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Business History in Latin AmericaThe Experience of Seven Countries$

Carlos Davila and Rory Miller

Print publication date: 1999

Print ISBN-13: 9780853237235

Published to Liverpool Scholarship Online: June 2013

DOI: 10.5949/UPO9781846312700

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Business History in Latin America: an introduction

Business History in Latin America: an introduction

(p.1) Chapter One Business History in Latin America: an introduction
Business History in Latin America

Rory Miller

Liverpool University Press

Abstract and Keywords

This chapter introduces the development of business history in Latin America. It illustrates the effects of political and economic developments on the growth of economic and business history. The factors that help expand the foreign research on business in Latin America are presented. This book reveals some of the problems which research in Latin American business history, even though they also show how several significant themes are emerging in the literature. Some gaps to which greater attention might be paid in the future are suggested. An overview of the chapters included in this book is presented.

Keywords:   business history, Latin America, foreign research, economic history, economic developments

Enormous changes have taken place in the business environment in Latin America during the last quarter of the twentieth century, making the production of a volume of historiographical essays on the state of business history in seven major countries of the region a particularly timely event.1 The process of transformation began in the mid-1970s following the installation of the Pinochet regime in Chile and the introduction of economic policies there which were designed to reduce the role of the state and ameliorate the conditions both for Chilean private business and for foreign direct investment. Elsewhere in Latin America at the same time the pronounced economic role of the state began to come into question, in Argentina, for example, under both the Peronists and the military regime that succeeded them.

Since then a major shift in assumptions has occurred throughout Latin America, stimulated by a number of different factors: the macroeconomic success of Chile in controlling inflation and maintaining strong rates of growth after the 1982/83 crisis when other Latin American economies floundered; the failure of alternative state-led attempts to resolve Latin America's economic problems following the debt crisis of the early 1980s; and the ideological bias against the public sector which became apparent in Great Britain under the Thatcher administration and helped to reinforce the predilections of the United States government and international institutions such as the International Monetary Fund and the World Bank. The result has been what seems at times like a total reversal of the assumptions prevalent when ‘dependency’ theories were at their peak in Latin America during the early 1970s. Policies which stress the removal of barriers to private business and foreign investment are in the ascendant throughout Latin America, while the state is assumed by many to have been a poor manager both of the economy overall and of the thousands of public-sector enterprises which formerly existed but which are now severely diminished in number and significance.

(p.2) The study of business history in Latin America has developed alongside these changes in attitudes, but also in an environment where for thirty years economic and social history have been seen as central to the understanding of present-day problems. Within the subject there has been a growing emphasis on the period from the mid-nineteenth century onwards and, after a time when research on foreign companies predominated, on the growth of domestic business. Very early in the evolution of the subject, in 1965, the leading North American journal in the field, Business History Review, published a special issue devoted to Latin America. What is noticeable about that issue is the prevalence of articles devoted to the colonial period, the major item of interest on post-independence developments being a seminal article by Frank Safford on foreign and national enterprise in nineteenth-century Colombia.2 Twenty years later a second special issue of the same journal on Latin American business history showed how far and in what directions the subject had developed. All the articles now concentrated on the nineteenth and twentieth centuries (though one overlapped into the colonial era), and much greater attention was paid to the range of archival material now available to the business historian. It is noticeable, however, that over half the issue was concerned with the history of foreign business in Latin America. Moreover, the introduction by the Canadian historian, H. V. Nelles, concentrated almost wholly on work in the English language.3 In part this reflected the way the research had developed in the 1970s under the influence of debates over imperialism and dependency, but it also indicated a gulf that was beginning to appear between business historians in the North Atlantic world and those working in Latin America itself.

Fortunately for the subject the gap then began to narrow, and this volume is evidence of the rapprochement. Although there are obvious variations from one country to another, dependent in part upon the local business and intellectual environment of each, the authors here concentrate very largely on business history which utilises sources available in Latin America, considers the evolution of locally owned firms and local entrepreneurs alongside their foreign counterparts, and pays attention to enterprises focused on the internal market as well as those in the export sectors, which formerly dominated the economic historiography of Latin America. As these essays illustrate, since the mid-1980s a much greater consciousness of business history as a specific research area of great interest and relevance has developed in Latin America, initially in Mexico, slightly later in Brazil, Colombia, and Argentina, and most recently in the other three countries considered here. This growth in the subject has been underpinned by panels (p.3) at international conferences and by other attempts, besides those here, to evaluate the state of research in individual countries.4

