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A Peripheral Economist at Center Stage Edgar J.

Dosman (2008), The Life and Times of Ral Prebisch, 1901-1986, McGill-Queens University Press. Hardcover: US$69.95. ISBN: 978-0773537750. Ral Prebisch remains one of the least well-known and most controversial figures in the history of economic ideas. In his native Argentina he is still seen as a conservative technocratic economist working for the interests of foreign powers, while abroad, particularly in the United States, when his name is recognized, it is often associated to as the forefather of the Marxist Dependency School. This is in part the result of the complex evolution of politics in Argentina and the world during the 20th century, which makes it very difficult to classify the ideas of an original and multifaceted thinker like Prebisch. It also reflects Prebischs often contradictory positions on policy, particularly in Argentina. But the polar views of Prebischs intellectual contributions also result from the low status reserved by the mainstream of the profession to the field of development economics. No great contribution to economics could come, as far as the mainstream of the profession was concerned, from a field that was seen in the 1930s and 1940s as akin to sub-field of demography or geography. Contrary to what the author suggests, the misinterpretation and negligence with regards to Prebischs contributions are not particular to him, since almost all pioneers of development theory where forgotten by the writers of biographies. Prebischs eclipse after his death was part of the larger neglect of development economics by the mainstream and the rise of the conservative Washington Consensus in policy circles. This biography, masterfully written by Edgar Dosman, who personally met the biographee and worked closely with David Pollock, a direct collaborator of Ral Prebisch, fills the gap, and does for Prebisch what Lord Skidelsky has done for Keynes, i.e. provides the definite account of Prebischs life. *** Prebisch was born in the relatively backward province of Tucumn in 1901, son of a German immigrant and the heir of a distinguished, but increasingly impoverished, family with deep roots in the Spanish colonial elites from Salta, a neighboring province. This was a period in which the Argentinean economy experienced an incredible economic boom, associated with the so-called first period of globalization, and a massive process of immigration, which changed the character of the country. The family had a comfortable, but not luxurious life, and none of the kids learnt to speak German. Ral grew up in a house that was essentially a throwback to the old colonial oligarchy, but the tensions typical of an immigrants household must have existed, pushing him and his siblings to excel, and they did, with one of his brothers becoming the president of the National University of Tucumn, another one of the leading modern architects of the country, and a sister growing up to be an accomplished poetess.

Dosman argues that Ral hated, which is quite a strong statement, but very likely not an exaggeration, the sugar barons of Tucumn, which ruled over the province as feudal lords, maintaining one of the worst labor standards in the whole country. Note that many of the sugar producers, which were an incipient and nascent industry with refineries and the manufacture of other sub-products, were highly protectionist. The conflict between Prebischs later views on the need of industrialization in Latin America and his constant reminder that protectionism should not be at the service of the profits of inefficient and exploitative local oligarchies, might well be associated to his profound knowledge of the sugar industry in Tucumn.* Arriving in Buenos Aires in 1918 to study economics at the Universidad de Buenos Aires (UBA), just before the University Reform movement which bolstered autonomy, student participation and new curricula, Prebisch was fed a regular diet of marginalist authors, both British (Marshall) and Continental (Walras, Pareto, Pantaleoni, etc.). As noted by Dosman, Prebisch failed to find a stimulating academic environment until he moved to the Universidad Nacional de la Plata (UNLP), where he studied and worked with Alejandro Bunge, a pioneer of statistical methods in economics, and entered the social and intellectual circle of Augusto Bunge, a well renowned Socialist. Although his studies included the standard neoclassical readings, as well as classical authors, in particular Ricardo, and Marx, Prebischs theoretical outlook as a young economist should probably described as eclectic. It is important to note that while it is true, as Dosman notes, that the economics department was dominated by the notion of comparative advantage (p. 25), it is dangerous to suggest that this reflected the dominance of the classical political economy imported from England. In particular, the emphasis on comparative advantage and its development from Ricardo and Stuart Mill to Marshall tends to suggest a false continuity between classical political economy and marginalism or neoclassical economics. As would be clear in retrospect, the formative years of Prebisch would also be the so-called Years of High Theory, in Shackles apt expression, in which Sraffa and Keynes, among others, would change and eventually fail to revolutionize the mainstream of the profession. Prebischs eclecticism would be essential to allow him to be one of the economists trying to revolutionize economic theory, albeit from the more distant and less influential periphery of the capitalist system. While very detailed and competent in the description of Prebischs family background and formative intellectual period, Dosmans book fails to put his early years within the broader context of the failure of economic theory that would be so resounding by the time of the Great Depression that it would lead to a need to rethink its basic tenets. Also, the broader context of Argentinean economic development, which was central for Prebischs intellectual development, and the increasing limits to the commodity export model that was the basis of Argentine growth are not systematically discussed in the book. In
*

