The Life and Times of Raúl Prebisch, 1901-1986

The Life and Times of Raúl Prebisch, 1901-1986

Copyright Date: 2008
Pages: 624
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  • Book Info
    The Life and Times of Raúl Prebisch, 1901-1986
    Book Description:

    A wunderkind, Prebisch occupied key positions at the Argentine ministry of finance in his twenties and was the general manager of the Argentine Central Bank before forty. Exiled by Juan Perón after World War II, he became arguably the most influential Latin American official at the UN, heading such international organizations as the Economic Commission for Latin America and the United Nations Conference on Trade and Development.

    eISBN: 978-0-7735-7464-9
    Subjects: Business

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Acknowledgments
    (pp. ix-xi)
  4. Illustrations
    (pp. xii-2)
  5. Introduction
    (pp. 3-6)

    I met Raúl Prebisch in 1978 and was determined to explore this most unusual figure among twentieth century personalities. His working life as economist spanned most of the twentieth century and the assessments of the man have tended to extremes: supporters have revered him and critics vilified him in equal measure. In part this book is a response to the strength of his personality; in part also to the challenges he faced in the political turmoil of his home country Argentina, Cold War Latin America, and North-South relations.The Life and Times of Raúl Prebisch, which traces Prebisch’s development from...

  6. 1 Childhood: The Dreams of Tucumán
    (pp. 7-20)

    Buenos Aires was “something fantastic,” Raúl Prebisch marvelled after his first stroll through the capital.¹ He was seventeen and had lived a sheltered life in the distant interior of Argentina without a sip of wine or a cigarette or holidays on the Atlantic coast. The train pulled into the station at noon on his birthday, 17 April 1918, surely an auspicious beginning for his new life as a university student in the national capital. Having only imagined the great city from boyhood in the far-off Andean mountains, he hoped the reality would equal these dreams.

    From the station Raúl marvelled...

  7. 2 University in Buenos Aires
    (pp. 21-42)

    On his arrival in Buenos Aires Raúl moved in with his widowed Aunt Luisa Uriburu de Garcia, whose old mansion in Belgrano served as the gathering place for the Uriburu-Linares-Prebisch flock in the capital. Her husband, General Teodoro Garcia, had fought with Roca against the Araucanian Indians, and his looming memory in the enormous faux-Moorish house with its large and well-groomed private park set the conservative tone for the large household. Raúl’s uncle, Dr Julio Cornejo, who was a member of the National Congress, also lived in the house and venerated the general’s memory and values, which included a lively...

  8. 3 Apprenticeship
    (pp. 43-61)

    Prebisch turned to Dean Eleodoro Lobos for advice on job openings. A deep international recession following the unwise overproduction and inflation of the first postwar years gripped the Argentine economy just as President Yrigoyen’s term ended. The mood of the country was grim, and employment prospects poor. Lobos, whose dual academic and public policy careers offered a model for Raúl and whetted his appetite, agreed to keep an eye open and recommend him for promising opportunities.

    Raúl could not have found a more effective ally. Lobos was a key interlocutor with the Buenos Aires elite, a former editor of the...

  9. 4 Taste of Power
    (pp. 62-88)

    The Raúl Prebisch of 1928 contrasted visibly with the youth who had arrived in Buenos Aires a decade earlier not knowing how to drink red wine. His lifestyle had matured. In 1925, having changed address eighteen times since his Aunt Luisa’s death in 1920, he had finally left boarding houses behind for an apartment. But as his financial prospects advanced so did his ambition to buy a house of his own, and this symbolic confirmation of personal independence became possible with his major promotion at the National Bank in 1927.

    A year later he moved into an elegant house at...

  10. 5 Central Banker
    (pp. 89-116)

    The Prebischs returned from Europe in late August to the damp and cold of the declining winter season in Buenos Aires, but Raúl was aglow with optimism. He knew, finally, what he wanted – if not yet how to get it.

    Between meetings in London, Prebisch had pondered his dilemma: how could a rational, hard-working bureaucratic elite lead the state? Technocrats like himself had neither wealth nor power – no roots, party, or support – compared with the politicians, who came and went, appointing and dismissing officials with no consideration for ability or the future of the country. They claimed the authority of...

  11. 6 Opening to Washington
    (pp. 117-143)

    So long feared and anticipated, the Polish crisis and actual outbreak of war in Europe were not as traumatic as expected for Argentina. Local interest in Buenos Aires remained focused on the “Match of the Nations” under way at the Teatro Politeama, the much-anticipated international chess final that had brought grandmasters from all over the world to South America, including the now-warring Europeans and the Soviet Union. Despite conflicting nationalisms and recall by governments, the match went ahead anyway, but by its end Polish grandmaster Mieczyslav Najdorf had already lost his country; he took up permanent residence in Argentina as...

