comparative advantage – a pillar of liberal free trade orthodoxy – seemed a burden, rather than a boon, to the Argentine economy. Intuitively nurtured through practice, it was not until the publication of Prebisch’s Havana Manifesto 157 that he would finally be able to ascertain the theoretical foundations that matched his experiences. These foundations would give rise to the Prebisch-Singer hypothesis, Prebisch’s central contribution to economic theory. The Prebisch-Singer hypothesis states that the benefits arising from international trade are heavily in favour of industrialised economies: the terms of trade of primary product-based economies deteriorate because, in the long term, the price of primary commodities decline in relation to the price of manufactured goods. While Prebisch has historically, and admittedly unfairly, received the bulk of the credit 158 , the German-British economist Sir Hans Wolfgang Singer – a great development economist in his own right – was the first to highlight statistically the long term trend in the terms of trade of underdeveloped countries, in his paper published in February 1949 titled ‘ Post-war Price Relations between Under-developed and Industrialized Countries’ 159 . Nevertheless, both Prebisch and Singer reached similar conclusions independently and at roughly the same time. But Preb isch’s focus was on the business cycle, specifically illustrating the various reasons why the behaviour of wages in underdeveloped and developed countries differed. Singer himself argued that Prebisch’s views were “better integrated into general 157 Raúl Prebisch, “The Economic Development of Latin America and its Principal Problems” Economic Commission for Latin America (English translation: New York, 1950) 158 John Toye and Richard Toye, “The origins and interpretation of the Prebisch- Singer thesis,” History of Political Economy 35 (3) 2003, pages 437 – 467. 159 UN, “Relative Prices of Exports and Imports for Under -Developed Countries. A study of Post-War Terms of Trade between Under-Developed and Industrialized Countries” United Nations Department of Economic Affairs (New York, 1949)
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