Argentina, Australia and Canada

Louis Proyect lnp3 at
Thu Apr 11 17:51:50 MDT 2002

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

Louis Proyect, lnp3 at on 04/11/2002

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