

What happened to Argentina?  - jseliger
http://economix.blogs.nytimes.com/2009/10/06/what-happened-to-argentina/

======
raphar
In my opinion Argentina is cursed more for its lack of direction than a
deficit in education. During the 20th century (and 21th) its has been a common
practice to destroy or undo the previous administration efforts.

Almost every group that had governed Argentina, gained power, rebuilt
everything (laws, institutions, education...) until it got replaced or
defeated.

A century of this, has left the country walking in circles, incapable of
taking advantage of the oportunities that had appeared, and that might had
improved its situation.

Nevertheless I don't lose my hope in my beloved country.

~~~
diego_moita
As a Brazilian I agree because I see it happening here.

But I believe that it is also related to education. Uneducated people are the
ones that elect the most corrupt/incompetent politicians and are the ones that
never understand discussions about policies.

Off-topic: hope you guys get to the Worl Cup ;-)

~~~
diego
Argentina is (and has been) doing better than Brazil by pretty much any
indicator of education, but Brazil has obviously done much better in terms of
economic development.

[http://www.nationmaster.com/country/ar-argentina/edu-
educati...](http://www.nationmaster.com/country/ar-argentina/edu-education)
<http://www.nationmaster.com/country/br-brazil/edu-education>

Argentina's education was world-class for a significant part of the 20th
century and is still pretty good. Unfortunately the article didn't provide any
evidence or citations to back up its hypothesis.

"Uneducated people are the ones that elect the most corrupt/incompetent
politicians and are the ones that never understand discussions about
policies."

For starters, Argentina had many governments that were not elected by the
people. Second, can you prove that educated people always make the choice
that's best for the country? Third, there are abundant counterexamples of
dictatorial countries that did great in terms of their economics and
industrial development.

Like other people said, Argentina's problem is not education but the lack of
coherent policies over the decades.

~~~
diego_moita
> Argentina is (and has been) doing better than Brazil by pretty much any
> indicator of education, but Brazil has obviously done much better in terms
> of economic development

Well, first I never claimed and don't think that we're doing much better than
you guys. Honestly, I am not bragging on anything. Now, I agree that
Argentinian education is better than Brazilian. Your stats show it and I know
it. But put it just like that is simply lying with stats. Argentina has 32
million habitants, Brazil has 180 million. Scale means a lot here; Brazil has
almost six times more people. Similarly, India has a worse education than
Brazil, but produces more knowledge and science simply because it is 5 times
bigger.

> Argentina had many governments that were not elected by the people

I might accept that for a small part of the country's history, the military
dictatorship. It is not valid for the whole period of Peronism and everything
else since the 80's.

> Second, can you prove that educated people always make the choice that's
> best for the country

No I can't. And that's not my point. My point is that, in average, uneducated
people make worst choices than educated people; not that educated people are
infalible.

> Third, there are abundant counterexamples of dictatorial countries that did
> great in terms of their economics and industrial development.

Also not my point. I am not interested in seeing dictatorships working. I want
to see democracies working.

~~~
Daishiman
I would argue that Peronism is in many ways an extension of fascism, since
it's "democratic", but if you wanted to hold your job in the public sector
you'd better show public support for Peronism. Likewise if you were a large
industrialist and didn't want your factory shut down by the government-
controlled unions.

------
tokenadult
This is an important issue to discuss, because the bad economic ideas that
hobbled Argentina's growth (protectionism) are still current in many other
countries.

The graph about percentages of the population in primary schooling is quite
interesting, and goes a long way to explain why Taiwan, poorer than Zambia
within my lifetime, is now much wealthier than most other countries in the
world.

~~~
vitaminj
The idea that protectionism is bad needs to be qualified. Whilst the
successful Asian countries that are cited here (eg. Japan, Korea, Taiwan, etc)
are export-oriented and encouraged trade, they were all quite protectionist
early on. Big companies like Toyota, LG, Hyundai, Samsung were all heavily
subsidised by their governments in the early years, and were aided by other
protectionist measures (such as local content requirements, import tariffs,
etc). In these cases, protectionism served a purpose - which is to protect
local industry until it is globally competitive (ie. infant industry
protection).

Notwithstanding, these protectionist policies don't always work out (eg. see
Indonesia's airplane industry). Furthermore, Korea and Japan have had (and
still have) an extremely difficult time reversing protectionist policies due
to the lobby groups that represent the vested interests of the now successful
companies.