The development of business history in Latin America

The economic and social history of Latin America since the middle of the nineteenth century provides the essential background to the evolution of business in the region, and the outlines are well-known.5 While debate about the state of the Latin American economies after independence and the potential for autonomous growth has been intense, it is clear that the expansion of exports and foreign investment from the middle of the nineteenth century provoked a wide-ranging transformation of the economic orientation, business institutions, and social structures of the region.6 The growth of demand in Europe and North America for Latin America's exports of foodstuffs and industrial raw materials offered enormous opportunities to those entrepreneurs who controlled vital resources of land and labour. At the same time it highlighted a number of problems: the deficiencies of capital and credit markets in the region; delays in acquiring the information and developing the skills which might have allowed Latin Americans to exert greater influence in markets overseas; difficulties in obtaining and assimilating modern technology; and the incapacity of government at different levels to maximise the advantages that might be gained from access to foreign markets and capital.7 In socio-political terms the (p.4) period around the turn of the century is seen by historians as one of oligarchic domination. In many countries, especially the minor ones, a small group of families with business interests in the export sector, or spheres closely associated with it like banking, gained control of the national state. Elsewhere, as in Colombia or Brazil, national governments were controlled by a shifting alliance of regional oligarchies in which those controlling the areas with greatest access to foreign markets or capital tended to be dominant. Control of the state provided business elites with the means to benefit their personal interests. Their access to tax revenues and foreign loans and their influence over the courts and the forces of order gave them the power to have vital infrastructure built at public expense and to exert greater control over land and labour. Yet the changes induced by the export boom also promoted the rise of elements which would eventually challenge the domination of these elites, in particular the growth of militant labour movements in the cities, export sectors, and transport industries of Latin America, and the development of a strengthening nationalist current which dissident intellectuals transmitted to the middle and working classes in the rapidly expanding urban centres.

Historians see the depression of the 1930s as a central watershed in both the political and economic history of Latin America, although the precursors of the changes which occurred in the decade before the Second World War can be detected much earlier. In almost every major country of Latin America recovery from the crisis depended upon the growth of the internal market and the expansion of manufacturing industry. For a long time little attention was given to the promotion of new export sectors, and foreign direct investment now became dominated by an influx of multinational firms seeking to side-step tariff barriers and other import restrictions in order to maintain their access to growing domestic markets. The state began to play a hugely expanded role, not only with the foundation of central banks and the introduction of a much greater range of policy instruments to manage the economy, but also as an entrepreneur in its own right. Mexico, perhaps, had taken the most significant step in this direction with the expropriation of the foreign-owned oil companies in 1938, although by then there were already public-sector oil companies in several other Latin American countries, most notably Argentina. From the 1940s the expropriation of foreign-owned railways and public utilities as well as the development of basic industries like steel in many countries brought a further enhancement to the business activities of the state; mining, oil, and telecommunications firms were absorbed into the public sector later. This process reached a peak in the early 1970s with wideranging programmes of nationalisation in Peru and Chile and a negotiated transfer of foreign-owned oil concessions in Venezuela. Although nationalists of the left and the right had led the public attacks on the foreign companies, there was widespread acceptance, whatever the regime, of the general principles of an interventionist state and a large public sector, (p.5) particularly in basic industries deemed essential to the process of development. By this point, with radical governments in power in Peru and Chile and physical attacks on leading businessmen in countries like Argentina and Uruguay, the prospects for private business, whether national or foreign, appeared distinctly gloomy.

These developments in the political and economic spheres had a major effect on the growth of economic and business history as disciplines distinct from mainstream history. As several authors in this volume indicate, two waves of theoretical work in particular had an enormous influence on historians. The first was the development of structuralist ideas associated with the United Nations Economic Commission for Latin America (ECLA in English, CEPAL in Spanish) from the 1950s.8 The second was the growth of more radical dependency theories as structuralism and the model of state-led import-substitution industrialisation ran out of steam in the 1960s.9 By now, it seemed, both foreign investment and the deficiencies of the private sector had led Latin American countries into a worse position than ever. Many scholars came to the view that, even when provided with substantial aid by the state, local business elites had proved incapable of developing an autonomous growth process. It was easy therefore to argue either that they lacked basic entrepreneurial and managerial qualities or else that they had simply betrayed national interests and sold out to foreign investors. As for the latter, they were often considered simply to have exploited and drained Latin America of resources through their control of technology, capital, and markets, and their greater bargaining power visà-vis weak Latin American governments (which for much of the first half of the century, of course, had been controlled by the elites whose inadequacy, disloyalty and incompetence seemed all too evident). This dismissal of the private sector reached its apogee perhaps in the work of André Gunder Frank and his disciples.10

