Economic History and Development in Latin America Lecture Series 5 | Latin America in Three World Crises: the Road to Industrialization (1914-1950)

On March 22, 2022, the Institute for International and Area Studies of Tsinghua University (IIAS) invited Professor Lucas Llach from the Department of History and Social Studies at the University of Ditra, Argentina, to deliver the fifth lecture entitled “Latin America in Three World Crises: the Road to Industrialization (1914-1950) ” of Economic History and Development in Latin America lecture series. The lecture was presided over by Yuan Mengqi, a postdoctoral researcher at the IIAS.

At the beginning, Professor Llach briefly introduced the teaching ideas of this lecture. Firstly, he led the audience to look back the Latin America’s export-led economic model from 1850 to 1914. During this period, the need for rail and infrastructure projects in Latin America led to a surge in foreign direct investment (FDI) and inflow immigrants, which boosted rapid GDP growth in Latin American countries, especially Brazil and those in the Southern Cone. At the same time, he showed how the historical immigrant influx and its influence in Latin American countries different from that in the United States and Australia through charts. Due to the improvement of transportation, Latin American countries, guided by the basic theory of commodity export, vigorously developed export economy which was dominated by grain, frozen meat and oil. But he also raised a question: is this economic model sustainable?

Professor Llach then explained to the audience how export-oriented economy behave in the face of two kinds of economic crises. One crisis was the wars. He analyzed the impact of wars on the economy taking the World War I&II as examples, which led to short supply of made civil goods and labor, rise of commodity prices, and transport interruption. Generally, governments’ response during wartime was to ensure the supply and export of essential goods to external “emerging economies”. The other crisis was the global economic depression. He elaborated the impact of global economic crises taking the Great Depression of the 1930s and the economic crisis of 2018 as examples, which led to a decline in demand, surplus supply of goods and labor and increased deflationary pressure. Governments’ countermeasure at this time was often to raise the flag of protectionism to secure the supply to local demand.

Professor Llach also reviewed the economic history of Latin America in the 1820s, from the era of export-led growth to the World War I. He focused on explaining the outbreak of the World War I between 1914 and 1918 and its economic consequences, including the interruption of imports and partial “import substitution” phenomenon, and the financial crisis taking place in countries that relied on external capital to develop their economies. After the war, commodity prices and terms of trade in global markets became vulnerable and the gold-based monetary system was put to an end. The United States rose sharply as a powerful economy. Finally, Professor Llach discussed the economic history of Latin America from the Great Depression to the World War II, including the problems faced by the region during the Great Depression and its economic impact, and the types of policies adopted by various countries to deal with the Depression.

During the Q&A session, Professor Llach had heated interactions with the audience who raised questions enthusiastically. He patiently and thoroughly answered questions, including the impact and role of the Banco Central de La República Argentina during the Great Depression, the role and measurement of foreign exchange control on the economic development of Latin America and the world, and the relationship between the urbanization level and population structure in Latin America and its economic development. The lecture came to an end in warm applause.

Professor Lucas Llach teaches in the Department of History and Social Studies at the University of Ditra, Argentina and holds a Ph.D. in history from Harvard University. He received his B.S. in economics from the University of Ditra, and his M.S. in history from Harvard University and economics from the University of Ditra. He served as Vice Governor of the Banco Central de La República Argentina from 2016-2018, and Vice Governor of the Banco de la Nación Argentina in 2019, where he was responsible for policy formulation and implementation of financial electronization and informatization across Argentina. His main research areas include economic history, Latin American present and contemporary history, and medieval history. He is the author of a number of books, including Como Sapiens: correr, comer, amar y descansar a la manera de los humanos (Debate, 2020), Macroeconomía argentina (Alfaomeaga, 2006), Entre la equidad y el crecimiento (Siglo XXI, 2004), El ciclo de la ilusión y el desencanto (Ariel, 1998), etc.

Edited by: Xu Shuai
Typeset by: Cheng Yao
Proofread by: Yuan Mengqi