~~~
michaelkeenan
Are there any well-regarded economists who think the infant industry argument
is a good argument?

Mankiw mentions it briefly in _The Principles of Economics_ [1], which if I
recall correctly is the most widely-used economics textbook, saying
"Economists are often skeptical about such claims, largely because the infant-
industry argument is difficult to implement in practice...many economists are
skeptical about the infant-industry argument in principle...Protection is not
necessary for an infant industry to grow."

Paul Krugman spends a few pages on it in _International Economics: Theory and
Policy_ [2], saying "The infant industry argument seems highly plausible, and
in fact it has been persuasive to many governments. Yet economists have
pointed out many pitfalls in the argument, suggesting that it must be used
cautiously.

First, it is not always good to try to move today into the industries that
will have a comparative advantage in the future...Second, protecting
manufacturing does no good unless the protection itself helps make industry
competitive

...

More generally, the fact that it is costly and time-consuming to build up an
industry is not an argument for government intervention unless there is some
domestic market failure. If an industry is supposed to be able to earn high
enough returns for capital, labor, and other factors of production to be worth
developing, then why don't private investors develop the industry without
government help?

...

In practice it is difficult to evaluate which industries really warrant
special treatment, and there are risks that a policy intended to promote
development will end up being captured by special interests."

[1] Mankiw's textbook:
[http://books.google.com/books?id=oRgQ2goeFzwC&pg=PT222&#...](http://books.google.com/books?id=oRgQ2goeFzwC&pg=PT222&lpg=PT222&dq=%22infant+industry%22+economists&source=bl&ots=4p9M-dph-8&sig=65O2mZ_1QIDP25Wiq79Zoc1P00g&hl=en&ei=enfNSpW6K86DkAX_wNT6Aw&sa=X&oi=book_result&ct=result&resnum=8&ved=0CDIQ6AEwBw#v=onepage&q=%22infant%20industry%22%20economists&f=false)

[2] [http://books.google.com/books?id=L5DaCeXtNq0C&pg=PA257&#...</a>

------
ckinnan
A better comparison than Chicago is Argentina's neighbor Chile, which is far
less endowed than Argentina and has been poorer historically. Chile, however,
has pursued market economics since the 1980s and now enjoys a living standard
that is more than twice as high as Argentina.

Indeed, Argentina's per capita income today is just $6,500, despite the
nation's amazing cultural and natural gifts. Argentina is, in fact, highly
literate-- I don't think that explains why it has stumbled.

~~~
joeyo
Market economics? Is that what Pinochet's regime is being called now?

~~~
mediaman
Do you disagree that Chile has developed much more market-oriented economic
policies than Argentina?

If not, what is the point of your comment?

If you do, I'd be interested in your perspective beyond this quip,
particularly your thoughts on the Chicago school's involvement in forming
economic policy there.

------
bokonist
_As the next figure shows, no variable from 1900 better explains success in
2000 than investment in education._

How many other variables did Glasser analyze? And more importantly, how many
variables from 1900 can we even quantify? Education is closely correlated with
a number of other variables - quality of governance, IQ, culture, religion,
level of development, etc. But there is no good way to quantify those
variables for 1900 Argentina. Education may correlate well with growth, simply
because its an excellent proxy for governance/culture/level of development.

~~~
diego
More importantly Argentina's educational level is very good and has been for a
long time. Argentina has five Nobel prize winners (three for science) and
Brazil, for example, has none. The literacy rate in Argentina is 99% and has
been for a long time, and so on. Picking 1900 as a random point to correlate
with GDP in 2000 is arbitrary and meaningless.

It seems like the author picked an arbitrary variable to make a point without
enough subject knowledge or citations to back it up. Just visiting Argentina
would make it glaringly obvious that the education hypothesis doesn't explain
anything.