(p.6) In some respects this might not have seemed a particularly optimistic scenario for business historians, since there was little reason why anybody should be interested in the evolution of the private sector if it could not contribute to the process of development, yet the amount of research in business history was now expanding rapidly.11 The explanations for this lie in the rapid growth of higher education evident in the numbers of students, universities, and research institutes, the dominant controversies within Latin American history, and the increasing quantity of source material concerning Latin American business which was becoming available both in the developed world and in Latin America itself. As the contents of the 1985 special issue of Business History Review suggest, much of the initial impetus came from the growing quantity of research on foreign firms in Latin America. This in turn was related to the debates over the nature of foreign, especially British, imperialism in Latin America, which intensified in the 1970s as historians found more and more empirical evidence which conflicted with the assumptions of those who advocated theories of informal imperialism and dependency. One of the key figures in stimulating this research, as many have noted, was D. C. M. Platt, Professor of Latin American History at Oxford from 1972. Platt was significant in three ways: first, because in the mid-1960s he identified many business archives in Latin America and in Britain which subsequently proved a fruitful source of primary material; second, because he threw the emphasis on to the analysis of foreign business – host government relations as a key arena for the study of imperialistic behaviour; and third, because of his encouragement of a number of British research students and visiting foreign scholars who began to publish widely from the 1970s.12 However, it was not just Platt who was responsible for the growth in research on foreign business. In the United States a long tradition of research on British and US firms in Latin America already existed, associated particularly with historians like J. Fred Rippy of the University of Chicago. Some of the key North American scholars whose contribution is recognised in the chapters in this volume, such as Frank Safford and Richard Graham, had commenced their research and published articles of significance before Platt's key contributions began to appear.13 (p.7) Another important factor behind the expansion of foreign research on business in Latin America was the growth of travel grants and postgraduate studentships for area studies in both Britain and the United States during the 1960s. In Simon Collier's words, ‘the great American PhD industry’, funded in the case of area studies by federal government grants, was the reason for much of the research undertaken on the economic and business history of Latin America by foreigners.14 In Britain the introduction of ‘Parry’ research studentships following a government report into Latin American studies in the mid-1960s had a parallel, if smaller, impact.

What this volume shows, however, in contrast to the earlier collections of papers on Latin America in Business History Review, is that, while it was undoubtedly important, the contribution of foreigners to the development of business history in Latin America should not be overestimated. One reason for this is the relative narrowness of focus which many of the foreign scholars working on Latin America displayed. They were concerned primarily either with the dominant controversies over imperialism and dependency or with writing company history of a rather traditional kind, rather than with transferring to the study of Latin America some of the major changes which were taking place in business history in the developed world under the influence of historians like Alfred Chandler or Mira Wilkins.15 As a result, it is still not easy for historians to envisage and explain just how the development of business in Latin America was different, in spheres like entrepreneurship, structure and organisation, or innovation, from the parallel processes which were occurring in the United States, Europe, or Japan. Foreign research on business history in Latin America has thus developed largely in isolation from the main currents of the discipline. It is rare, for example, for foreign historians of Latin America to employ terminology like ‘managerial capitalism’, to consider the internal structures and management of firms, or to address some of the major developments in business history such as the concept of the ‘free-standing firm’ or the use of transaction costs theory to explain strategic decision-making and institutional change.16 (p.8) Central theories about entrepreneurship dating from the early twentieth century such as those of Joseph Schumpeter, Max Weber, or Werner Sombart have also largely been absent from the bibliographies of the foreign scholars.

The other reason not to overestimate the foreign contribution to research is the amount of work that was being undertaken within Latin America, even in the 1960s and early 1970s. In many ways this resembled the early stages of business history in the developed world. There were several company histories, some of which, commissioned by the firms involved and undertaken by both amateur and professional historians, illustrate all the pitfalls of this approach.17 As in the early stages in Britain and the United States, too, eulogistic accounts of ‘pioneering entrepreneurs’ were not unknown in Latin America in the 1960s. However, in many countries there was a rather different dimension to the growth of business history compared with Britain or the United States, namely the substantial contribution that was made by sociologists and economists concerned with development problems. For Latin American scholars in both these disciplines the formation, behaviour, and ethos of national elites in the nineteenth and twentieth centuries were a central issue, in line with the preoccupations of both the ECLA and the dependency schools. While very few of these writers carried out archival research, their theoretical contributions did provide a framework within which more empirically minded business historians could operate. Research by Latin American scholars was also stimulated in the 1970s as national and regional archives in many countries became much better organised, employment opportunities in universities and research institutes expanded, and grants became available for research overseas, permitting historians to use the wide range of material available on business in Latin America in the libraries and archives of Europe and the United States. An extremely tragic but ultimately stimulating twist to these developments came with the exile of many Latin American scholars, especially from the Southern Cone countries, as a consequence of the military coups of the 1970s. This was most marked in the case of Chile, where a comparison of the contents of Historia, the leading professional journal in the country itself, and Nueva Historia, a new journal published by a group of exiles in London in the early 1980s, shows how under the dictatorship those historians who remained in Chile turned their attention to uncontroversial themes in colonial history while those in exile concerned themselves with key issues in the country's development, producing several significant contributions to economic and business history.

