Raul Prebisch was born in Tucuman, Argentina, into a family descended from German settlers. He studied economics at the University of Buenos Aires and then started to teach there as a professor of political economics, a post he held until 1948. At the same time, he worked as a civil servant at the national bank, and in 1935, became its first governor. In 1950, he became the executive secretary for the UN Economic Commission for Latin-American Caribbean, ECLAC. And later, general secretary for the United Nations Conference on Trade and Development. He died in Santiago, Chile in 1986. During the depression of the 1930s, he'd been involved in a difficult trade negotiations on meat and cereals with Great Britain, which was Argentina's largest market. The experience rammed home to him, his countries weak position in trying to extract better trade terms. He concluded that structurally, the prices for primary products tended to decline relative to those of manufactured goods, and that the benefits of international trade tended to go to industrial countries. In his view, this was an inevitable consequence of the nature of production, with many producers facing few, and the nature of demand, where beyond certain income levels, demand for primary products tended to grow more slowly and that for industrial goods. He postulated a world where Europe and the United States were the center and the rest formed the periphery. The terms of trade would always move against the periphery, and this would act as a form of exploitation. The answer as he perceived it, was to promote structural change and industrialization in his own country. Similar ideas were also being formulated by a British economist Hans Singer. They're often referred to as the Prebisch Singer thesis. But it was Prebisch who did the most to promote them. He turned his position in the ECLAC into a platform for advocating import substitution policies and inward development. And he has used his role in ONTAD to press for preferential trade conditions for primary producers. Prebisch was not a revolutionary, but a reformer trying to work within the system. And whatever the validity of the original analysis, the solutions, at least when applied to Latin America, appeared by the 1980s to have failed. The policies of inward development were all too often employed as excuses for excess protectionism, for exaggerated development schemes, for a strangling network of control of regulations. For the neglect of export competitiveness, and for inflationary public financing. Triggered by the Latin American debt crisis of the 1980s, the whole edifice began to unravel. Bankrupt industries, bankrupt governments, and the bankrupt political system that'll become riddled by clientalism and corruption. Despite all of this, the image still persists of poorer countries at the wrong end of the value chain being disadvantaged by the operation of the international system. And Prebisch's analysis of economic structuralism has come to underline a more radical approach by theorists who would view reformers like Raul Prebisch as part of the problem rather than as part of the solution.