~~~
michaelkeenan
_> Picking 1900 as a random point to correlate with GDP in 2000 is arbitrary
and meaningless. It seems like the author picked an arbitrary variable to make
a point without enough subject knowledge or citations to back it up._

I think it's unfair to focus on the lack of details in Glaeser's blog post,
when it links to his 52-page paper[1] (which the post is a quick summary of).
In the paper, he writes: "the Buenos Aires data suggests that less than one-
half of the population could both read and write in 1869. By 1895, the next
available data point, the literacy rate had shot up to 72 percent, which still
meant that a substantial portion of the population was unable to either read
or write. It isn’t until 1939 that more than 90 percent of the population in
Buenos Aires is literate."

It appears that he is focused more on the historical conditions of Argentina's
education than on present-day conditions.

[1][http://www.economics.harvard.edu/faculty/glaeser/files/Glaes...](http://www.economics.harvard.edu/faculty/glaeser/files/Glaeser_Campante_argentina_revised.doc)

------
NathanKP
From the article:

 _Long-run national success is built on human capital, both because of the
link between schooling and technology and because of the link between
education and well-functioning democracy._

That is a fairly profound statement when you consider the general state of the
American educational system. I never fail to be amazed at how poorly US
college and university systems are run. They are full of bureaucracy and
little good teaching is done.

~~~
miked
_That is a fairly profound statement when you consider the general state of
the American educational system. I never fail to be amazed at how poorly US
college and university systems are run. They are full of bureaucracy and
little good teaching is done._

I'm an American who's traveled in Europe a fair bit. I've had several
conversations with Greek, Swedish, and Hungarian teachers. All were
universally critical of teaching in their countries, the main thrust being
that it was almost all driven completely by rote. Teaching in greece was so
bad that a large number of families hire outside tutors just to teach things
like English and classical greek and latin.

There's a Chinese institution that publishes a comparison of all the world's
major universities, based on number of paper citations to its faculty. It's
been a while, but US universities held all but 2 positions in the top twenty
(Cambridge and Oxford were the only non-US universities). Research is not the
same as learning, but its probably as good a proxy as we've got.

Two other proxies would be number of Nobel prizes and number of patents
issued. At least in absolute numbers, the US does quite well. Not sure about
the more relevant per capita numbers, though I'm certain Israel would crush in
the patent category.

While I largely agree with your statement in broad terms, it's too sweeping
and doesn't control for things like ethnicity. We will never have great
teaching anywhere until we get rid of the teachers' unions.

~~~
bokonist
_There's a Chinese institution that publishes a comparison of all the world's
major universities, based on number of paper citations to its faculty. It's
been a while, but US universities held all but 2 positions in the top twenty
(Cambridge and Oxford were the only non-US universities). Research is not the
same as learning, but its probably as good a proxy as we've got._

Journal publishing and citations are heavily based on social networks and the
intricacies of the modern grant system. I really wouldn't trust citations to
be a good indicator of research or advancement. A better thing to look at
would be the flow of real world improvements that come out of a universities
research. Unfortunately, there is no systematic measurement of that flow.

~~~
miked
I quite agree, but as you point out we don't have a lot of choices here.
That's the best proxy I can think of.

~~~
johnnybgoode
When the only measure available is hopelessly flawed, the correct approach
isn't to use it; it's to say, "I don't know."

------
confusedcitizen
This is another economist trying to beat the capitalistic drum. Apart from
Peron's protectionist policies (which some call a drive toward self-
sustenance), one shouldn't forget contributing factors like the 1948 exclusion
of Argentina exports from the Marshall Plan by the Truman administration.
Peron might have been mistaken on many counts, but so many things are ignored
behind the veil of apparently protectionist policies, like worker protection
and upliftment, social infrastructure growth, etc.

What a myopic article, so many things are ignored, he's trying to put blinders
on us.

~~~
jseliger
"Apart from Peron's protectionist policies (which some call a drive toward
self-sustenance)"

Trade protection and autarky have long been defended by words like "self-
sustenance," and the like, but such policies have never turned out well: just
ask India and China before they modernized and liberalized their economies.

"Peron might have been mistaken on many counts, but so many things are ignored
behind the veil of apparently protectionist policies, like worker protection
and upliftment, social infrastructure growth, etc."

Maybe: but by virtually every metric, Argentina is now worse off than
countries like Spain and Italy, which have (relatively) liberal economic
policies and relatively high rates of education.

~~~
confusedcitizen
"...just ask India and China before they modernized and liberalized their
economies."

