The Economy of Argentina: History

Economy & Politics, History

The first Spanish explorers in present-day Argentina found a wide river inhabited by various indigenous tribes. According to one legend, some of the natives gave the settlers some silver trinkets, and the eager explorers optimistically named the river “el Río de la Plata,” or “the River of Silver” (Plate River in English). Unfortunately, there was in reality little silver anywhere near the river, and it would be years before the river lived up to its promising name.

The first settlers to the region that is today Argentina brought cattle with them, and turned them loose on the vast pampas grasslands, which cover much of northern Argentina, parts of Uruguay and a small section of Brazil. The pampas are seas of grass interrupted only by rivers and ponds, and they proved to be ideal for cattle ranching. By 1600, the cattle industry was booming, and the growth of Buenos Aires as an internationally important city can be directly linked to the production of beef and leather. Initially, the cattle were only important for their hides, which were treated and sent to foreign markets to be sold. The meat was considered commercially useless, although the gauchos elevated cooking beef over an open fire into a high art form. Eventually, in the mid nineteenth century, refrigerated trains and ships made Argentine beef an important export as well.

The economy of Argentina also benefitted from its location. Situated on a great natural harbor which connects the Plate River to the ocean, all trade from Paraguay and southern Bolivia had to pass through, and it became an important port. For the first 200 years of Spanish colonial rule in the Americas, trade with Spain had to go through Lima, which was more than a little pointless, because Buenos Aires was closer. Not surprisingly, a booming smuggling trade grew, and the city traded illicitly with England, France and other nations.

Wine is another industry that has a long tradition in Argentina. The fists settlers planted grapes, and began making wine shortly thereafter. Priests that established churches in rural Argentina also planted vineyards in order to assure sacramental wine for services. Later, European immigrants from Italy and Spain sometimes lent their expertise to the wine industry. Grapes grow well in certain areas of Argentina, and vineyards were thriving by the time railroads began connecting the interior of the country with Buenos Aires, and wine soon became an important product, although it was not really exported until the 1990’s.

With the introduction of modern agricultural techniques in the mid nineteenth century, Argentina became an important producer of grains, and it has been ever since. The nation, and Buenos Aires in particular, industrialized in the early twentieth century and there are now many factories there.

To read about Argentina's economy today click here.