The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor (W W Norton & Company; 1998)

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(^316) THE WEALTH AND POVERTY OF NATIONS
An internal proletariat composed of escaped slaves from Brazil, mestizo
deserters, and other shirdess marginals (gente perdida) squatted in huts
and shacks on the outskirts, living on the leavings, taking catde and
horses as needed from the wild herds around (but why not—were
these anyone's property?). Missing were craftsmen, tools, and industry
(in both senses)—the kind of virtue that could pick up the slack as the
mines played out. In colonial Buenos Aires a horseshoe cost several
times the price of a horse; not surprising: the horses outnumbered the
shoes. Nails were scarce throughout the Spanish empire, and wagons
were held together by rawhide. People rich enough to own European
clothing put it on only for special occasions and presumably hid it in
between.^9 (More than three hundred years later, during World War II,
things had not changed. Manufactures still had to be imported; man­
ufacturers as well; and local industry got its biggest boost not from
growth of home demand, but from wartime interference with sup­
plies.)
In colonial times, Spanish policy aimed to truncate Argentine com­
merce. For reasons of control and taxation, the empire banned export
of silver from Buenos Aires and tried to get all shipments out of Potosi
to follow the Andean-Pacific route (over the mountains and down to
the Pacific, up the west coast to the Isthmus of Panama, across to the
Caribbean and on to Europe). With only partial success. Argentina's
northern provinces supplied food, livestock, raw cotton, and homespun
to what became for a while one of the largest cities in the Americas
(160,000 people at the start of the seventeenth century), altitude
15,843 gasping feet; while the silver earned thereby paid in the Atlantic
ports for iron, weapons, clothing, and other European manufactures.
Needless to say, the inflated value of this contraband invited all man­
ner of corruption; it also encouraged Spanish officials and proprietors
to squeeze the Indian population to the last drop of sweat. So much
for good intentions to protect the natives.
The break with Spain (1816) and fragmentation of the old Spanish
empire brought an end to this trade. But the natural gifts of the Ar­
gentine remained: a wide range of climates, including a temperate core;
treeless, open grasslands (the pampas), excellent for raising catde and
sheep; good soil for cereals; some places suited to semitropical crops
such as cotton and sugar. The country had few industrial resources,
however—no iron, coal, timber, petroleum, or minerals to speak of.
Such waterpower as there was, along the eastern side of the cordillera,
lay far from trade routes and traders. Of manufacturing, litde, and most
of that the remnants of domestic industry. Almost all such work fell to

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