く追悼論文 〉

In memory of Dr. Prebisch
life and Economics-His
Keiko Imai (Sopfia University)
IThe well-known Argentine economist Dr. Rafil Prebisch passed away
on April 29 last year. He was caught by a sudden heart attack in Santiago

in Chile. He just celebrated the 85th birthday less than two weeks before,and had been very active in his work until his closing days. The funerals

were held in Buenos Aires, Argentina and in Santiago, Chile. In Buenos

Aires, Argentine President Rafil Alfonsin attended the ceremony andmade a heartfelt memorial address. The death of Dr. Prebisch was deeply

lamented not only in Argentina and Chile, but also all over the world,
especially in the developing countries. It was because he devoted himself

to work for the problems of the developing countries.

Dr. Prebisch is a very well-known Latin American economist inJapan. His works had been widely introduced and studied. I myself
started my research on Latin American economy from studying thetheory of Dr. Prebisch, which served me as an excellent guide. I published

my study on economics of Dr. Prebisch in "Study on Latin America by
EClA-Reconsideration of Prebisch Theory"tt). This work focused on theintroduction and reexamination of the theory and the policy of economicIn memorv of Dr. Prebischdevelopment presented by Dr. Prebisch. I ask the readers to refer to it.

who are interested in this subiect.

In this article, I would like to trace the life of Dr. Prebisch, andthrough which we will appreciate his contributions to the problems of thedeveloping countries.

IIThe life of Dr. Prebisch can be divided into four stages, according tothe main bases of his activities. The first stage is to 1940's, while he grewup, educated in Argentina and devoted himself to the Argentine economicand political problems. He was born on April 12, 1901. He studied
political economy in the National University of Buenos Aires. He passed
his University life in the "Golden Age of Argentine Economy" before theWorld Crisis in 1929. Argentina expanded export of the primary products, and promoted industrialization such as processing sectors of theprimary products based on the domestically produced materials. Dr.
?rebisch graduated from the University in 1925. He started research andteaching there, and at the same time he contributed to the policy-making

for the Argentine Government.
By the way, the world crisis in 1929 gave a great impact to change

the world economy. The world economy changed itself from openmultilateral system to blocked-bilateral economy. This structual change

in the world economy gave the serious influence to Latin Americaneconomy. Argentina was not an exception. The United Kingdom,
Argentina's most important customer, established the blocked economy

within British Empire by Ottawa Treaty in 1g32. Through this blocked

, 7 >/ 7 .r I rrffiif,+*RNo. 7 (198i +)95

economy, Argentina was pushed out to the inferior position to the Britishmarket, comparing with the Dominions like New Zealand and Australia
in exporting ceareals and meat. In order to regain the lost market in theU. K., Argentina sent the economic mission to the U. K. to negociate withBritish Government. Dr. Prebisch was appointed as a member of themission. Argentine mission, being in the difficult and inferior position tonegotiate, tried painstakingly to regain the export quota to the U. K. The

two countries finally reached the agreement, which is called RocaRunciman Pact named after the representatives of the both sides.

Argentina was quite successful in regaining the export quota from the U.
K., but it was obtained only with compensation of the various concessions

to the U. K.

By the w?y, there arose a strong tendency of nationalism in Argentina, and it criticized that the Argentine mission gave excessive
concessions to the U. K. Roca-Runciman Pact caused to fire anti-British

nationalism. Dr. Prebisch was in the midst of struggling with finding theway out from the economic and political crisis. These agonizing efforts
had brought him poignant realization of the fact that the primary productexporting countries had to face the severe economic crisis in the blocked

world economy.

After two years from Roca-Runciman Pact, the Central Bank wasfounded in Argentina, and Dr. Prebisch was appointed as the first Gover-nor. Until then, Argentine Government practicallv did not have any
political means to control economy in monetary and financial fields. Now
then Argentina had the Central Bank, and young Prebisch was loaded atcontrolling and adjusting Argentine economy against the structual change

96

In memory of Dr. Prebischof the international economy. He studied the theory of John Maynard
Keynes carefully and in detail. We can see what Dr. Prebisch received

from Keynesian theory through his publication of Introducci1n a
KeynesQ). In this book, he wrote that Keynsian economics gave him a clue

to explain the economic phenomena such as chronic unemployment andeconomic depression which could not be fully explained by classicaltheorytsr. He was expected to reconstruct the depressed Argentine econ-orly, using effectively the monetary and financial policy. Struggling withthis task, he realized how deeply the primary products exporting economy
depended upon the world economy, lead by the developed countries. This

experience gave him an important indication to build Center-Peripherytheory later.