The classic book on the early industrial development of Argentina, by Adolfo Dorfman, who would eventually work with Prebisch in Chile, was also highly critical of the excessive protectionism received by sugar producers in Tucumn. See Dorfman, Histria de la Indstria Argentina, Buenos Aires, 1942 (Buenos Aires, Solar-Hachette, 1970).

particular, it is important to understand that while Argentina had by the beginning of World War I an income per capita that was equivalent, and in fact slightly higher, than France and Germany, its economic structure was very different, being completely dependent on exports of commodities, grain and beef, to the United Kingdom. While it is true that Prebisch, in contrast to Keynes who was more critical of the Gold Standard and conventional wisdom throughout the 1920s, was surprised by the intensity of the Great Depression, his relatively eclectic background and his pragmatism were central for his fast and evolving rethinking of economic theory and policy. *** Prebischs rise to political power in economic decision making circles was meteoric. From the Bunge circle, with a brief interlude in the Socialist Party, and his brief work for the Sociedad Rural Argentina, the organization that congregated the oligarchic landowners that dominated Argentine politics where he consolidated a strong relation with Luis Duhau, who would be Finance and Agricultural Minister, he moved fast, with the help of the old boys network to become, at the age of 27, the head of the newly created research division at the Banco Nacin, the main public bank in the country. At the age of 30, right after the military coup of September 6 1930, Prebisch assumed as under-secretary in the Finance Ministry. Even when he left the Finance Ministry he remained a central advisor to Finance Ministers, the most prominent being Federico Pinedo, an Independent Socialist that had moved to the right, which would shape much of the economic policies in Argentina during this period. The worsening of the crisis, aggravated in October of 1931 by the abandonment of the Gold Standard by the United Kingdom, led to the creation, at Prebischs urging, of a Commission for Foreign Exchange Controls, imposing capital controls, to reduce capital flight, and the imposition of an income tax, to increase revenues. The latter, one should note, suggests that Prebisch still held pre-Keynesian views on the depression and the need for fiscal solvency for promoting the recovery. But Prebisch certainly harbored doubts about the effectiveness of the austerity measures imposed by orthodox policy consensus. During his trip to Geneva for the preparations for the World Economic Conference in London in 1933, Prebisch read Keynes articles that would be published as The Means to

See Angus Maddison, The World Economy: A Millennial Perspective , 2001 (Paris, OECD, 2006). Prebisch was, in fact, a distant nephew of the dictator Jos Flix de Uriburu. See Julio Gonzlez del Solar (2006), Conversaciones con Ral Prebisch, Cinta de Moebio, No 24. He also participated actively in the Roca-Runciman Treaty signed by Argentina and Great Britain in 1933, which maintained low tariffs on British goods and gave preferential access to British firms in the foreign exchange market and to British meatpackers in exchange for a minimum export quota from Great Britain. As noted by Fodor and OConnell (1973) this would have negative effects on the development of Argentine industry during the 1930s. See Fodor and OConnell, La Argentina y la Economa Atlntica en la Primera Mitad del Siglo XX, Desarrollo Econmico, 13, pp. 3-65, 1973. In addition, this would color the views of left leaning activists in Argentina, which would from then on see Prebisch as an instrument of British (foreign) Imperialism.

