(^326) THE WEALTH AND POVERTY OF NATIONS
fairs."^27 The British built Argentina's railroads—less than 1,000 kilo
meters in 1871, over 12,000 kilometers two decades later—but built
them to British purposes: to move meat and wheat to the ports. Not
to develop internal markets in Argentina, say the locals. But how does
one build such a network without fostering internal markets? And if
not, whose fault? What does that say about the spirit of native enter
prise? The Argentines were not asking such questions. It is always eas
ier to blame the Other. The result: a xenophobic anti-imperialism and
self-defeating sense of wrong.
Withal, nature's bounty made up the difference. Economic growth
continued into the twentieth century, not only in agriculture but also
in the young industrial sector. This took the form of direct investment
by multinationals, particularly in food processing;* and of import sub
stitution, effected largely by small enterprises (most of them owned by
foreigners and many of these, in the 1930s, by Jewish refugees) and
promoted by periods of short supply (as during World War I), a few
protective tariffs, bilateral agreements, and exchange controls.^28
One should not exaggerate this late and stunted industrial sector.
The data in the census of 1914—after twenty-five years, then, of mixed
agriculture and heavy immigration—show that over half the "indus
trial" capital was in mining; a quarter in public services; and only 13.6
percent could be characterized as "basically manufacturing."^29 This
production, necessarily derivative, showed litde invention or adapta
tion. No increasing returns. It throve (survived) in primitive working
conditions that recall the nightmare mills of the early British Industrial
Revolution, but worse because the state didn't care. Nor did the em
ployers, who assumed that casualties could be easily replaced by im
migrant labor. They knew litde of the technology of their own business
and could not be expected to think of improving human capital. A few
enlightened people tried to persuade these primitives that better work
ers and working conditions would be to their own advantage. They
were dismissed as impractical Utopians who knew nothing about fac
tories and industry. The result was industry in a time warp of back
wardness:^30
- Much of this was linked to the demand and tastes of the new immigration, in com
bination with urban growth: city dwellers need processed food. Between 1895 and
1913, the number of food-processing establishments grew by over 20 percent a year,
their workforce by 221 percent, their capital by 8 percent. At the end of the period,
this branch accounted for some 40 percent of all industrial shops, a third of the in
dustrial labor force, 43 percent of all industrial investment—Lewis, Crisis of Argentine
Capitalism, p. 32.