(p.9) Problems, achievements and prospects

Taken together, the essays in this volume illustrate some of the problems which research in Latin American business history has revealed, but they also show how several important themes are emerging in the literature, and suggest some gaps to which greater attention might be paid in the future. One obvious point, which the number of publications cited in different sections of the bibliography at the end of this book makes clear, is that research has advanced much faster in some countries than others, for institutional, economic and academic reasons. Institutionally, higher education developed in rather different directions in the 1970s in individual Latin American countries, depending on the degree of political freedom that existed and the availability of funds. Not surprisingly perhaps, universities and research institutes in Mexico and Brazil, the two largest economies in the region, had greater financial support from the state and from the private sector, offering therefore, an environment within which a subject which was often considered marginal to history and mainstream social science disciplines could advance more strongly. Of the countries studied here the volume of locally researched studies on Mexican business and the growing sophistication of the literature on Brazil are impressive, in contrast to the occasionally more downhearted tone apparent in some of the other chapters.

The economic environment in Latin America also influenced the development of business history as a result of the role played by the state in different countries. As the essays on Chile and Venezuela show, during the twentieth century the state became the most important business actor in both these economies, first because of its use and allocation of the tax revenues generated by nitrate and copper mining in Chile and oil in Venezuela, and then due to the nationalisation of these key resources. Disdain for the contribution that the private sector might make to the development process in Chile and Venezuela was evident in the lack of attention which historians and social scientists paid to business history and the assumptions of failure on the part of national business elites that prevailed in both. Yet very few historians or economists in these countries turned to studying the evolution, management, and performance of publicsector enterprise as opposed to the macroeconomic aspects of the state's role, and the empirical study of the activities of the foreign multinationals which dominated the export sectors before nationalisation remained largely in the hands of scholars overseas who had greater access to the archives.

A further problem evident in these chapters concerns the definition of the field and the identification of the prime themes within it. The common Spanish-language term historia empresarial, which is normally used to define it, in fact encompasses three different, if overlapping, spheres: business history in a comparative sense; company history in terms of the empirical case-study; and entrepreneurial history, in the sense of the study of individual (p.10) pioneers. The authors in this volume take rather different perspectives on this. Their differing interpretations of the term, and hence their expectations, fundamentally affect their evaluation of the state of business history in the countries they are studying. Some are searching for a broad comparative business history which goes beyond the accumulation of case studies of individual companies in order to address both the themes which have been uppermost in the expansion of the subject in the developed world and to isolate the distinctive features of the evolution of business in Latin America. For others, the accumulation of empirical case studies on individual companies and entrepreneurs and written with a certain degree of professionalism is an achievement in itself. As noted already, this divergence of approaches and expectations is a critical and hotly debated issue amongst business historians elsewhere in the world. The problem in Latin America is that it has enormous implications for the future development of the subject insofar as the technically well-informed case study or comparative work may be much more likely to attract the interest of far-sighted managers, academics in business schools, and the remainder of the historical profession than the narrowly focused narrative, descriptive, and uncontroversial case study which many companies prefer for reasons of public relations. What business historians prefer to do, and what they may be financed to do, in Latin America as in Britain, may be two very different things.

The conceptualisation and definition of the subject is part of a broader problem, namely how the business historian working in Latin America adjusts to the neoliberal world, and the extent to which s/he should shake off the ECLA / dependency heritage that has contributed much to the development of the field but which has also distorted it. Striking the right balance between commitment, theory, and empirical data, and making appropriate use of foreign ideas, has been a difficult problem for thirty years. It is not one confined to business history. Historians of Latin America, whether foreigners or natives of the region, have always had to tread a fine line over the adoption of conceptual advances derived from research in the United States and Europe. While they have undoubtedly enriched the subject, they can also imply the imposition of an agenda which is not always attuned to Latin American realities.18 As Luis Ortega notes towards the end of his chapter on Chile, historians have perhaps been incorrect to expect industry, business, and entrepreneurship to develop in nineteenth-century Chile in the same way as they did in contemporary Europe.19 Greater advances in understanding the distinctive (p.11) features of business culture in Latin America might come from historians who can shake themselves free of some of their preconceptions about the ‘normal’ path of development or about ‘normal’ entrepreneurial and managerial behaviour.

Dwelling on definitional and epistemological problems, however, is almost certainly not the best way to recognise either the achievements of scholars in the past or the possible direction of business history in Latin America in the future. One major advance that does need to be recognised is the discovery and use of a much wider range of source material than might have been expected when research in this area commenced. In the special Latin American issue of Business History Review in 1985, Vera Blinn Reber offered a short but useful analysis of the sources available to business historians, commencing with the type of material to be found in national archives and then going on to discuss provincial and municipal archives, bank archives, notarial registers, private business papers, and repositories for printed sources.20 Looking at the work discussed in the chapters here, there seem to be five principal sources of information which business historians have used.

