ABSTRACT
During the nineteenth century, competing narratives about how the newly independent nations of Latin America should be organized economically, politically and culturally were in circulation. The classical economic theories espoused by Scottish economist Adam Smith in The Wealth of Nations along with David Ricardo’s theory of comparative advantage had become extremely influential in Europe and beyond, and had brought to an end the mercantilist model that had dominated global trade. Classical economics promotes free markets and specialization through an international division of labour. This body of economic thought was appealing to Latin American liberal elites and the new entrepreneurial class that emerged after independence. The question of free trade was particularly central to Latin American economic development, given that independence movements had fought in part to free up trade from the monopolies held by Spain and Portugal. Although debates about the role of the state and the value of statism and protectionism in generating prosperity continued to circulate, by the start of the twentieth century, free trade thinking clearly had the upper hand. It was well supported by local entrepreneurs and foreign investors and underpinned by a credible body of economic thought.
