The beef industry changed.
Detroit Once Controlled 90% of America's Car Market — So Why Did Americans Start Buying Japanese?
Peronists.
And while fascists can at least still grow food they are quite incapable of growing an economy.
Because American built cars couldn't match the quality of Japanese (and German) cars.
“”Argentina Was Once One of the Richest Countries on Earth — So What Went Wrong?””
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The Ratlines (Rattenlinien)? (just a guess)
And later on... the other rats... like Soros, who “invested” in Argentina, didn’t help.
A bit simplistic answer re: ‘what went wrong’, and yet... considering the ‘types’ that have meddled in Argentina for a generation... it makes perfect sense that Argentina would now be struggling. And rather disturbing, because these same types are attempting to “meddle” in the USA as we speak.
Louisiana was once one of the richest states in the USA.
Argentina achieved massive wealth in the late 19th and early 20th centuries through a powerful combination of ultra-fertile land, foreign investment, and a massive wave of European immigration. This started in the mid 1800’s.
But the wheels came off in the 2000’s. On December 17, 2015, Macri lifted foreign exchange restrictions, leading to a 30% devaluation of the Peso, the largest since 2002. In January 2016 it was devalued to 44 cents. Unemployment reached double digits as well, with massive layoffs in the public and private sectors. In April 2016, monthly inflation rose to 41.7%, one of the highest in the world.
And the ranchers got nailed with residuals. In December 2015, the government announced the elimination of export restrictions for wheat, maize and meat, while reducing withholding taxes on soybeans to 30% at a fiscal cost of 23,604 million pesos. This led to large price increases in staple products including oil, which increased by 51%, flour 110%, chicken 90%, noodles 78%, and a 50% increase in the price of meat in two weeks. Because of a 150-180% increase in feed prices, many pig producers were in crisis. It is estimated that in the province of Buenos Aires alone, 40 thousand pork producers would fail.
An extremely high inflation rate was strangling the urban and rural working population: decreasing from the astounding 40% of 2016, it was expected to be 17% by 2018. Other vulnerabilities include an unemployment rate close to 9% (expected to be in two digits in the next two years), as well as the sharp rise in the current-account deficit around 3% to 4% of GDP in 2017–2018 thanks to an over-valued currency. Forecasts from the IMF show GDP growth in 2018 decelerating to 2.5% from 2.75%.
And land ownership was under the control of few rather than the smaller ranches. According to Di Tella and Zymelman, the main difference between Argentina and other settler societies such as Australia and Canada was its failure to seek adequate alternatives to compensate for the end of geographical expansion with the definitive closing of the frontier. Solberg noted the differences between the land distribution in Canada, which led to a rising number of small farmers, and the smaller number of landowners each with larger areas of land in Argentina didn’t allow for expansion or contraction so growth stymied.
The blame of all this implosion falls to their government. It has been pointed out that the relatively high dependency ratio and the slow demographic transition in Argentina led to a reliance on foreign capital to offset the resulting low savings rate. From the 1930s onwards, the accumulation of capital was hampered by the relatively high prices of (mostly imported) capital goods, which was caused by the industrial policy of import substitution, in contrast with the export-led growth favored by countries like Canada. Other distorting factors behind the high relative prices of capital goods include the multiple exchange rates, the black market for foreign currencies, the depreciation of the national currency and high customs tariffs. This resulted in a lower capital intensity, which led to lower rates of labor productivity.
So, in few words, they self destructed.
wy69
Inflation - I read a story about the inflation rate there. You buy a car and then twenty years or so, a men’s tie cost the same amount.
Don’t cry for me, Argentina!
Conclusion: The video serves as a reminder that wealth is not permanent; long-term prosperity requires stable institutions, sound economic management, and the political will to avoid compounding bad policies over generations (28:50).
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This is true of families as well
Peron started the decline.
Interesting info and personally of interest because my German grand uncle and/or my grandfather went to Argentina around 1920 to 1923 from Danzig to investigate moving there. They both moved to the NYC area with their young families. I never heard why they chose the USA over Argentina.
Cuba was once the jewel of the Caribbean - what happen to them was communism. Communism is the most perfect cause and effect... failure and misery are what happens to every country that drinks Karl Marx poison.
Other countries? Can be a mix or many causes...
Great video. Hopefully Milai can continue turning the economy around!
The recipe for national failure is almost always the same. Nobody ever learns.
People have memories, nations, institutions and companies do not. The cycle just repeats when the people and their memories die. There is no such thing as institutional learning.
Among the various nationalities that make up Latin America, Argentines are the most universally disliked. I have no idea why. I have friends and relatives who are Mexican, Colombian and Puerto Rican and they all agree.
All the Italians moved in.
All the Nazis died of old age.
Wasn’t Venezuela also one of the richest countries and then they gave it all away when the people thought Socialism was better? Much like the battle the US is now facing?