“The things that happened could only have happened during a fiesta. Everything became quite unreal finally and it seemed as though nothing could have any consequences. It seemed out of place to think of consequences during the fiesta.”
— The Sun Also Rises, Ernest Hemingway
We began yesterday’s bitty missive with a simple enough observation: The world, it turns. From light to darkness; day to night; freedom and liberty to control and coercion. Of course, when it comes to day and night, coordinates matter. And when the spreading creep of twilight washes the late afternoon sky of one horizon, the dawn of a new day peers inquisitively over another.
We were thinking about all this on our afternoon stroll through the city yesterday. The old porteños were out in the plazas, sipping their mates by the big iron gates, smoking tobacco and chatting idly amongst themselves. Their faces wore deep creases, choked with years of stillborn promises and hopes long since smothered in the still of night. Salt and pepper whiskers. Unkempt hair, longish below upturned collars. Sunset in Buenos Aires.
This was not always the case. The world has turned.
From the mid-1800s, following the ousting of Juan Manuel de Rosas, through to until the 1930-40s, Argentina thrived as a bastion of relatively free commerce and trade. Spurred by many of the ideas encapsulated in Juan Bautista Alberdi’s Bases for the Political Organization of the Argentine Republic, the South American nation became the envy of its neighbors. Echoing the writings of Jefferson and Madison, Alberdi was an ardent defender of what he saw as unalienable rights, including the rights to earn and own property, without let or hindrance from the state. At the time, his thoughts on the matter were considered revolutionary:
Today we must strive for free immigration, liberty of commerce, railroads, the navigation of our rivers, the tilling of our soil, free enterprise…
Our revolutionary wars sought to establish liberty from outside oppression…what we now need is liberty within…
Our leaders want both glory and liberty, and the two are contradictory…
And so the fruits of these ideas sprung forth. By the turn of the 20th century, Argentina was the 8th most prosperous nation on earth. Only Belgium, Switzerland, Britain and a handful of former English colonies — including the United States — were more favorably positioned, economically. In 1913, Argentina’s bustling, cosmopolitan capital, Buenos Aires, had the thirteenth highest per capita telephone penetration rate in the world. Her per capita income was, around this time, 50% higher than in Italy, almost twice that of Japan and five times greater than its northern neighbor, Brazil. Argentina’s industry churned out quality textiles and frigorificos (refrigerated ships) carried her prized beef from the fertile plains of the pampas to the farthest reaches of the known world.
Argentina rose with the arc of the century…and fell with it too.
Eventually, indifferently, came the long shadows of afternoon, and with them a costly era of protectionist policies at home and increased competition abroad from the post-WWII, export-led economies. The temptation to meddle became too much for the liberty-fed pupils of Alberdi to resist. War, currency debasement, civil unrest, military rule and the usual accelerant of politicians, equal parts corrupt and inept, conspired to stultify Argentina’s vast potential. Almost without a trace, and with precious few really understanding why, the warm glow retreated from the plazas. Then, evening fell.
“I cannot walk through the suburbs in the solitude of the night without thinking that the night pleases us because it suppresses idle details, just as our memory does.” — Jorge Luis Borges.
Even now, standing atop a half century of hard won disaster, of blood and of suffering untold, the Argentine state seems only to grow in its arrogance. Long is this darkness…and long-suffering its good people.
for The Daily Reckoning
Joel Bowman is a contributor to The Daily Reckoning. After completing his degree in media communications and journalism in his home country of Australia, Joel moved to Baltimore to join the Agora Financial team. His keen interest in travel and macroeconomics first took him to New York where he regularly reported from Wall Street, and he now writes from and lives all over the world.
Seriously, when is BB coming back?
The people have spoken!
Soon enough, Harry. Be patient.
Brilliant content, and extremely well written!
If money were what really matters, Warren Buffett would have no peer. He has had unparalleled success in this world; surely he has a first-class ticket to the next. But what if Buffett's 84 years of luck turn on him now? Bill Bonner explores...
A new study out of Sweden will have you thinking twice about making that phone call. The study analyzed cases of glioma, the most common form of brain tumor, in patients diagnosed in the years 1997–2003 and 2007–09. Stephen Petranek has more...
Using Nassim Taleb's five sources of fragility, Charles Hugh Smith ranks the U.S. a 4/5 on the fragility scale. Read on to see what happens when the gum and duct tape holding the economy together breaks down...
Our own Chris Mayer tells Henry Bonner why he sees no big theme in US stocks today -- just hidden opportunities for those who know where to look. Read the interview here...
After swooning in October, semiconductor stocks put in a screaming recovery. And these things went gangbusters in February, blasting past the broad market. All told, semiconductors have posted gains north of 12% over the past six months, while the S&P crept along at 6%.