In 1943, Dr. Prebisch resigned the governor of the Central Bank, andreturned to the University in order to concentrate on the academic works.

From 1946, Argentina was governed by the Peronist Party, and Dr.
Prebisch had the opposing view to the Peronist, concerning to the develop-ing strategy of Argentine economy. We will see it later. He enegeticallypublished works, such as Introducci1n a Keynes as I mentioned before,and "El patr6n oro y la vulnerabilidad econ6mica de nuestros paises"ta), ard"The Economic Development of Lation America and Its Principal Problems" (from now on it is called as .I/s Principal Problems)(5). In Ib PrincipalProblems, he developed the challenging theoretical framework of Center-Periphery theory. Analizing the causes of underdevelopment in thedeveloping countries, he devided the world economy into two groups. The
one is Center which includes exporting countries of manufactured prod-ucts, and the other, Periphery which comprises exporting countries ofprimary products. He analyzed the trend of terms of trade, and reached

the conclusion that the terms of trade deteriorated constantly for the, 7 / 7 .t 't) )1ffifr,+*ENo. 7 (1987 +)97

Periphery, on the other hand improve for the Center. Now this is wellknown as the theory of deterioration of terms of trade, and induced astrong and active debates in the international academic world. In the firststage, Dr. Prebisch devoted himself to economic problems in Argentina,and based on this experience developed the Center-Periphery theory
which challenged the classical economics.

IIIThe second stage begins from 1950 when Dr. Prebisch moved toEconomic Commision for Latin America (ECLA) as the Secretary Gen-

eral in Santiago, Chile. His works were extended from Argentine econ-

omy to Chilean. He fulfilled a most important role to establish theacademic base to promote the creative and facts-finding research in theinitial period of ECLA. He made great efforts to train and lead the young
economists as well as developed his own works. He published various

analytical works, focusing on the economic problems in Latin America.
Some representative works among them are "Growth, Desequilibium andDisparities: Interpretation of the Process of Economic Developmsnf"(6),"Commercial Policy in the Underdeveloped Countries"(7) and "EconomicDevelopment on Monetary Stability"t$. In the last publication, he dealt

with the debate between Monetarists and Structuralists, concerning to thechronic high inflation in Latin America, and promoted the structuralist
theory which was born in Latin America in 1950's.
During the second stage, his main working base was concentrated onECLA, but in a short period, he retunned to Argentina accepting a role asan economic advisor to the new Argentine Government after the fall ofPer6n. He analyzed the real economic situation in Argentina, and critic-

98

In memory of Dr. Prebischized severely the economic policy under the Per6n Government in his

report. The Economic State of Argentina was published in 1955. In 1956
he published The Plan for the Economic Recouery of Argentina, present-ing the concrete policy to overcome the economic problems.
By the way, the main differences in the economic strategies between

Dr. Prebisch and the Peronist were as follows. Firstly Dr. Prebischpresented the development strategy to promote import-substituting indus-trialization, based on the balanced growth of industry and agriculture,
while the Peronist Government to promote industrialization with extreme
preference over agriculture, so to speak unbalanced growth. Secondly theformer presented the policy to accept the foreign capital as a pumpingpriming factor for economic development in the developing countries, on

the other hand the latter executed the rejecting policy toward foreign
capital, and nationalized the foreign assets. Thirdly as the leading sectorof economic development, the former emphasized the importance of theprivate sector, while the latter strengthened government control overeconomy.

Accepting the strong request of the Argentine Government, Dr.
Prebisch took a role as an economic advisory. But he stayed in theposition only for a short period, because of the widely spread anti-military
feelings and at the same time great influence of Peronism among theArgentines.

Dr. Prebisch moved from ECLA to Latin American Institute for
Economic and Social Planning, another United Nations Organization in1962. He published Towards a Dynamic Deuelopment Policy for Latin

,7 Y 7 .t ) hWn+*ENo.7 (1987 +)America$), in which he developed his research on Latin American economy with more detailed analysis and concrete policy presentation.

