How industrialisation became the core of Raúl Prebisch's thought
This paper aims to show how Raúl Prebisch's ideas on industrialisation emerged from his confrontation with the Argentine and Latin American economic situation. This article will be structured in two parts. The first analyses Prebisch's initial support to export-led growth of primary commodities until the Second World War (1935-1939). The second focuses on how he advocated for industrialisation in Argentina and Latin America (1939-1950). From 1935 to 1939, as a Central Banker, Prebisch focused on elaborating counter-cyclical policies that could compensate the shortcomings of the export-led growth model to make it more sustainable. Indeed, after the Great Crisis, Prebisch understood that State intervention could soften cyclical movements and prevent deep crises from happening but he was not trying to change the growth strategy of Argentina, which should remain based on primary exports. During the Second World War, international trade was disrupted. Prebisch realized that as long as Argentina was an agrarian country, it would be hard to achieve stable economic growth. He argued that the country had to consolidate its industrial structure and diversify its export and import markets, particularly within Latin America. Therefore, before consciously talking about development plans, Prebisch started proposing solutions that would become key elements of his future development theory. In 1943, Prebisch was dismissed from the Central Bank and started theorising his experiences. He was also invited around Latin America for monetary advice and seminars. This “discovery” of Latin America made him realise that Argentina shared similar structural problems with the other countries in the region. Prebisch started to talk explicitly about “development plans”, and identified industrialisation as key to achieve stable growth and lessen external dependency in the whole continent. His "Latin American" of 1950 constituted the achievement of this period of thinking.
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Keywords: Prebisch, development, industrialisation
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