Prosperity and his views changed completely taking a decidedly Keynesian turn. As noted by Dosman (p. 92), one of the measures taken by the Argentine government was an Economic Recovery Plan, which was an expansionist approach similar to Keynes work, which Prebisch had absorbed in London. It is important, however, to note that Prebischs intellectual originality and his peculiar perspective, experiencing the crisis from a commodity export country with relatively high levels of income per capita in the South, implied that he developed his own idiosyncratic point of view, and did more than merely absorb Keynes ideas. In many was as noted by Dosman, Prebisch remaine d ambiguous with respect to Keynes, even though he did write the first guide to Keynesian economics in Spanish in 1947. Prebisch came to the realization that, besides monetary and financial flows, which were conventional in the literature at that time, changes in the conditions that affected export performance could also act as initiating factors of the economic cycle. He introduced export performance as a triggering cause of economic fluctuations in the cycle as he became aware that agricultural prices had been trending down since the middle of the 1920s and that the Great Depression sharply aggravated this contraction. This was way before the development of what eventually became known as the Prebisch-Singer Hypothesis about the declining terms of trade for peripheral countries. Prebisch developed his analysis of the pass-through between export receipts, domestic activity and imports by introducing a concept around 1935 termed the coefficient of expansion or, in better-known terms, the foreign trade multiplier.** Prebisch identified the circulation velocity of money as the other key variable absent from Keyness General Theory multiplier analysis, allowing him to draw a distinction between his approach and that of Keynes. Further he argued that following an increase in income, primary employment would expand but that this would not produce an expansion in secondary employment unless there was another round of new expenditure or unless the circulation velocity of money increased (Prebisch, Obras Completas, 1919-1949, vol. 3, p. 359, Buenos Aires, 1991). Prebisch saw the multiplier effect as being explained by Keynes only for a closed economy with marginal references to the import propensity, with no reference to the circulation velocity of money, and limited mainly in its effects by the savings propensity, which constrains the expansion of economic activity and conspires against the full employment of resources (Ibid, p. 359). Moreover, Prebisch also criticized the multiplier and the associated savingsinvestment process on the basis of their being a timeless representation of capitalist economies (Prebisch, Obras Completas, 1919-1949, vol. 4, p. 277, Buenos Aires, 1993) with little relevance for developing economies. More importantly, from institutional building point of view, during his first period in the Finance Ministry Prebisch pushed for the creation of a central bank, a project that would eventually be approved by 1935, and that would lead to his position as General Manager, and effective head, of the newly created
**

See Prebisch, Obras Completas, 1919-1949, vol. 3, pp. 249-298; 301-310; 335-342; 349-370, (Fundacin Prebisch, Buenos Aires, 1991).

institution, the Banco Central de la Repblica Argentina (BCRA). During the whole period that goes from 1930 to 1943 Prebisch remained close to the circles of power and a prominent figure in the determination of actual economic policy in Argentina. As it is clear from the reading of Dosmans book, Prebisch was not just concerned with short run policy, but he was capable of institutional building, and his policies had wide ranging and long-term effects. The period as the effective head of the Central Bank was prolific, both from an intellectual as well as a policy-making perspective. Prebisch developed his ideas about direct intervention in the economy to not only smooth out the cycle, but more importantly to prolong and expand the boom periods. In the process he used rediscount policies to lean against the wind and used foreign exchange controls as a regular tool, something that would be praised by Robert Triffin in the 1940s, when the latter was one of the main policy advisors to central banks in Latin America as a member of the United States Federal Reserve System. In the period between the recovery in 1933 and the crisis of 1943, Argentina grew at around 3.7% per year, a very healthy rate indeed. However, even though the Central Bank of Argentina was an instrument in the rapid recovery of Argentina in the immediate aftermath of the Great Depression, and that its activities were essentially in line with what would became known as Keynesian policies, going even further and through the exchange controls supporting an incipient import substitution policy, Prebisch and the bank were seen by the nationalist left as instruments of British Imperialism. Ral Scalabrini Ortiz famously argued against the bank and Prebisch, suggesting like Juan B. Justo the leader of the Socialist Party, with whom Prebisch had debated in the 1920s, that only strict adherence to the Gold Standard could preserve the value of money and the real wages of workers. But it was not just the left that was critical of Prebisch and his bank. Right wing leaning forces, which included in some case sympathizers of Fascism, eventually led to a military coup in June 1943, and threw Prebisch under the bus, or as Dosman notes in the political wilderness (p. 167). Celso Furtado, a close collaborator and friend of Prebisch later at the Economic Commission for Latin America and the Caribbean (ECLAC),*** would reminisce in his autobiography that Prebisch refused accept a position in a private bank, because he would provide unfair competitive advantage knowing the portfolios of all private institutions after eight years as the head of the central bank. That would have a significant personal and financial cost to Prebisch, who was

