A Modern Latin American Hero

Frankly, I dreaded picking up this book. A weighty post-mortem on a Latin American economist who achieved iconic status in international relations by developing several “theories of development” did not much appeal. I am a slow, and thus necessarily a selective, reader.

It is a tribute to the author, Canadian scholar of Latin America Edgar J. Dosman, that not only is he the first anywhere to produce an in-depth biography of Raúl Prebisch, but also that he has managed, through it, to tell many different stories: of the charmed early years of Argentina and then its vertiginous decline as of the mid 20th century; of the development of autonomous economic thinking in Argentina in the 1920s; of the complex and often antagonistic relationship between Washington and Latin American capitals throughout the 20th century; of the emergence mid-century of international economic institutions; and of some heady years when it seemed briefly that the United Nations might make a difference to economic policy globally.

That we need to ask in Canada who Raúl Prebisch was shows how distant our country remains from Latin America. Prebisch headlined for Latin America on the global stage during the 1950s and ’60s while sundry dictators and corrupt populists hogged the action at home. Prebisch had ideas, economic ideas, which for a time created great enthusiasm in Latin America and internationally. His was the admired face of Latin America. That he too often collaborated with, indeed fronted for, military coupsters and worse in his own country would have seemed to him a small-minded concern. (Dosman gives him no quarter on this score and some others.)

Prebisch grew up as a middle-class provincial whose prominent cousins in the big city, Buenos Aires (then, as now, an exciting and often ravishing metropolis), would not give him the time of day—even when he rose high. His formal higher education was a mess: even though he worked hard and long at university, he graduated only with a degree in accounting.

He was shy, gauche, introverted and not particularly handsome. He read a lot and hardly went out in society. It was only when he discovered what the friendship or admiration of the great and the good could mean that he attached himself to a succession of patrons, many of them barons of Argentina’s world-famous beef biz. Agriculture was the backbone of Argentina’s success, and of its elite. Prebisch’s early economic inquiries and writings were heavily weighted toward it.

The best part of the book for a non-specialist relates to Prebisch’s youth and to the Argentina of the early 20th century. In the 1920s and ’30s, Argentina was—believe it or not—one of the richest countries in the world. This prosperity was achieved through a combination of benign neglect by government and the ready availability of sources of wealth, notably grain and cattle. For Argentina in that era, peer countries were few: Canada (curiously omitted from the book’s index although mentioned quite often), Australia (the destination of Prebisch’s first international travels and field research) and New Zealand. Prebisch attempted to convince Argentinean politicians that Buenos Aires needed stronger institutions, such as those being developed in Ottawa, Winnipeg (the Wheat Board) and Canberra, to sustain its success.

He was eventually asked to develop a concept for, and then appointed to lead, Argentina’s central bank. This was the one great success of his life, soon enough undermined by the dysfunctional politics and the populist fevers that were to bring Argentina ever lower throughout the century. Its economic performance today is a shadow of what it achieved a century ago.

After an extended period out of office, Prebisch reinvented himself and became internationally famous in 1947 by launching, in Havana, a manifesto for the continent, The Economic Development of Latin America and Its Principal Problems, which introduced radically new thinking on how countries of the South could chart their own course. Referring to a “centre-periphery” dynamic, he argued that developing countries were systematically disadvantaged in their trading intercourse with the industrialized world, due to business cycle vulnerabilities and a decline in the “terms of trade”—agricultural produce increasingly being valued less highly than industrial goods. Building on this diagnosis, Prebisch’s prescription, in part, was one of “import substitution,” allowing indigenous industry to develop alongside the hitherto dominant agricultural sector through trade barriers and other means.

These ideas were to underpin Prebisch’s leadership of the UN’s nascent Economic Commission for Latin America and, later, of the UN Conference on Trade and Development.

Nevertheless, free trade, always touted by the United States as the recipe for prosperity (although not always practised by it) emerged as a dominant goal of the post–Second World War international economic system, swamping Prebisch’s views. Theories of self-sufficiency became distinctly unfashionable although in these days of economic crisis and anxiety they will doubtless re-emerge.

Like most high achievers, Prebisch was a complex personality. Although initially reliant on powerful mentors, he “could not stand a boss.” Solitary, even monkish, when young, he later developed a love of—indeed a reliance on—company. Eventually he acquired simultaneously not one family but two, in a bizarre repetition of his father’s double life—which he had greatly resented as a child. Both of his wives seem to have accepted the situation faut de mieux. Dosman hints at a libido suddenly unbridled in middle age, after Prebisch’s Havana conference triumph, but we learn nothing of the specifics: this is, after all, an academic tome.

In Dosman’s even-handed account, Prebisch comes off as self-regarding, self-indulgent and occasionally self-deluding, although an exceptionally hard worker. He was blind to inconvenient truths, for example preferring to believe that military dictators could be a useful antidote to disastrous civilian politicians. He failed to understand that the cycle of instability that military rule fed (not to mention its vicious approach to repressing dissent) could lead, as it did in Argentina, to opportunism, populism, wider violence and economic catastrophe.

In his later years, he was a model of professional irresponsibility, ignoring the leadership demands of his think tank in Santiago while cadging such more lucrative jobs as he could find in Washington and New York in order to look after his younger family. Leading intellectuals—dare one venture the thought—are not always frantically attractive close up.

So why is Prebisch remembered in Latin America as a hero? Dosman makes a strong case that what he provided to the region was a sense of self-confidence in the face of dominant ideologies of the North. And for Latin America, subjected constantly by the United States to the Monroe doctrine in its many guises, this was tremendously hopeful and important.

That a Canadian author should be the first to write a comprehensive intellectual and personal biography of one of Latin America’s few widely hailed figures of the 20th century is quite remarkable. When the book appears in Spanish in 2010, it will attract attention on the continent (as it did globally through a recent review in The Economist).

Dosman was the first leader of the Canadian Foundation for the Americas (FOCAL), an independent think tank dedicated to strengthening Canadian relations with Latin America and the Caribbean, which emerged in 1990 at a time when, in a welcome burst of enthusiasm, the Canadian government decided to join the Organization of American States. Since then, alas, interest in that region has ebbed and flowed in Ottawa’s priorities, although it is high just now.

While the Asia Pacific Foundation in Vancouver several years ago secured a generous endowment from Ottawa through the intercession of powerful British Columbia–based patrons, allowing it to craft ambitious goals, the Ottawa-based FOCAL has been largely ignored by successive governments. Is it not time for FOCAL or another such organization to be supported generously enough to be fully effective, as is Washington’s high-powered Inter-American Dialogue?

Were Ottawa, over several decades, to prove capable of living up to its repeated statements of intent with respect to sustained focus on Latin America and the Caribbean, our country might matter more to the region than it has over the past 50 years, notwithstanding occasional brief accesses of euphoria in key bilateral relationships.

Prebisch, who studied and admired Canadian economic arrangements (particularly in the agricultural field) in the 1920s, would be delighted.