From Casey Research:
Nick Giambruno: Joining me now is David Galland, the managing director of Casey Research. His internationalization story, which involved moving his life and his family from the U.S. to Argentina, was recently featured inInternationalize Your Assets, a free online video from Casey Research. He is perfectly suited to help us better understand some of the important lessons in internationalization that Argentina offers. Welcome, David.
David Galland: Nice to be here.
Nick: First, why don’t you give us a little background about the Argentine people and how they have learned to deal with their government and recurring financial crises?
David: A good way to think about Argentina is that it is an immigrant society, very much like the U.S., except that the dominating culture emerging from the melting pot was Italian.
This is why Argentines tend to be famous for their dark good looks, vibrant culture, and excellent food. Unfortunately, they also inherited “Italian style” politics. I think that’s a useful context for understanding the consistent dysfunctioning of the Argentine government.
This at least partially explains Argentina’s long love affair with the Peróns. The country had one of the most successful economies in the world until Juan Perón came into power and destroyed it. And, with some rare bright spots, it’s gone through long periods of financial crisis ever since. Despite that, the Perónistas are still very much in charge.
If you look at the history of financial crises in Argentina, you will see there is almost no 10-year period when there isn’t a financial crisis. As a result, the population has become extremely resilient in the face of financial crises. When you mention the faltering state of the economy, every Argentine you talk to will shrug and make a comment along the lines of, “No problem; this is Argentina, we’re used to it.” In other words, they have become fatalistic about such things.
But that doesn’t mean they are complacent, because thanks to their long experiences with financial crises Argentines have become masters at dealing with things like inflation and ridiculous government policies…