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British Investment in Argentina and Long Swings, 1880–1914

Published online by Cambridge University Press:  11 May 2010

A. G. Ford
A. G. Ford
Affiliation:
University of Warwick
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Extract

British investment in Argentina in the period 1880–1914 amounted to some 8 percent of total British overseas investment; it exhibited long swings which were roughly similar to long swings in total British overseas investment but opposite to British domestic investment, although the bursts of lending to Argentina were particularly concentrated. These swings have attracted the attention of economists and some (notably Brinley Thomas) have pointed out that emigration from Europe to North America and American investment in construction and transportation and other series in the American economy exhibited 18–20 year swings similar to those in British overseas investment, and that these were all in opposite phase to swings in British home investment and the building cycle in Britain. They have then gone on to explain these inverse British patterns in terms of emigration and the growth rhythm of the Atlantic economy, with heavy stress being laid on North American effects. The analysis of movements of both labor and capital can then be conducted in terms of the varying intensities of the pull of opportunities at home and abroad, and the push of home conditions and prospects, and how these interacted with each other to produce these inverse patterns.

Type
Articles
Information
The Journal of Economic History , Volume 31 , Issue 3 , September 1971 , pp. 650 - 663
Copyright
Copyright © The Economic History Association 1971

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References

I am grateful to Dr. S. K. Nath for comments on an earlier version of this paper.

1 Issues on the London Stock Exchange for Argentina were 8 percent of total overseas “calls” and it is assumed that this proportion could be applied to total overseas investment, a principal vehicle of which was overseas issues.

2 See for example, Cairncross, A. K., Home and Foreign Investment 1870–1913 (Cambridge: The University Press, 1953)Google Scholar; Thomas, Brinley, Migration and Economic Growth (Cambridge: The University Press, 1954)Google Scholar and “The Historical Record of International Capital Movements to 1913,” in Adler, J. H., Capital Movements and Economic Development (London: MacMillan, 1967)CrossRefGoogle Scholar, and “Migration and International Investment,” in Thomas, Brinley, editor, The Economics of International Migration (London: MacMillan, 1958)CrossRefGoogle Scholar; Abramovitz, M., “The Passing of the Kuznets' Cycle,” Economica, XXXV (1968), pp. 349–67CrossRefGoogle Scholar; Lewis, J. Parry, Building Cycles and Britain's Growth (London: MacMillan, 1965).Google Scholar

3 Wilkinson, M., “Evidences of Long Swings in the Growth of Swedish Population and Related Economic Variables, 1860–1935,” The Journal of Economic History, XXVII (Mar. 1967), 17–38.CrossRefGoogle Scholar

4 Kelley, Allen C., “International Migration and Economic Growth: Australia, 1865–1935,” The Journal of Economic History, XXV (Sept. 1965), 333–54.CrossRefGoogle Scholar

5 Similar conclusions follow if just P and I are used as explanatory variables:

Comparison of these with (la) and (2a) make it clear that the introduction of I alone has virtually no explanatory power for the longer period.

7 The underlying capital stock-adjustment view, bears some resemblances to that suggested and tested for the ‘adolescent’ and ‘maturity’ phases of investment in American railroads. See Kmenta, J. and Williamson, J. G., “Determinants of Investment Behavior: U. S. Railroads, 1872–1941,” Review of Economics and Statistics, XLVIII (1966), pp. 172–81.CrossRefGoogle Scholar

8 No estimates of export prices are available for the whole period to deflate export values, but because of the method of compilation of export values with fixed valuations for. certain commodities, they present.more of a fixed price picture than might be thought of at first. Export values also were relevant for import purchases which also had to be carried by rail.

9 See Kelley, Allen C., “International Migration and Economic Growth: Australia, 1865–1935,” The Journal of Economic History, XXV (Sept. 1965), 334–35.Google Scholar