The Rise and Fall of Peronist Economics
Perón's administration launched its economic program with advantages that few developing countries ever enjoy. Argentina 1946 was a semiindustrialized society whose productive capacity had been untouched by the recent war. Moreover, it was one of the world's creditor nations. During the war, Argentina sold its agricultural products to the Allies on credit, since they would not part with their precious foreign exchange. Their debt to Argentina was nearly $1.7 billion--an enormous sum in those days. Britain alone owed about $560 million (or slightly more than 140 million pounds). Argentina also was in a favorable position with respect to world trade, for the war had disrupted agriculture all over the world; yet there were millions of hungry people to be fed, and Argentina was one of the great food producers. It was this advantage that Perón intended to exploit, through IAPI, to help pay for rapid industrial growth. Miguel Miranda put it crudely: "If people need to eat, as I believe they do, then they will have to find dollars and bring them here to buy food from us." Peronists were confident that American aid spent to rebuild war-torn Europe would ultimately make Argentina richer.
That confidence seemed well placed for the first few years. Argentina had trade surpluses that totaled more than $6 billion (in constant 1950 dollars). When added to the credit balances owed the country, there was good reason for exhilaration because such wealth opened up great possibilities. To the average Argentine, the country seemed ready to take its place as a major actor in world events. Even Perón was carried away. In April 1947 he boasted confidently to a delegation from the FAA: "This cannot be said in the newspapers but it is the truth: we have the Central Bank full of gold and we don't know where to put any more. The passages are full of piles of gold. We have 2,000 million pesos frozen so as not to increase inflation."1
While that was an exaggeration, it is nevertheless true that Argentina was living through a historic moment. Never before, and