Background
- The First World War (1914–1918) reshaped global and hemispheric power dynamics. While the United States emerged as a global industrial and financial leader, Argentina, one of Latin America’s wealthiest nations, experienced both economic disruption and political shifts.
Economic Impact
United States
- The war accelerated the U.S. shift from debtor to creditor nation, as Europe borrowed heavily to finance the conflict.
- Industrial output and agricultural exports soared; U.S. GNP grew by over 20% (1914–1918).
- The government coordinated production through agencies such as the War Industries Board and financed the war via Liberty Bonds.
- By 1918, New York had replaced London as the world’s financial hub, marking a lasting shift in global economic leadership.
Definition
War Industries Board (1917)
A U.S. government agency that coordinated industrial production and standardization during the war to maximize efficiency and output.
Argentina
- Before 1914, Argentina was one of the world’s top exporters of beef, wheat, and wool, heavily dependent on British trade and shipping.
- The British naval blockade and wartime shipping shortages devastated exports, cutting off access to European markets.
- Wartime inflation rose sharply as imports of manufactured goods fell, leading to shortages and labor unrest.
- Argentina began a gradual shift toward industrial self-sufficiency, as domestic industries filled the gap left by disrupted imports.
Definition
Economic Nationalism
A policy emphasizing domestic production and reduced dependence on foreign trade, especially during global disruptions.
Political Impact
United States
- The war strengthened the executive branch, with President Woodrow Wilson exercising unprecedented wartime powers.
- Federal agencies expanded regulation over industry, agriculture, and labor, setting a precedent for future government intervention.
- Postwar politics were marked by a return to isolationism, with the Senate’s rejection of the Treaty of Versailles (1919) and refusal to join the League of Nations.
Argentina
- President Hipólito Yrigoyen (1916–1922) maintained neutrality throughout the war, balancing relations with Britain and Germany.
- Neutrality preserved Argentina’s sovereignty but caused friction with the U.S., which pushed Latin American nations to support the Allies.
- Domestically, Yrigoyen used neutrality to consolidate political support and strengthen the Radical Civic Union (UCR), expanding middle-class participation in government.
Definition
Neutrality Policy
The diplomatic stance of non-involvement in war, adopted by many Latin American nations to protect trade interests and sovereignty.