All growth numbers are from Orlando J. Ferreres Dos Siglos de Economa Argentina, 18102010 (Norte y Sur, Buenos Aires, 2010). Regarding industrialization, by 1940, in what became known as the Pinedo Plan, even though as correctly noted by Dosman (p. 124) it was written by Prebisch and his associates, it would be clear that import substitution industrialization was the necessary step for economic development. See also Juan Jos Llach El Plan Pinedo de 1940, su significado histrico, y los origenes de la economa poltica del Peronismo, Desarrollo Econmico, 23, pp, 515-58, 1984. Dosman emphasizes the debate with Justo, and the attacks by Scalabrini in the 1950s, after the fall of the Pern government, and Prebisch return to Argentina. However, it is important to also note the ferocious attacks against the central bank. See for example, Scalabrini Ortiz El Banco Central, (1935, in Yrigoyen y Pern, Lancelot, Buenos Aires, 2009). *** Originally ECLA, without the Caribbean. We will refer at all times to ECLAC for simplicity.

forced to sell his house, and work as an international consultant throughout the rest of the 1940s. Although Dosman never directly connects Prebischs experience during the 1920s to the early 1940s in Argentina with that of Keynes in Britain during roughly the same period, it is clear from the book that he sees Prebisch as a sort of Argentine Keynes. He does tell us at some point that Prebisch was no less daring in Buenos Aires than John Maynard Keynes had been in London (p. 88). This is true, yet it is also central to note that while Keynes remained a sort of Cassandra preaching doom from the sidelines, at least until World-War II, Prebisch had the privilege to be at the center of economic policy making in the periphery. It would be only after he was fired from the central bank that Prebisch would become a sort of preacher for the economic industrialization of the periphery, not exactly from the sidelines, but in the considerably less powerful position of United Nations bureaucrat representing the interest of relatively poor countries. *** During his years in the wilderness Prebisch acted as an international consultant, joining missions to Paraguay, Santo Domingo, Venezuela, and giving lectures in Mexico, while also writing a guide to Keynesian economics his famous Introduccin a Keynes (Mexico, 1947) and developing his own ideas on economic dynamics in his class notes for the lectures at UBA. By now he was in his late 40s, had significant experience managing an economy in a period of crisis, and had achieved intellectual maturity. In more than one way, his transition away from orthodoxy was complete. Dosman emphasizes the ideas developed in Prebischs unpublished manuscript Money and the Rhythm of Economic Activity right after his ousting from the BCRA (p. 217). He also, correctly points out that Prebisch defended industrialization in Argentina, not just as a result of declining terms of trade, but as a necessary outcome of his views on the business cycle. Since cycles in the periphery were essentially resulting from stimuli that were generated in the center, a peripheral economy had to move the dynamic center of the economy inwardly, to reduce the vulnerability to external shocks. Further, this inward development did not imply protectionism or an anti-export bias as Dosman points out, citing Prebisch clear notion that a: policy of autarchy is as absurd as free trade with noxious consequences (p. 181). If there was one area in which Prebisch thinking remained fairly conventional was in his views of inflation, which he often associated to excessive demand, in particular government spending, and forced savings, something that would still be part of his views when he wrote his famous Development Manifesto in 1949. In fact, his criticism of the Peronist government was based on fears of inflation associated with the increase in government spending (p. 217) and the central

See Furtado, A Fantasia Organizada (Paz e Terra, Rio de Janeiro, 1985). For the ideas on the cycle in that unpublished work see also Esteban Prez Caldentey and Matas Vernengo Portrait of the Economist as a Young Man: Ral Prebischs evolving views on the business cycle and money, 1919-1949, CEPAL Review, 108, pp. 7-21, 2012.