First, a source which always amazes the foreign newcomer in Latin America is the size and variety of the notarial registers which exist in national and provincial archives. Signing a document before a notary public, a contract for a loan or for the renting, sale, or mortgage of land or property, or else the making of a will, was fundamental to the legal system in all Latin American countries. As a consequence the notarial archives, most of which are in the public domain, contain a vast amount of business information, for example on the formation of partnerships and companies and their financing. The problems in using them lie in their scale and the sheer variety of material they contain. Perhaps for this reason their greatest value in business history has so far probably been most evident at the regional level, where the quantity of registers is much smaller and thus easier to handle than in the national capital.21 However, the use of personal computers and free-text database software ought now to make the days or months spent reading them more productive, making it possible, for example, to track an individual's business transactions more easily over time. Second, the taxation, company registration, and probate records available in national and regional archives have also been a fruitful source of data on the size, income, and operations of firms and individuals. These sources, of course, also lend themselves to computerised analysis using relational database and spreadsheet software. Third, a whole range of business archives have been discovered, belonging to both defunct and (p.12) living companies, not just overseas, where one might expect them to be better preserved, but also in Latin America itself. It is often stated, and such an assertion appears several times in this book, that businessmen in Latin America have no tradition or desire to retain documents from the distant past. That may be true, but it does not mean that nothing has survived. Several of the most important studies reviewed here have utilised long-forgotten archives which were only discovered once the historian began to ask around within a company or governmental office. Often the problems lie in the need for persistence and the disorganisation of the material, rather than its destruction or inaccessibility. Fourth, since the early nineteenth century there has been a flourishing daily and weekly press in Latin America, and in the capital cities specialised business publications, sometimes in English or German, sometimes in Spanish or Portuguese, began to make an appearance in the late nineteenth and early twentieth centuries. In addition to the independent press the commercial and professional organisations that began to appear at the same time also produced their own journals, with the result that the printed material published by Chambers of Commerce, societies representing landowners or industrialists, and associations of engineers and other professionals has become a fundamental source for many business historians. Fifth, a vital source for the more modern period, not mentioned by Reber (whose interests lay primarily in the nineteenth century) but referred to on some occasions in this book, is oral history. At least in some instances, businessmen have been willing to talk to researchers, if not to open their archives, and some important oral history work has also been conducted amongst managers and workers. This is, of course, a fundamental tool for academics in business schools as well as for sociologists and political scientists contributing to the field, but one much less used by historians, who perhaps prefer the impersonality of archives and libraries, than it should be.

It is evident from some of the chapters here, most obviously those on Mexico, Brazil, and Colombia, that some of the most important advances in understanding the evolution of business in Latin America have taken place through research at the regional level. This has depended on the organisation of provincial archives, which has been a significant development for historians of all kinds in many Latin American countries since the 1970s. One important result, evident in all three chapters, has been to dispel the myth that Latin Americans lacked entrepreneurial capacities, an idea that was quite common in the 1970s when it became clear to radical and nationalist historians that ‘national bourgeoisies’ had somehow failed. If one looks for entrepreneurship in the sense of identifying and grasping business opportunities and taking risks, then one can find evidence of it throughout Latin America. Research both on foreign firms and local businessmen and governments has also dispelled another myth of the early 1970s, namely that powerful foreign companies were always able to get their way in Latin America in the way in which Frank and others believed.

(p.13) Rather, the relationship between foreign capital and national interests was, in true post-modernist fashion, a complex one subject to continual contestation and renegotiation, with several cards in the hands of the local players. However, the dispelling of the myths of the early 1970s does not imply that there were no differences between business structures and culture in Latin America and the wealthier nations of the North Atlantic.

For much of Latin America's history after independence both the political and economic environment were uncertain. In economic terms local political disruption and the transmission of commercial and financial crises from Europe as Latin America became more involved in world markets made the nineteenth century a difficult era in which to do business. There were several aspects of political instability which affected business apart from the simple disruption of commerce: the risk of violence and confiscation of property, frequent changes of government policies regarding key sectors of the economy, and later the threat to companies posed, at certain times, by widespread labour unrest. Landowners, of course, always faced the problems of the weather, pests, and diseases, and mine-owners the threat of geological difficulties and flooding as well, while both these groups faced continual uncertainties about prices. In the twentieth century, especially after the 1930s, the problems of inflation, exchange controls, and import restrictions all made life uncertain for the industrialist, even if they provided opportunities for other sectors such as the banks. This seems to have made businessmen in Latin America much more short-term in their strategic thinking than many of their counterparts in more stable economies. Many attempted to preserve a very high degree of liquidity rather than committing themselves to long-term fixed assets in one particular sector. Entrepreneurship had a rather different meaning in Latin America, in the sense that businessmen were often willing to take risks but they generally aimed to preserve a large amount of flexibility so that they could extract themselves easily rather than concentrating their investment in one particular activity. Several of the chapters in this book highlight these issues.

