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International colloquium on new directions for development planning in market economies. 9 Opening addresses. 9 Address by Mr. Norberto Gonzalez, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC).

Contrary to a view commonly held, the primary export sectors of Latin America did not lose power when industrial production for the internal market was accelerated in some countries of the area after the world economic crisis of 1930. Although based on labour intensive manufacturing for the internal market, the new model of development did not allow wages to increase at a rate capable of promoting a rise in demand for manufactured goods. This may appear surprising in the light of the usual interpretation of the post‐1930 process of industrialization as designed to meet an internal demand for goods which could no longer be imported due to balance of payments deficits. In fact, the satisfaction of internal demand was only a secondary objective, or, rather, it was instrumental to achieve the primary objective of the new model of growth, which was the need to find new investment opportunities for capital accumulation. With the exception of Argentina, where a relative shortage of labour prevailed, the existence of a labour surplus in all the other Latin American economies considerably weakened the bargaining power of the workers and allowed for a rapid capital accumulation. The basic stability of the pre‐crisis distribution of national income between profits and wages was thus maintained. Furthermore, the presence of a labour surplus helped to resolve – by eliminating it – the conflict assumed to have taken place between those groups which derived their profits from the export of primary goods and those groups whose profits came from investment in industry. In other words, the presence of a labour surplus acted as a mechanism by which the pre‐crisis system could be easily adapted. This article analyses some of the economic and political techniques through which that adaptation was implemented.