Well, modernization and liberalization of economies have increased the
economic divide in India. It's not that liberal economic policies are wrong,
just that their implementations are always skewed by greedy corporations. A
government's responsibility is not only to cater to cash sinks but also the
people they govern, which especially in India, is the poor majority. Of course
the GDP goes up, there is no question about that. But at what cost?

~~~
randallsquared
Note that "increased the economic divide" sounds bad, but there's no way from
that statement alone to know whether people are better off or worse off, on
the whole. If the "economic divide" was broadened merely by making some people
better off faster than others, as is usually the case in a freer market, then
there's no problem. It's only when people actually get poorer in terms of what
they can do and have that "increasing the economic divide" is a problem, but
that's much less common than nearly everyone getting poorer, which would have
the effect of narrowing the gap by at least some measures.

~~~
confusedcitizen
I agree to what you say, but by economic divide in India, I meant, the rich
get richer, the poor, frankly cannot get any poorer there and are untouched,
maybe even adversely affected by the economic boom.

For the sake of free-market policies and rampant industrialization, people are
displaced without their consent. For example, dams alone have displaced more
than 30 million people in India.

Successive governments like to publicize decreasing poverty figures, which are
constantly rebutted by independent agencies.

A 2007 report by the state-run National Commission for Enterprises in the
Unorganised Sector (NCEUS) found that 77% of Indians, or 836 million people,
lived on less than 20 rupees per day (USD 0.50 nominal, USD 2.0 in PPP), with
most working in "informal labour sector with no job or social security, living
in abject poverty."
[<http://www.reuters.com/article/latestCrisis/idUSDEL218894>]

~~~
randallsquared
_For the sake of free-market policies and rampant industrialization, people
are displaced without their consent._

If people are losing their land without their consent, then the market isn't
free. I guess we're losing the original meaning of "free market", here, which
is just the latest in a list of such redefinitions to suit whatever the
politicians want to do, while saying nice things. The euphemism treadmill
strikes again! :)

------
kiddo
There's a good book that covers this exact topic in much more depth. It's
called "False Economy: A Surprising Economic History of the Word" by Alan
Beattie. If I remember correctly, he focuses on how Argentinian land was owned
by wealthy elites, satisfied with their wealth. In the US, small parcels of
land were handed out to poorer individuals. Thus, the US held a greater
attraction for immigrants. In the US immigrants also migrated inland quickly,
leaving room in the cities for more immigrants to arrive.

Some of the book is available online through google books.

~~~
mediaman
Along the lines of this thesis, Hernando de Soto wrote _The Mystery of
Capital_ which outlines this policy of establishing property rights among the
lower and middle classes rather than just the rich as a necessary policy to
stimulate growth, as property rights enable the holders to make bigger
investments in capital.

He argues that one reason South Korea did so well after the war was that the
US adopted enlightened economic policies with regards to property rights.

------
timothychung
A point on Human Capital: From what I learned, developed countries (and
companies) depends much more on Structural Capital and not Human Capital in
long run.

Human Capital is seen as a risky asset due to its volatility. From a
intellectual capital management perspective, my guess is that Argentina has
not been successful into converting its Human Capital into Structural Capital.

Education is one of the tools of such conversion. With my limited knowledge,
policy and society design are the high level effective tools for the job.

------
forinti
I think the author was looking at too small a window into Argentina. It still
is a pretty decent place to live and it will probably capitalize on Brazil's
new growth spurt. Look at the most populous area, Buenos Aires, which has 1/3
of the population and an HDI of 0.923. It's a first world score.

I think Peron was quite positive, and the author forgets to note that before
him Argentina was controlled by English companies who took the best part of
the profits from the beef industry.

------
brc
I really need to write a script that logs on and comments 'correlation !=
causation'.

Are Argentines poor because they are poorly educated, or are they poorly
educated because they are poor?

~~~
demallien
Ummmm, doesn't the article implicitly address that? If your country is well
educated, wealth _increases_. It's change in wealth that is correlated with
education, not wealth itself. Or to put it another way, I have trouble
imagining how wealth in 2008 can affect education levels in 1900, and I can't
really think of a third variable to arbitrate between the two either, seeing
as they are separated in time...