However, it was not only in terms of attitudes that Latin American businessmen differed. There were major contrasts in business institutions between Latin America and the North Atlantic world. Capital markets and managerial capitalism developed much more slowly than in Europe or North America. Founders and owners tried to control their enterprises in person or through a handful of trusted aides. The need for trust also meant that the dominant form of business organisation was not the impersonal limited liability company, but rather the family group. At their peak the most important families in the business elite controlled a whole raft of enterprises in different sectors of the economy. Land or property ownership was vital for status and for access to credit, but the control of local financial institutions, a political role, and a range of interests in commerce, mining, and even industry were also characteristic of the leading groups. Extensive interests in commerce and finance were frequently a means of resourcing (p.14) other ventures. The organisation was linked together not by a formalised management structure but by networks of family and quasi-kin relationships. It is relatively easy for historians to identify the key family groups in individual countries and regions from the mid-nineteenth century to the late twentieth; the much more difficult task has been to explain the nature of decision-making and strategic thinking within them and the reasons for their rise and decline.

Nevertheless, research in business history has uncovered one common feature of the formation of these groups, one which particularly runs through the chapter on Mexico by Mario Cerutti, and that is the importance of commerce as a means both to accumulate the finance and contacts for diversification into other activities and as a way of gaining business experience. Coupled with this was the fact that commerce was one of the easiest areas for the young male immigrant to enter, as it had been in Latin America since the sixteenth century, and in retrospect immigrant communities appear to have been a fundamental source of entrepreneurship. Europeans, particularly German, Italian, Spanish, and Portuguese immigrants, founded many of the most important business groups in Latin America after 1850. However, although they were undoubtedly significant throughout the region, it would be incorrect to argue that European immigrants were the only source of dynamism. Within Latin America itself there was a fair degree of migration from one country to another, and a common language facilitated the entry of the immigrant entrepreneur into business circles in other countries. It is noticeable, for example, that Carlos Dávila's chapter here on Colombia picks out the railway engineer, Francisco Cisneros, and that on Peru the financier, José Payán: both were Cuban by birth. Chinese and Japanese immigrants from Asia and their descendants have also generated important businesses in several Latin American countries where they were taken as indentured workers in the nineteenth and early twentieth centuries. More recently, the descendants of Arab migrants from the Near East, often referred to generically as turcos, have been an important source of new entrants to the business (and indeed political) elites. Detailed research on the business actitivies and networks of many of these communities, however, is often just commencing. Social historians concerned with questions of assimilation have paid much more attention to immigrants than business historians. And, as Colin Lewis makes clear when referring to Minas Gerais in his chapter on Brazil, it may be easy to overestimate the role of immigrants and underestimate sources of entrepreneurship amongst local families, especially away from the coast and the ports. Was it the frequent involvement in commerce or the fact of being a migrant that made such newcomers such an obvious source of business dynamism in Latin America?

For immigrants who accumulated capital through trading activities but who were unable to participate in the formal political system unless naturalised chambers of commerce, established in many Latin American ports (p.15) and cities from the middle of the nineteenth century, were one important means of influencing government decisions regarding business. In many countries such institutions came to play a semi-official role, being commissioned by the state to conduct investigations and reviews of economic policy. Later in the nineteenth century other interest group associations, representing landowners, miners, or industrialists, were also founded. As the chapters in this volume indicate, there have been several histories of associations like these, many of which remain in existence, and while some are narrative and largely uncritical others provide important insights into the relationship between business and the state. Such institutional associations reinforced extended kinship networks as a means of gaining access to those holding power at times of political uncertainty, and their significance within the Latin American political environment has remained marked, under both the military regimes of the 1970s and 1980s and the civilian, often neo-populist, governments which replaced them. Historians have also studied other important institutions which were vital to the training of technical experts and managers, such as schools of engineering, and professional associations of groups like engineers or accountants. As business groups in Latin America become larger, more international in focus, and more accustomed to the absorption and development of new technologies and techniques in order to remain competitive, the formation of cadres of professional managers is of crucial importance, but this process has long historical roots.

