Argentina, Australia and Canada

Warwick Armstrong, "The Social Origins of Industrial Growth: Canada, 
Argentina and Australia, 1870-1930", in "Argentina, Australia and 
Canada: Studies in Comparative Development, 1870-1965", edited by D. 
Platt & Guido di Tella:

Yet, within the general pattern of similarity which gave them their 
distinctiveness, there were also important differences. The key to 
such differences can, again, be identified in the nature of the 
social structures and relationships within the three. This, in turn, 
affected the way in which the economy of each interacted with others 
in the international system of trade and investment. The most obvious 
variation is to be found between Argentina on the one hand, and 
Canada and Australia on the other. In the latter two, the urban 
elements in the ruling coalition were stronger, and earlier assumed a 
dominance over the staples producers. By the 1880s and 1890s, the 
Australian squatters had become, in many cases, subaltern members of 
the coalition, indebted to, and dependent upon, the banking sector 
for their continued viability. The power of Canadian capital, too, 
was concentrated in the financial institutions and commercial 
enterprises of Montreal and Toronto, which exercised a clear economic 
hegemony over the staples producers, and especially over the grain 
farmers of Ontario and the Prairies. This economic weight was 
reflected also in political influence at federal level. In Argentina, 
the dominance of the urban groups was less evident. The landed 
oligarchy continued to wield much greater economic and political 
influence, even after the Radical Party's triumph in 1916, and acted 
as the principal arbiter of social, economic, and political change in 
a way that its Australian equivalent had ceased to do after the late 
nineteenth century. And in any serious confrontations, they could 
call upon the ultimate weapon, the armed forces, which had retained a 
special position in the administrative order ever since the 
nineteenth century. 

One indicator of the relative capacities of the three ruling groups 
may be seen in RAILWAY CONSTRUCTION. The railway networks, central to 
the opening up of the staples-producing prairies of Canada, the 
pampas of Argentina, and the outback of Australia, could be 
considered economic elements of national importance to each country. 
In Canada, the major part of the construction was carried out first 
by private capital, heavily promoted and subsidised by the state. 
Australia's federal government constructed its own system in the 
separate colonies, and later, federal capital remained responsible 
for construction and operation, although, as in Canada, it drew 
heavily upon foreign loans and expertise. Argentina, however, the 
principal lines (and most profitable) were built and run by European 
companies, while the state was left with the task of undertaking the 
peripheral and less profitable sections.

The manufacturing sectors of the three societies reflected also the 
distinct capacity of the ruling coalition to branch out into new and 
innovative activity. In the 1850s Canada was already establishing a 
range of small-scale, manufacturing activities associated with 
agricultural production; these competed successfully with the later 
influx of US branch plants. Similarly, the steel industry of Southern 
Ontario remained essentially a Canadian national enterprise. By the 
First World War, these groups had formed a modern corporate elite, 
part of a powerful managerial structure.

Australia diversified and industrialized later, and possibly more 
slowly, but its manufacturing sector was, if anything, more firmly 
based upon indigenous capital and entrepreneurship. The processing 
industries and small-scale urban manufacturers were joined, after the 
turn of the century, by large-scale corporate enterprises, especially 
in the mining metals sector. As in Canada, enterprises such as BHP 
and Collins House were no longer family-controlled; they were modern, 
twentieth-century industrial conglomerates with vertical control from 
mining to blast furnaces to wire-rope factories to shipping lines - 
and with links to foreign capital through joint ventures. The 
Australian state, like its Canadian counterpart, was concerned 
directly with this phase of large-scale, corporate manufacturing 
expansion. And, in both societies, the work force assumed the 
character of a modern industrial proletariat by contrast with the 
craft workers of the small-scale, urban factories of the past.

It is rather more difficult to find an equivalent evolution taking 
place in Argentina during this period. The possibilities for backward 
linkages into agricultural machinery manufacture did not arise, and 
Australia, in fact, became one of the country's suppliers of such 
products. Staples processing was initiated by Argentine 
entrepreneurs, but fell rapidly into the hands of foreign firms. 
Consumer industries in the big cities were numerous, but the mainly 
immigrant factory owners remained socially, economically, and 
politically marginal within Argentine society. The small, 
labour-intensive, factory sector continued to expand right into the 
1920s, and provided more employment than the foreign-owned and 
larger-scale modern plants. But corporate groupings of larger 
national industries similar to those of Canada and Australia failed 
to emerge. It may be significant that whereas the Australian ruling 
groups, in conjunction with the state, used the years of the First 
World War to restructure and create a new corporate industrialism, 
the Argentine manufacturing community, if anything, suffered from the 
shortages caused by war, as well as from the state's and its own 
inability to adapt and respond to the wartime challenges and 
opportunities.

-- 
Louis Proyect, lnp3@panix.com on 04/11/2002

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