IVThe third stage starts from 1964 when Dr. Prebisch took office as theSecretary General of UNCTAD. He was engaged in the North-Southproblems, making the best use of his abundant experiences and theaccumulation of research on Latin American economy. His publicationon the problem of the developing countries, entitled Towards a New
Trade Policy for Deuelopment(Lo) attracted the world-wide attention. It
was famed for "Prebisch Report" and received a special support from thedeveloping countries. In this report, he explained the economic mecha-nism between North and South, based on Center-Periphery theory. Heemphasized the importance of foreign trade, not aid, to develop thedeveloping countries, and requested to the developed countries to open

their market for the developing countries. Policies presented by Dr.
Prebisch were partly modified and one of the most important goals forUNCTAD was set "both trade and aid" at the first General Assembly ofUNCTAD. The second General Assembly was held in 1968, where hepresented Towards a Global Strategy for Deuelopment("). In this report,
he focused on the analysis of obstacles to development in the developing

countries, not only the external but also internal factors.

Dr. Prebisch made a great effort for his task to organize the developing countries with different economic and political conditions, and reachin accord on the policies among them. He however always worried thatUNCTAD might become only a debating place between North and South,

without any fruitful results. How to arrange the divergences between
North and South, and among the nations in South, is the most importantIn memory of Dr. Prebischtask to him in the third stage.
VAfter six years of work for UNCTAD, Dr. Prebisch returned to Latin
America, and placed himself to lead the activities of Latin American
Institute for Economic and Social Planning and ECLA in Santiago, Chile.
He analyzed the Latin American economy, and published the book entitled Clnnge and Deaelopment : Latin America's Great T'ask(.z). During
1970's Latin American countries experienced drastic changes both inpolitics and economy. Military coup d'etat broke out in various countries
including Chile and Argentina, and military controll was strengthened inLatin America. The Military Governments introduced extremely liberalpolicy in economics. Under this tendency, economic nationalism which
had flourished in 1960's, was fading away. The process of industrializa-tion stepped backward, and as the result, Chile and Argentina faced thesevere economic recession with debilitated manufacturing sectors. He

warned the danger of the excessive economic liberalism in Latin America,

affirming that it was anachronistic for the developing countries.
He developed further his Center-Peripfery theory to Peripferal Capi-talism, and published Capitalismo ferifdrico, crisis y transforrnaci6n("t,integrating his works till then. In this book, he criticized the neoclassics

and Marxism, and set up the extended framework of the theory ofPeripheral Capitalism.
When Argentina recovered the civilian control in 1983 after sevenyears of the Military Government, Argentines elected the Radical Party

in stead of the Peronist for the Government. President Rafil Alfonsin

17/ 7 .1 ) nwfr+*ENo. ? (1987 +)101

eagerly requested Dr. Prebisch to help his country as the economic

advisor. Argentina had puzzled nearly forty years, struggling with theideological disputes between anti-foreign nationalism of the Peronist
Party, and ultra economic liberalism of the Military Government. But
now Argentines try to bid farewell to the ideological antagonism ineconomic policy. She has stepped forward to execute the more rational

policies for economic development. Here Dr. Prebisch was asked tocooperate with the present Government in order to execute his economicstrategies.

Through his life, Dr. Prebisch devoted himself on inquiring NorthSouth problems, to begin with his own country, to Latin America and thento the developing countries as a whole in UNCTAD. Then after hereturned Latin America and engaged himself with Latin American andArgentine economic problems. His Center-Peripfery theory created thefundamentally new point of view for North-South problems. It has givena great influence to the Structuralist school and Dependency theory. It
can be said that Dr. Prebisch provided the origin of the economics for thedeveloping countries, which should be succeeded and developed, conquer-ing the lament to Dr. Prebisch.
NOTES(t) It was compiled in Okabe, Hiroji ed., Latin American Economic Deuelo|ment,
Institute of Developing Economies, Tokyo,1972 (published in Japanese).

(z) First edition was published in 1947.
(3) Prebisch, Raul, Introducci1n a Keynes, 5 ed., Fondo de Cultura Econ6mica,
M6xico-Buenos Aires, 1965, p.7.

(4) It was published in lornadas, NO.11, El Colegio de Mdxico, Centro de Estudios
Sociales, Mexico.

L02In memory of Dr. Prebisch(5) It was published by U.N., Department of Economic Affairs, 1949, and republishedin Economic Bulletin for Latin America, ECLA, vol.. vII, No. 1, February, 1g62.
(6) It was published in Economic Suraey of Latin America Lg4g, ECLA, i951.

ft) It was published in Arnerican Economic Reuiew, YoL. XLIX, No.2, May 1gs9.
(8) It was published in Economic Bulletin for Latin America, ECLA, VOL. VI. NO.1,March, 1961.

(9) It was published by U.N., 1963.
00) It was published by U.N., 1964.

0D It was published by U.N., 1968.
0D It was presented to Inter-American Bank and published in 1920.
03) It was published by Fondo de Cultura Econ6mica, Mexico, 1981.