Research considering questions such as these is really only just beginning to appear, and there are several other issues which require more consideration by specialised historians of business. Examples that come to mind, at the risk of advancing the agenda based on developments in Europe, include the following. First, the question of the legal environment and the enforcement of contracts is of obvious interest to business historians, especially in view of the growing appeal of the ‘new institutional economics’ associated with scholars such as Douglass North.22 Issues raised by business historians such as Alfred Chandler and Mira Wilkins concerning the structure and organisation of firms might also be addressed, both by historians of foreign business in Latin America, who have only rarely considered explicitly the problems of managing at a distance, but also by historians of local business who have, on the whole, said little about how control and management evolved as family-based enterprises grew in size and function. How many locally owned businesses in Latin America failed adequately to cope with the transition from family management to managerial capitalism? This raises further questions about the characteristic (p.16) life-cycles of family groups and firms in the Latin American environment.23 Questions about the value of information, personal networks, and other intangibles in developing or reorientating business enterprise are also relevant here. Once one begins to think along these lines one confronts a further issue, namely the inter-relationships among firms in Latin America and particularly the connections between banks and other firms. Partly because of the secrecy of bankers, partly because of the technical capabilities the historian needs to acquire, the business history of financial institutions has not been anything like as well-developed in Latin America as that of agricultural, commercial or mining enterprise. There is also a glaring gap in the business history literature regarding the organisation, management and performance of the public-sector companies which have begun to disappear as Latin America has been swept by a wave of privatisation. Many such firms became exceedingly large companies which required professional organisation and management. The formation of this cadre of managers in mid-twentieth century Latin America, however, remains largely unknown, except perhaps for Colombia. Judging from the literature reviewed in the chapters which follow, a further issue which has not received the attention it deserves, whether in the public or private sectors, is industrial relations at the level of the plant or the enterprise, a rather different issue from the institutional histories of trade unions and political action which dominate labour history in Latin America.

At the conclusion of his chapter on Chile Luis Ortega comments that ‘there is a whole history yet to be written’. Even in those countries in Latin America where research in business history has advanced at a greater speed than in Chile, there is no difficulty in finding questions to ask, topics to research, and the printed sources and archives to investigate them. Our hope is that the reviews of the literature and the insights offered here by the authors of the individual chapters may help to stimulate further research, especially at a time when the burden of Latin America's future development has been placed on the competence and competitiveness of private-sector business and the ability of the state to promote and regulate it.


(1) My thanks are due to Carlos Dávila and Colin Lewis for their comments on an earlier draft of this introduction. They are not, of course, responsible for the shortcomings of the final product.

(2) Frank Safford, ‘Foreign and National Enterprise in Nineteenth-Century Colombia’, Business History Review 39 (1965), 503–26.

(3) H. V. Nelles, ‘Latin American Business History since 1965: a view from north of the border’, Business History Review 59 (1985), 543–62.

(4) See, for example, María Inés Barbero, ‘Treinta años de estudios sobre la historia de empresas en la Argentina’, Ciclos 5 (1995), 179–200.

(5) See, for example, Victor Bulmer-Thomas, The Economic History of Latin America since Independence (Cambridge, 1994); probably the best economic history of Latin America in Spanish is Ciro F. S. Cardoso and Héctor P⃩rez Brignoli, Historia económica de América Latina (2 vols, Barcelona, 1979). For economic histories of individual countries, see the bibliography at the end of this volume.

(6) The classic exchange over the early nineteenth century was between D. C. M. Platt and Stanley and Barbara Stein: see D. C. M. Platt, ‘Dependency in Nineteenth-Century Latin America: an historian objects’, Latin American Research Review 15:1 (1980), 113–30; Stanley J. and Barbara H. Stein, ‘D. C. M. Platt: the anatomy of autonomy’, Latin American Research Review 15:1 (1980), 131–46.

(7) In an important and neglected comment on the Platt-Stein debate James Street drew attention to some of these issues, contrasting Argentina and Japan's attitudes towards foreign business and techniques in the late nineteenth century: see James H. Street, ‘The Platt-Stein Controversy over Dependency: another view’, Latin American Research Review 16: 3 (1981), 173–80. One important contrast which has been the subject of much comparative research has been the differing paths of development followed by Argentina and the white dominions of the British empire: see, for example, John Fogarty, Ezequiel Gallo, and Hector Diéguez (eds), Argentina y Australia (Buenos Aires, 1979); David Denoon, Settler Capitalism: the dynamics of dependent development in the southern hemisphere (Oxford, 1983); D. C. M. Platt and Guido di Tella (eds), Argentina, Australia, and Canada: studies in comparative development, 1870–1965 (London, 1985); and Jeremy Adelman, Frontier Development: land, labour, and capital on the wheatlands of Argentina and Canada (Oxford, 1994).

(8) There is an enormous amount of literature on this. Useful introductions can be found in Cristóbal Kay, Latin American Theories of Development and Underdevelopment (London, 1989), chapter 2; Joseph L. Love, ‘Raúl Prebisch and the Origins of the Doctrine of Unequal Exchange’, Latin American Research Review 15:3 (1980), 45–72; E. V. K. Fitzgerald. ‘ECLA and the Formation of Latin American Economic Doctrine’, in David Rock (ed.), Latin America in the 1940s: war and postwar transitions (Berkeley, 1994), pp. 89–108.

