and finance flows, was strongly affected by the world slump. Between 1928 and 1932, exports fell from $1 billion to $335 million. GDP contracted by 14 percent between 1929 and 1932. Public finances also suffered, the consequence not only of decreasing revenues (still highly dependent on international trade taxes) but also of the drying up of external credit. To balance the trade deficit, the government restricted external purchases and remittances (devaluation of the peso, exchange controls). Duties on imported goods were increased, and quantitative restrictions on imports were imposed.

These measures created incentives for the development of domestic production through import substitution industrialization, and by 1933 the manufacturing sector began to revive. Argentina's industrial structure, the most advanced in Latin America, developed in new directions. A modest increase in export values contributed to growth, but economic recovery was largely the result of increased production for the domestic market, led by new sectors such as textiles, chemistry, and metals. Between 1933 and 1945, GDPexpanded by almost 4 percent per year on average, barely a point below the 1920–29 pace of growth. Despite the weak performance of the export sector throughout the decade, the impact of the Great Depression was less intense in Argentina than in Chile, Canada, or the United States, all countries where GDP fell by over 20 percent and recovery was slower and more laborious. However, recovery was not as fast as in Brazil or Mexico, probably because strong links with Britain and a rather timid, orthodox economic policy prevented Argentina from channeling more resources into the most dynamic sectors of the economy. The much-criticized Roca-Runciman bilateral agreement, designed to protect beef exports to Britain and which forced Argentine producers and consumers to buy British goods rather than cheaper and more useful U.S. and German products, was probably inevitable in a world that was moving toward bilateralism. Even if less contentious, servicing the debt proved less beneficial, largely because, despite Argentina's good behavior, the influx of foreign loans and investment was never resumed. To a certain extent, then, Argentina paid a higher price for its financial policy than for its commercial policy.

Economic recovery was largely an urban phenomenon, spurred by the development of manufacturing and the expansion of the services sector. One of the most important consequences of the shift from export agriculture to inward-looking development was that it reshaped the economic elite, which had up to that point been dominated by large landowners. The fall in exports brought with it a dramatic decrease in the value of both the assets and the income of this group. Large estancieros suffered heavy losses. Over the course of the 1930s, rural wealth was silently displaced from the top echelons of the wealthy elite by the more dynamic and prosperous urban capitalists. By the early 1940s, less than one out of every six among the largest one hundred taxpayers derived their income from rural business. However, newly amassed wealth remained detached from high society. Very few of these urban nouveaux riches came from upper-class circles, and even fewer of them harbored aspirations to marry into or intermingle with the landed establishment. Thus, the renovation of the top echelons of the business community was deeper and more abrupt than the social decline of the turn-of-the-century rural elite. In the popular mind, wealthy landowners remained as the country's most powerful group. In a period of greater popular hardship, this came at a price. During the 1930s, the public image of Argentina's most exclusive group turned increasingly negative. Widely perceived as reactionary, exploitative of the laborers who worked the land, and harmful to the national interest, the oligarquía terrateniente became the object of much criticism.

Public hostility toward this landed oligarchy was closely tied to the problems faced by the rural population. We lack a clear picture of the impact of the Depression in the interior provinces. The available evidence, however, suggests that the gap in living standards between the littoral and the interior provinces deepened further. This was also what most contemporaries believed. In a well-known study of social conditions in the northwestern provinces published in 1938, Alfredo Palacios denounced "the lack of any future for innumerable Argentinean children," the consequence of all those "illnesses fostered by misery."

The Great Depression had a profound and negative impact on popular welfare in the pampean countryside, the heart of the agrarian export economy. Agricultural mechanization in the 1920s and the collapse of grain and livestock prices during the Depression led to a twin, long-lasting contraction in labor demand and income. Large landowners saw their assets and incomes shrink, but their superior market power allowed them to transfer much of this fall to tenants and wage laborers. A number of important labor conflicts and tenant strikes erupted between 1930 and 1933. Lacking a strong organization and further weakened by the economic downturn, workers and tenants were always defeated. Thereafter, migration became a more viable option than speaking out.

Migration, one of the most important consequences of the Depression, had a profound demographic impact. Between 1930 and 1947, Argentina grew from eleven to sixteen million inhabitants. However, during the 1930s, for the first time in the country's history, the rural population (those residing in settlements of less than two thousand inhabitants) declined, reaching a similar level to that of 1914. People leaving the countryside went primarily to the large littoral cities, especially Buenos Aires and its surrounding area. Between 1936 and 1943, this metropolis absorbed some 72,000 internal migrants each year; between 1943 and 1947, that average rose to 117,000. In little over a decade, one million provincianos settled in Buenos Aires. This sustained increase in urban population meant that by the mid-1940s, one in every four Argentines resided in the federal capital and its urban periphery. The growing demographic weight of this large metropolis did not go unnoticed. By the 1940s, views like those of Alejandro Bunge and Ezequiel Martínez Estrada, who argued that Argentina was a country with a large head and a withered body, had become quite common.

Migration from the pampean provinces dominated during the first half of the 1930s (when the impact of the crisis in export agriculture was at its height), accounting for some two-thirds of total migrants. In the latter part of the decade, however, migration from the interior provinces increased markedly. For residents of places such as Santiago del Estero, Catamarca, or La Rioja, leaving their land was not a new experience: migration from the poor interior provinces to the labor-hungry pampean region stretched back to colonial times. For much of the nineteenth century and until 1930, however, the sheer size of the European migration made internal migration rather invisible. Furthermore, much of the internal migration that took place before 1930 was directed toward the more developed and labor-demanding areas of the interior, such as Mendoza or Tucumán. As a result of the Depression, this pattern was dramatically altered. European migration stopped (with the exception of a brief resumption in the immediate postwar period) at the same time that an increasing number of dark-skinned provincianos were moving toward the large littoral conurbations. Between 1914 and 1947, foreign-born inhabitants in Buenos Aires fell from 49.3 to 27.5 percent of the total population. In that same period, provincianos rose from 18 to 44 percent of the total native population in the federal capital, and most likely to over 55 percent in Greater Buenos Aires.