  12. 7 The Pearl Harbor Squeeze
    (pp. 144-167)

    Prebisch could not have been surprised with his first task on Monday morning, 8 December, the day after Pearl Harbor. Another run of panic selling on the financial markets had broken out and had to be managed in the pattern that had become almost routine after the two earlier panics in September 1939 and with the fall of France in June 1940. Business reaction on the Buenos Aires Stock Exchange was no different in 1941, with nervous investors selling 93 million pesos for the security of government bonds offered by the Central Bank. With the return of stability the Bank...

  13. 8 The Wilderness
    (pp. 168-187)

    Adelita opened the morning edition ofLa Nacionon 19 October 1943 to a headline announcing the resignation of Raúl Prebisch as general manager of the Central Bank. Breakfast was not yet ready and Raúl was shaving. She ran upstairs immediately. “You didn’t tell me that you had resigned.”¹ Prebisch rarely discussed his work at home, but this was a bit much. Unfortunately it was news to him as well; the new government had fired him without warning. After eight years of power at the centre of the Argentine state, Prebisch faced a sudden and unexpected assault on the institution...

  14. 9 Discovery of Latin America
    (pp. 188-210)

    Disgraced officially in Buenos Aires, Prebisch was received as a visiting dignitary by Bank of Mexico Director-General Eduardo Villaseñor and his Deputy Rodrigo Gomez on his arrival in Mexico City on 5 January 1944. Apart from international conferences, he had not previously met senior Mexican Government officials; they also knew him only by reputation and theAnnual Reportsof the Argentine Central Bank. They would also have invited Adelita had they known Raúl was married. He was taken aback by the warmth of their welcome; even though he was not American or European they accepted him as a leading authority...

  15. 10 Solitary Scholar
    (pp. 211-230)

    Prebisch felt even more isolated after Perón’s election but just as determined to remain in Argentina. Friends abroad worried about his future and offered jobs. Robert Triffin had urged him to work in Guatemala, where “path-breaking reform” was possible, after which the political situation in Cuba might be stable enough to allow them to visit Havana.¹ Leo Welch had now returned to New York. “I have thought of you often in the changing panorama of Argentina these recent months,” he wrote, “especially as I read the developments in connection with the Banco Central, a great institution fashioned under your hand....

  16. 11 Triumph in Havana
    (pp. 231-249)

    The managing director of the IMF had offered – and Prebisch had accepted – a senior position in Washington. But an actual contract had not been signed pending approval by the bank’s executive board; Camille Gutt had dismissed this as a formality, but a disturbing silence from Washington after his visit suggested that Prebisch was being set up for a major humiliation.

    A first sign of internal opposition appeared early, on 23 December, when Gutt cabled with an announcement that the terms of his appointment would have to be changed. “I have reviewed our recent talks with department heads. They feel that...

  17. 12 Claiming ECLA
    (pp. 250-272)

    Before Havana, Prebisch had viewed ECLA as a secondary player in the inter-American game, and he went to Havana as a short-term consultant with one idea only: to present a report that would vindicate the years he had spent elaborating a new approach to Latin American economic development – after which his contract would expire, on 31 July.

    Having experienced Havana, however, he was now convinced that under his leadership ECLA could be transformed into a powerful instrument for channelling the regionalism that his report had provoked. Santiago’s apparent disadvantage of location could be transformed into advantage: the greater the distance...

  18. 13 The Creation of Latin America
    (pp. 273-296)

    Happy the person who has a second chance in life, and ECLA’ s Mexico conference had delivered it to Raúl. The Central Bank – the concept, creation, team, and accomplishment – had been a historic moment for Prebisch. Everything had fit; he was at the centre of the Argentine state leading an administrative elite that provided a firm anchor for the national economy in the turbulent years after the Great Depression. Prebisch’s team of Central Bank professionals was a modernizing elite united behind a coherent vision of national development in which competence was the sole criterion for advancement. The bank was not...

  19. 14 Paradise Lost
    (pp. 297-320)

    Of course Prebisch should not have gone back to Argentina. Malaccorto had lived through the Perón years in Buenos Aires and pleaded with him: the Argentina he had left in 1948 was now, in 1955, a changed country he would hardly recognize and in which he would not be effective. Croire tried to explain the wild ride of the Perón Revolution, which had swept away the old regime, including the Central Bank, without creating a political centre on which to build in the future. Frankel documented the demoralization of the Argentine private sector, and this was in manufacturing, not to...