banks improper expansion of credit (p. 222). It is not clear that Prebischs views on inflation ever changed, since it would fall to authors like Juan Noyola Vazquez, Osvaldo Sunkel and Celso Furtado, in the 1950s to develop the Structuralist views on inflation. In this context, it is also important to note, together with the limitations of the Pern government, and his differences with Prebisch, even if both supported import substitution, (p. 217) that is not clear that by the end of 1948 the shortlived Peronist prosperity was over (p. 255). In all fairness economic growth between 1946 and 1955 (Perns period) was 4.1% per year, above the previous period, and the reasons for the economic difficulties, including the erosion of the foreign reserves noted by Dosman were complex related to both the inconvertible pound reserves, and not just because they were sunk in the purchase of many worthless foreign companies (Ibid.), and more importa ntly because the United States persisted in an economic boycott refusing essential exports of capital and intermediary goods to Argentina. Finally, although it is clear that the Peronist government had authoritarian tendencies, and did take arbitrary actions, persecuting and firing people like Prebisch that dissented, it is far from clear that Argentina was not democratic. In the sense that at least elections were not fraudulent the country was certainly more democratic than during the so-called Infamous Decade, from the military coup of 1930 to the 1943 one, which also was fraught with persecutions and arbitrary restrictions on individual liberties, and in which Prebisch participated in almost all governments (p. 226). One should avoid manicheistic or simplistic readings of the quarrels between Peronists and anti-Peronists, if one wants to understand the conflicts of interest behind economic policies defended by Prebisch and by Perns administration. When Prebisch was forced to resign from UBA in 1949 the only alternative open to him, one that he had been reluctant to take since he was ousted from the BCRA almost six years before, was to accept a permanent job outside of Argentina. At first the possibility of becoming the Executive Secretary of ECLAC was not high in his agenda, and he preferred an offer from the International Monetary Fund (IMF). But in spite of the offer, opposition from the United States Treasury to his appointment made it impossible to hire him at the IMF. Prebisch accepted a four month position at ECLAC instead and, as they say, the rest is now history. Prebischs main task was to write a report to be presented at ECLACs second meeting in Havana in mid-1950, basically providing the new institutions guidelines for action (p. 240). Dosman relies in Furtados account of the writing of The Economic Development of Latin America and its Principal Problems, which was published in Spanish and Portuguese in 1949 (p. 242). According to Furtado, it was the paper by Hans Singer that provided the spark that led to Prebischs Manifesto and what was later referred to as the Prebisch-Singer

On the US boycott see Carlos Escud El boicot norteamericano a la Argentina en la dcada del 40, in Conflictos y Procesos en la Historia Argentina Contempornea, pp. 253-303 (CEAL, Buenos Aires, 1988).

Hypothesis.**** The first draft of the document, which was more moderate and less militant in the defense of industrialization in the periphery, vanished and the final version of the paper presented in Havana was produced within a few days. There are two important innovations in the Manifesto, which are often overlooked. While it is true, as noted by Dosman, that it challenged the accepted views on comparative advantage, it did so by relying on a geo-political discussion of the change in the hegemonic position between Great Britain and the United States. It was the fact that the new hegemon was also a big producer of commodities that created tensions for an international division of labor that relegated Latin America to exporting primary goods. The beginning of what would be later termed the historical-structural method of analysis is in the Manifesto. Also, the Manifesto suggests that terms of trade tend to be unfavorable to developing countries, because while in the boom wages increase in both the center and the periphery, in the bust they tend to fall in the periphery, but remain relatively protected in the more organized and industrialized labor markets of developed countries in which workers have stronger bargaining power. These two elements, together with the emphasis on purposeful state action, provided the cognitive leap that identified Prebisch as the father of development theory (p. 248). More importantly, I would suggest that they provide the main contribution of Prebisch to economic thinking, in the sense that they hark back to the old and forgotten method of classical political economy, in which the process of accumulation was understood as being too complex for simple formalization, and requiring historical and institutional analysis for its full comprehension. In addition, classical authors saw the process of distribution, as Prebisch also hints in his Manifesto, as conflictive. It is in this sense, that Prebisch eclectic formation, which included the reading of Ricardo and Marx, as much as marginalist authors, left him open to the possibilities of adapting some of the concepts developed by the classical authors, and that he would explore in full in his last book El Capitalismo Perifrico (Buenos Aires, 1981), but also incorporating the developments of the Keynesian Revolution about the role of demand in the determination of output and growth. In this sense, Prebisch and the theory of economic development of which he was a pioneer, is also the result of the so-called Years of High Theory, even if his constant participation in policy making precluded him of writing a coherent theoretical book when he was in his prime intellectually. This is in a sense, the point raised by Carlos Mallorqun, when he suggests that in El Capitalismo Perifrico Prebisch traces back his pre-1949 theoretical

