The Argentine Paradox | An Economic Conundrum

Argentina is the second-largest country in South America after Brazil. A country of immigrants, Argentines usually refer to their nation as a crisol de razas crucible of races.

From the late 1850s right up to 1950, Argentina was the country with the second biggest immigration wave in the world at 6.6 million; second only to the United States in the numbers of immigrants received. A large majority of these immigrants came from Italy and Spain.

In the late 19th century, in the heyday of Argentinian economic affluence, Argentina was among the top five countries in per capita income terms. It was richer than all the European countries except Britain and on a par with economies like the United States, Canada and Australia.

The economic history of Argentina is one of the most studied; due to the “Argentine paradox”, its unique condition as a country that had achieved advanced development in the early 20th century but experienced a reversal in fortune. This sharp and unexpected reversal inspired an enormous wealth of literature and analysis on the causes of this decline.

At the turn of the 20th century, Argentina was one of the world’s wealthiest countries and it seemed set to steer into a bright future ahead. This impressive and sustained economic performance was primarily driven by the export of agricultural goods.

In macroeconomic terms, Argentina was one of the most stable and conservative countries until the Great Depression, after which it turned into one of the most unstable.

Volatility has come to define Argentina’s recent economic history. One of the world’s richest nations has become a case study of economic decline and of an endless stream of booms and busts.

Given the country’s rich resources, relatively well-educated workforce and location far from wars and natural disasters, government failure stands out as the main culprit.

The economic decline of Argentina during the 20th century is considered by some to be unparalleled in modern history.