15 - The River Plate Republics from Independence to the Paraguayan War

Summary

Argentina became independent in the second decade of the nineteenth century with few of the assets considered essential in a Latin American state. It had minerals but no mines, land but little labour, commerce but few commodities. The economy of Buenos Aires emerged from its colonial past not as a primary producer but as a pure entrepôt. The merchants of Buenos Aires made their profits not by exporting the products of the country but by importing consumer goods for a market stretching from the Atlantic to the Andes, in exchange for precious metals which had been produced or earned in Potosí. The city's rural hinterland was little developed. At the time of independence pastoral products accounted for only 20 per cent of the total exports of Buenos Aires; the other 80 per cent was silver. Until about 1815–20 land exploitation continued to be a secondary activity, and cattle estates were few in number and small in size. As for agriculture, it was confined to a few farms on the outskirts of towns, producing barely enough for the urban market.

Independence altered this primitive economy. First, the merchants of Buenos Aires were squeezed out by foreigners. With their superior resources, their capital, shipping and contacts in Europe, the British took over the entrepreneurial role previously filled by Spaniards. Unable to compete with the newcomers, local businessmen sought outlets in land and cattle. Then the province of Buenos Aires, hitherto a poor neighbour of richer cattle areas, profited from the misfortunes of its rivals.