****

Toye and Toye (2003) incorrectly argued that Singer developed the theory first, without noticing that Prebisch had written before about the problem of declining terms of trade, as in fact had Charles Kindleberger. The idea that Prebisch had assumed and that Singer had documented the declining terms of trade (Dosman, p. 244) also misses the point that Prebisch had written in 1933 about the falling agricultural prices (see Obras Completas, vol. 2, pp. 131145, Buenos Aires, 1991). What Furtado suggests is that Singers work provided the political catalyst for a less defensive document. See John Toye and Richard Toye, The Origin and Interpretation of the Prebisch-Singer Thesis, History of Political Economy, 35(3), pp. 437-67, 2003.

development, that was somewhat arrested by the extensive period working for the United Nations. His years as the Secretary General of ECLAC, from 1950 to 1963, were a constant battle for survival, with the United States trying to close ECLAC down after its trial period, and then undermine what was seen as a dangerous development ideology that contradicted American economic interests in the region. Likewise his tenure as the first Secretary General of the United Nations Conference on Trade and Development (UNCTAD), from 1964 to 1969, involved a difficult political task of unifying developing countries on a coherent development agenda. This is probably the best part of Dosmans book, the one in which he feels more at home with the topic, discussing the intricacies of UN political disputes. At ECLAC, as noted by Dosman, the center of economic thinking was in the Development Division led by Celso Furtado, which included the brilliant Marxist economist Juan Noyola Vzquez, the so-called Red Division (p. 322), which Prebisch balanced, according to Dosman, with the more conventional Jorge Ahumada in the Training Division. The Structuralist theory of inflation, which eventually gave a name to the ECLAC theory of development, was effectively developed in that division (Ibid.). The historical-structural method led to a new understanding of the process of development in the region, with masterpiece analyses of Brazilian and Chilean historical development done in now classic books written by Celso Furtado and Anibal Pinto. But by the late 1950s, the era of innovation at ECLAC had passed, and tensions led Furtado, Noyola and others to leave. Prebisch also returned briefly to Argentina to advise the government of the military coup that brought down Pern in 1955, eventually producing the socalled Plan Prebisch, which was essentially an IMF style structural adjustment program, with devaluation and fiscal adjustment to reduce inflation (p. 304). This not only led to the critiques from the nationalist left, like in Arturo Jauretches book that suggested that is was the return of colonialism, but it also puzzled some of his friends at ECLAC, as noted by Furtado. Dosman accepts Prebischs assessment of the situation in 1955 at face value, seeing a major economic crisis, when real GDP growth that year was 7.1%, and for the whole import substitution period (1930-1976) around 3.6%. The notion that Argentina was stagnant or that it was in in the worst crisis of its economic history, as Prebisch argued (p. 303), is not credible, even if balance of payment problems did arise from time to time. Also, one should add, Dosman should be more cautious, and not accept the notion that the 1955 coup implied that Buenos Aires basked in the pleasure of freedom restored without a certain dose of skepticism (p. 299), or that General Lonardi [the short lived dictator] was a new species of military leader no t a

See Mallorqun, The Unfamiliar Ral Prebisch, in Esteban Prez Caldentey and Matas Vernengo (eds.), Ideas, Policies and Economic Development in the Americas (Routledge, London, 2007). See Jauretche Plan Prebisch: Retorno al Coloniaje (Buenos Aires, 1955) and Furtado, op. cit. 1985.

