I wasn’t aware of Argentina as an example and spent some time looking into it. My takeaway is that it’s interesting and I don’t have a great story about it, other than that at the time, agriculture was most of all trade, and most of all consumption globally, whereas today with a much richer and industrialized world, demand for food is not large enough to make it competitive with manufacturing as a path. But that’s tentative.
just because a product is cheap doesn’t mean you can’t have a big advantage in them if it is a very scaled business; according to OWID, US agricultural productivity is over 100x higher than in Liberia in dollar terms
This is largely because the US uses so much more capital and so much less labor than developing countries, so I don’t interpret this in support of the idea that developing countries can get rich without most labor leaving agriculture.
it doesn’t explain why people would choose to work in a less productive sector (agriculture or services), where wages are presumably lower, instead of manufacturing.
That’s the puzzle I was talking about in point #3. The likely explanation is that people select into the less productive sector because they don’t have the skills to work in manufacturing, for reasons elaborated more in that section.
I wasn’t aware of Argentina as an example and spent some time looking into it. My takeaway is that it’s interesting and I don’t have a great story about it, other than that at the time, agriculture was most of all trade, and most of all consumption globally, whereas today with a much richer and industrialized world, demand for food is not large enough to make it competitive with manufacturing as a path. But that’s tentative.
This is largely because the US uses so much more capital and so much less labor than developing countries, so I don’t interpret this in support of the idea that developing countries can get rich without most labor leaving agriculture.
That’s the puzzle I was talking about in point #3. The likely explanation is that people select into the less productive sector because they don’t have the skills to work in manufacturing, for reasons elaborated more in that section.