Industrialization by substitution of imports is an approach to economic development in which the state seeks to foster domestic industry via polices such as protectionist tariffs (that discourage importing finished goods from industrialized countries in favor of fabricating them locally) and tax and subsidies (designed to direct the profits produced by exports of raw materials to the nascent secondary sector).
It was widespread in Latin America in the middle of last century. In Argentina, from unification in the 1850s if not before, the political economy had been organized along a "modelo agro-exportador", in which the Argentinian countryside produced foodstuffs and raw materials which were then exported, primarily to the United Kingdom, while finished goods were imported (again primarily from the United Kingdom) with the proceeds. During this time, infrastructure and other capital goods were also imports, and things such as railroads often were built and owned by foreign (British) investors. Some local industry did develop, mostly supportive of the agriculture industry (e.g. refrigerators). This was quite profitable for British capital and the Argentinian land-holding bourgeoisie, but unsurprisingly not good for the working classes. This was enabled by liberal economic policies which favoured foreign capital and the domestic landholding oligarchy, and a political system which until around 1916 (when the UCR's Hipólito Yrigoyen gained the presidency) was entirely captured by the oligarchy.
Beginning with Perón after WW2 and mostly up until the last dictatorship (which took power in 1976), successive Argentine governments instead generally adopted an ISI approach, seeking to develop local industry (in part spurred by the fall in trade due to the Great Depression and the UK's decline) and (during the Peronist governments at least) allowing greater rights to workers. This seems to have been generally a much better period than the preceding ones for the working classes in terms of their level of organization, political influence, and share of economic production.
The last dictatorship dismantled this, and began a neoliberal turn that was continued by subsequent governments up until the turn of the millennium at least (I think some amount of protectionism was restored during this millennium but my sources don't continue that far), which seems to have contributed to a deindustrialization and return to an economy based in large part on exports of foodstuffs and raw materials. The CIA attributes to Argentina the top 5 exports (based on dollar value) of soybean meal, corn, soybean oil, wheat, and trucks (this last mostly to other MERCOSUR countries). This neoliberal turn occurred across Latinoamérica (and the world), with privatizations, cuts to social policies, and cuts to tariffs and economic regulations, policies imposed usually coercively by international financial institutions (such as the IMF and World Bank) and firms (transnational banks) with the weapon of these countries' foreign debts (in Argentina at least, a good part of this was made up of loans taken out by private capitalists but whose liabilities were illegitimately assumed by the state during the dictatorship). Argentina nowadays is today one of the most economically unequal countries in the world, and the working classes receive a much smaller share of economic production than they did in, say, 1970.
So, that's some information about ISI.
Some things I'm curious about:
- What did ISI in fact achieve for the periphery countries which pursued it?
- Was ISI beneficial on net during the period it was pursued? (Obviously the neoclassical economic answer is that it cannot be, but come on.)
- Was ISI in Latinoamérica doomed in the 1970's and 1980's due to the broader capitalist crises of the era or could it have endured if not for dictatorships and other metropole-aligned governments?
- What implications does the modern turn (even in many periphery nations, such as Argentina) toward the tertiary sector (a.k.a. services) have for the question of ISI and other developmental policies?
- How can the gains that e.g. the working classes of Argentina achieved during the period of ISI, and lost during the neoliberal period, be regained?
- And of course, what are some good sources to read more about these topics?
- Season 3 of Historia en Podcast, by Lucas Botta, which covered the history of Argentina. Informed my understanding of the modelo agroexportador and the nigh-overt political domination of the state by landholding bourgeoisie prior to the rise of the UCR.
- "Apuntes sobre su Historia y sus Consecuencias" (Notes on its history and its consequences) in El Terrorismo de Estado en la Argentina (State terrorism in Argentina), by Osvaldo Bayer, Atilio A. Boron, and Julio C. Gambina; published by the Instituto Espacia para la Memoria. Provided a good deal of data and information concerning the politico-economic conditions of Argentina and their working classes during the ISI period and afterwards, as well as information about the socialization of private debts under the dictatorship.
- The CIA World Factbook for current economic data concerning Argentina's exports and Gini Index.