typical power-hungry Latin dictator but rather committed to constitutional government (p. 298). It was indeed a strange commitment to democracy, one that brought down an elected government, even if one with serious limitations, and that proscribed one party from elections for almost two decades. Note that in spite of the delirious cheering (p. 299) of the crowds as a result of the coup, if one is to believe Dosman, all democratic elections, with the exception of the one in 1963, went to candidates supported by Pern, including the election of Arturo Frondizi, the developmentalist politician that had an economic perspective more attuned with ECLACs teachings. The mood in Latin America was changing. The Cuban Revolution, the height of the Cold War, and the Alliance of Progress were in full swing when Prebisch moved to his last major experiment in institution building at UNCTAD, effectively providing an economic discourse for the Non Aligned Movement, the ideas of North-South cooperation and the formation of an organized South pressure group, which is reflected in what Dosman considers UNCTADs meetings main achievement the birth of the G-77 (Group of 77), a group that included the developing countries from Africa, Asia and Latin America. Sidney Dell was the central figure in helping Prebisch draft the main document of the first UNCTAD meeting, Towards a New Trade Policy for Development. As noted by Dosman, the core concept of the Report was the notion of trade gap, which essentially suggests that trade imbalances unfavorable to developing countries would preclude the UN goal of 5% growth of being achieved, and effectively maintained the process of uneven development between North and South (p. 395). According to the Report a 5% growth in the South required an incredible rise of exports at the rate of 6%. But since 1950 developing countries exports had risen at the more modest rate of 2%. These ideas would be developed later by Nicholas Kaldor, and formalized by Anthony Thirlwall, and would become the workhorse of the heterodox models of economic growth, even if Prebischs role in their development is seldom, if ever, noticed. At UNCTAD, as much as at ECLAC, the United States role was one of annihilation, if possible, and obstruction, as a second best, with George Ball, Under Secretary of State, and more prominently with W.W. Rostow, Lyndon Johnsons National Security Advisor, as his btes noires, in the 1964 and 1968 UNCTAD meetings respectively (p. 397). The United States delegation denied the existence of a trade gap, and suggested that the trade concessions proposed by UNCTAD were overestimated, and were an incentive for developing countries to escape from their own responsibilities (Ibid.). Prebischs victory at UNCTAD should not be underestimated, even if one admits that trade imbalances and uneven development are still with us, since it created the conditions for a permanent institution that would counter balance the arguments put forward by the more conventional, and developed country dominated Bretton Woods institutions, the IMF and the World Bank. ***

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The last chapters in Prebischs long and agitated life start with his return to Santiago after his retirement from UNCTAD, and the turbulent economic period between the two oil shocks and the Latin American debt crisis, that would undo a lot of the progress in terms of economic development that had been his life work. He was still capable in his 70s to continue the process of institution building becoming the first editor of the CEPAL Review (CEPAL being the Spanish acronym for ECLAC). He also returned to Argentina to provide assistance to the new and democratically elected government of Ral Alfonsn in 1983. Dosmans biography has the advantage of being sufficiently close to the times of the biographee, which allowed him to know him directly, and interview several people that were close to Prebisch, while at the same time being sufficiently apart in time that a lot of themes that would have been difficult to deal because they involved personal matters by now had lost their immediacy and with that some of their impact. But perhaps because of Dosmans relative proximity to Pollock and Prebisch, it misses the opportunity to provide a deeper understanding of the Prebischs legacy in some respects. For example Prebischs take on the role of technocrats, which according to Dosman is based on Vilfredo Paretos views on the positive role of a technocratic modernizing elite guiding the state with rational policymaking above special interests, are never questioned (p. 41). A more thorough discussion of the effect that this belief in technocratic management had in his participation in conservative governments born of illegitimate military coups, in 1930 and 1955, which often followed liberal policies, in the European sense of economic laissez-faire, which went against the grain of the development ideas that he had so masterfully crafted would have been welcome. A few minor mistakes, like the notion that the posh Recoleta neighborhood of Buenos Aires faces the Atlantic (p. 21), when it is actually the River Plate or that Charles Rist was a Swedish rather than Swiss born French economist (p. 80), or the reference to the presidential residence as the Incue rather than Unzu Palace, suggesting that all presidents since Uriburu (not clear which one, whether Jos Evaristo or his nephew Jos Flix) had lived there, while in fact only Juan Domingo Pern did, (p. 213) are to be found, in the text but do not affect the overall high quality and attention to detail that is a hallmark of the book. This book certainly is the definite account of Prebischs life, and is a welcome addition to the literature, that would hopefully strengthen the increasing literature on Prebischs intellectual and economic policy legacy. The final publishing of the remainder of Prebischs complete works beyond 1949 is the only other essential task ahead. This book allows one to put Prebischs ideas in the context of his personal life. It is there, in his writings defending his ideas and the institutions that he built that his legacy is more influential, since Prebisch seems to have carried Keynes dictum one step forward in his belief that ideas and institutions built around those ideas, more than vested interests, govern the world. Matas Vernengo

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Senior Research Manager Banco Central de la Repblica Argentina

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