(9) See Kay, Latin American Theories, chapters 5 and 6; Joseph L. Love, ‘The Origins of Dependency Theory’, Journal of Latin American Studies 22 (1990), 143–68.

(10) André Gunder Frank, Capitalism and Underdevelopment in Latin America (Harmondsworth, 1971). Frank's ideas had particular resonance amongst Latin American scholars in the United States and Western Europe, and this was helped by the fact that his work appeared in English long before the other classic ‘dependency’ text, Fernando Henrique Cardoso & Enzo Faletto, Dependency and Development in Latin America (Berkeley, 1979); this was first published in Spanish in 1969. For critiques of the way in which dependency theory was adopted by historians and social scientists see articles by two leading Latin American intellectuals, Fernando Henrique Cardoso, ‘The Consumption of Dependency Theory in the United States’, Latin American Research Review 12: 3 (1977), 7–24; and Tulio Halperín Donghi, ‘“Dependency Theory” and Latin American Historiography’, Latin American Research Review 17: 1 (1982), 115–30.

(11) This dismissal of the domestic private sector was probably most marked in Chile and Venezuela where, due to the nature and history of the export sectors, the state became the principal actor in the economy: see chapters 4 and 8 of this book.

(12) D. C. M. Platt, ‘Business Archives’, in Peter Walne (ed.), A Guide to Manuscript Sources for the History of Latin America and the Caribbean in the British Isles (London, 1973), pp. 442–513; D. C. M. Platt (ed.), Business Imperialism, 1840–1930: an inquiry based on British experience in Latin America (Oxford, 1977); for a brief review of Platt's overall contribution, see Rory Miller, ‘Christopher Platt (1934–1989): an appreciation’, Bulletin of Latin American Research 9 (1990), 117–21.

(13) Safford, ‘Foreign and National Enterprise’; Richard Graham, ‘A British Industry in Brazil: Rio Flour Mills, 1886–1920’, Business History 8 (1966), 13–38.

(14) Simon Collier, ‘The Historiography of the “Portalian” Period in Chile’, Hispanic American Historical Review 57 (1977), 680.

(15) The influence of Alfred Chandler on Latin American historians is mentioned in two essays in this volume, those on Colombia and Brazil, but only as a very recent influence. The key works in this context are probably Alfred Chandler, Strategy and Structure: chapters in the history of the industrial enterprise (Cambridge, 1962), and The Visible Hand: the managerial revolution in American business (Cambridge, 1977). One important contribution by Mira Wilkins with clear implications for Latin America is ‘Comparative Hosts’, Business History 36: 1 (1994), 18–50. Wilkins' important earlier books, The Emergence of Multinational Enteprise: American business abroad from the colonial era to 1914 (Harvard, 1970), and The Maturing of Multinational Enterprise: American business abroad from 1914 to 1970 (Harvard, 1974), are rarely mentioned by historians of Latin America.

(16) See, however, Charles Jones, ‘Institutional Forms of British Foreign Direct Investment in South America’, Business History 39: 2 (1997), 21–41, which relates the evolution of British companies to the concepts of investment groups and free-standing companies.

(17) For differing British views on the value of company history or the case-study approach to business history see Leslie Hannah, ‘New Issues in British Business History’, Business History Review 57 (1983), 165–74; Donald Coleman, ‘The Uses and Abuses of Business History’, Business History 29: 2 (1987), 141–56; Terry Gourvish., ‘Business History: in defence of the empirical approach?’, Accounting Business and Financial History 5 (1995), 3–16.

(18) One can see this in many other areas of Latin American history: examples of relevance to the business historian are the way in which the US concept of ‘the melting pot’ has often been applied to studies of European immigration, or the way in which US labour historians of the Left searched for a heroic, militant and organised working class in early twentieth-century Latin America, ignoring other significant aspects of labour history.

(19) See especially Ortega's comments on work by Arnold Bauer and Mario Góngra on pp. 69 and 72.

(20) Vera Blinn Reber, ‘Archival Sources for Latin American Business History’, Business History Review 59 (1985), 670–79.

(21) There are, for example, almost 800 large bound volumes of notarial archives covering Lima, a city of little more than 100,000 people, between 1840 and 1900. Transactions of interest to business historians are scattered throughout them.

(22) Douglass C. North, Institutions, Institutional Change, and Economic Performance (Cambridge, 1990); North also contributed a short essay to a useful collection which contains other papers of relevance: John Harriss, Janet Hunter and Colin M. Lewis (eds), The New Institutional Economics and Third World Development (London, 1995).

(23) Diana Balmori and Robert Oppenheimer, ‘Family Clusters: generational nucleation in nineteenth-century Argentina and Chile’, Comparative Studies in Society and History 21 (1979), 231–61, make some generalisations about the growth of family groups over three generations, but very few historians have examined the process of decline.