Real Wages and Relative Factor Prices in the Third World 1820-1940: Latin America

By 1914, there were huge economic gaps between the Southern Cone plus Cuba and the rest of Latin America. When did the gaps appear? Can they be explained by the varying ability of these countries to exploit the first great globalization boom after about 1870? Or did the gaps appear much earlier, and were they established by different experience with colonialism, war and civil war, or perhaps by geographic isolation? And what about the gaps between Latin America and the Mediterranean Basin, let alone with industrial leaders like Britain? Which countries in Latin America started catching up after mid-century, which fell further behind, and which held their own? What role did globalization and demographic forces, including immigration, play in the process? Conventional quantitative evidence, like current GDP estimates, is much too incomplete to confront these central questions, especially as they apply to the previous century. In an effort to suggest a new research agenda for the region, this essay uses a new data base on real wages and relative factor prices for seven major Latin American regions -- Argentina, Brazil (Southeast and Northeast), Colombia, Cuba, Mexico and Uruguay -- as well as for the three Mediterranean regions which were a source of so many of Latin America's immigrants -- Portugal, Spain and Italy. These ten regions, plus comparative information from Britain and the United States, form the data base for the paper.