Exceptional Argentina Di Tella, Glaeser and Llach - Thomas Piketty

CHAPTER SEVEN
A Short Episodic History of Income Distribution in
Argentina
Facundo Alvaredo
Guillermo Cruces
Leonardo Gasparini
1. Introduction
The previous chapter emphasized the role that different sectors, and the capitalists in
those sectors, played in determining trade policies and the resulting income
distribution in Argentina. In this discussion and in the political economy literature,
inequality appears both as a precursor for political change and as a reflection of that
change. This chapter studies the evolution of the distribution of income in Argentina
over a period of seventy-five years. Its starting point is the decade of 1930, when the
country displayed a rather high level of inequality – above other advanced economies.
This high inequality set the stage for the policies of Peron and others, which were
justified – in part – as attempts to make Argentina a less unequal nation.
This chapter deals with the international conditions, the policies and the
macroeconomic performance behind these inequality trends in Argentina over the
20th century. However, any explanation of the dynamics of inequality and growth in
Argentina faces strong limitations in terms of (i) economic theory, (ii) the multitude
of simultaneous confounding factors and (iii) the quality of the statistical evidence
available. Moreover, these limitations are reinforced by the peculiarly complex
history of the country. We have adopted here a historical perspective.
The evolution of income and wealth inequality during the process of development has
attracted enormous attention in the economics literature. 1 From a historical
perspective, this focus was initially concerned with the functional distribution of
income between factors of production. The classical view saw workers, capitalists and
1 There is a longstanding literature on the political economy of inequality along the development
process – see Hirschmann (1973) for a classic analysis, and Robinson (2010) for a recent discussion of
redistributive policies in the Latin American context.