  20. 15 Return to Santiago
    (pp. 321-349)

    His exile from Argentina reconfirmed, Prebisch settled into Santiago for the long haul. The big house at 134 Rivera Indarte in Buenos Aires was sold; El Maqui, their little weekend dwelling on the Maipo cliff, thirty miles outside Santiago, was now refurbished into a year-round residence – a rambling, hidden house that preserved a cottage-like intimacy. From a centre hall, the left wing of the low-ceilinged cottage housed the bedrooms and his small study; in the drawing room to the right his uncle’s panelled desk comprised an entire wall, facing which deep French windows framed the Maipo Canyon. The family portrait...

  21. 16 The Kennedy Offensive
    (pp. 350-377)

    Prebisch and Latin Americans in general awaited the US presidential elections on 4 November 1960 with anticipation, sensing change. Eisenhower had been the venerated military leader in World War II; Democratic candidate John F. Kennedy heralded the arrival of a new generation should he prevail against the dour Vice-President Richard M. Nixon. He was not much known in Latin America – unlike Nixon, who carried the baggage of April 1958 as an unsympathetic knee-jerk anti-communist cold fish who had defended the destruction of democracy in Guatemala in 1954. (“This is the first instance in history where a Communist government has been...

  22. 17 Global Gamble
    (pp. 378-409)

    Friends in New York doubted that Prebisch wanted to return for good to Santiago. The unravelling of the Alliance for Progress in early 1962 dismayed him all the more because it was, after the Common Market, his second setback in as many years. But Malinowski knew that he was not resigned. On 14 May, after Raúl was finally officially appointed secretarygeneral of ILPES, they walked from the Secretariat up First Avenue to 69th Street and over to Central Park, northward to the Conservatory Garden, where the azaleas, columbines, and peonies were ready to bloom. Prebisch wondered if he always aimed...

  23. 18 The Gospel of don Raúl
    (pp. 410-441)

    After the triumph, the closing of the conference meant packing and farewells. Staff dispersed recounting the bittersweet memories of UNCTAD I. Dell, Malinowski and Cordovez returned to DESA at UN headquarters, Krishnamurti to Bangkok, Pollock to Washington. As yet UNCTAD was only a UN proposal, without a budget or organization, and therefore without personnel. Most of the Prebisch team hoped to return after unctad received General Assembly approval in autumn 1964 as expected, but for now they were going back to the their regular jobs, with some – like Malinowski with Mosak in New York – particularly unhappy. Prebisch would obviously be...

  24. 19 Trials in Washington
    (pp. 442-472)

    Prebisch returned to Santiago, Chile, on 27 November 1968, five days after submitting his resignation to Secretary-General U Thant. The UNCTAD years had aged him; his arthritis had worsened. Ashen, he had fainted twice en route to South America and craved the peace of El Maqui for physical and emotional renewal. But undisturbed in his garden over the Maipo River, Prebisch quickly revived. His arthritis subsided; colour, confidence, and his familiar energy returned. El Maqui was again full of guests, and it was evident that he had no plans for retirement. Within a week he held a press conference denying...

  25. 20 Prophet
    (pp. 473-497)

    The gospel of don Raúl, dormant since New Delhi, became the fashion of 1975: the power of oil brought the New International Economic Order (NIEO) to the top of the global agenda. The South now had bargaining power: small countries had raised oil prices dramatically without retaliation from the industrial powers; for all its military might, the US had lost the war in Vietnam; and Cuban forces had sent the powerful South African Army packing from Angola, back to its apartheid heartland. Diplomacy between East and West had given way, it seemed, to the other chessboard – North-South relations. Action moved...

  26. 21 House of the Spirits
    (pp. 498-502)

    If the practical outcome of Prebisch’s advisory work for Alfonsín was similar to that with Lonardi and Arumburu in 1955–56, his reaction to failure was very different. This time he took his fate as advisor in stride: if disappointed, he was not wounded or depressed and had no intention of leaving Buenos Aires. He moved from the Central Bank to a modest desk in the local offices of ECLA and became a public fixture with his daily long march, head high and shoulders back, between Galileo and Corrientes. There was no bitterness in his relations with Alfonsín, Grinspun, or...

  27. Acronyms
    (pp. 503-506)
  28. Notes
    (pp. 507-554)
  29. Bibliography
    (pp. 555-582)
  30. Index
    (pp. 583-599)