Travel Reference
In-Depth Information
Government policy in the 1930s, however, tended to favor the devel-
opment of domestic industry, for such a policy had wide appeal. It
swelled the pride of middle-class nationalists and satisfied the working
class seeking job opportunities in the modern sector. The government
therefore continued with tariff protections and tax rebates for infant
industries. The economics ministry went so far as to intervene in for-
eign exchange transactions in order to facilitate the import of industrial
machinery and raw materials, and the government favored industry with
credit and financial resources through its control of the banking system.
Customs duties on foreign trade still provided the government with 70
percent of its revenues (in the absence of an effective income tax) so that
agricultural exports had a tendency to underwrite industrial expansion.
The military also approved of industrialization because it pro-
vided the resources for national defense. In fact, the state purposely
involved the army and navy in the development process. In the
same vein that General Enrique Mosconi had been instrumental in
developing the production and refining capacity of the Argentine oil
industry, in 1941 the government created Fabricaciones Militares to
produce war supplies and develop related industries. Army admin-
istrators ran the pig iron factory, the arms industry, and an airplane
manufacturing plant. The navy became involved in the shipbuilding
industry and explosives. The only problem was that state enterprises
such as these never resulted in high productivity levels. From the
beginning, they were overstaffed with administrative personnel and
political appointees.
Growth of the Argentine Oil Industry, 1922-1940
Year Total Production YPF Private Companies
1922 0.5 million cubic meters 89% 21%
1925 1.0 66 34
1930 1.4 58 42
1935 2.3 42 58
1940 3.3 61 39
Sources: Solberg, Carl. “Entrepreneurship in Public Enterprise: General Enrique Mosconi
and the Argentine Petroleum Industry.”
BusinessHistoryReview
56, no. 3 (1982): 389;
———.
OilandNationalisminArgentina
(Stanford, Calif.: Stanford University Press,
1979), pp. 174-175.
