The end of the 19th century saw an incredible integration of the world economy. Goods, people and capital moved around the globe with increasing ease and in ever-growing amounts. Technology allowed for a uniform system of commodity prices to exist and thus trade to more globalized. While this integration allowed consumers and producers around the world to take advantage of foreign markets and prices, it also exposed them to the vagaries of these markets. Changes in livestock prices in Canada could affect the price of Argentine beef and thus the life of Argentine ranchers. A catastrophe the scale of the First World War was bound to have profound effects on this global economy and all its participants whether they were a belligerent or not.
Latin American countries were certainly a part of this global economy. Massive amounts of European capital flowed into the region. By 1914, the United Kingdom had poured close to 4 billion dollars’ worth of capital into Latin America. Large sums were also invested by France (
Latin America’s major role in this global economy was as an exporter of commodities. Argentina exported wheat, corn, beef and wool. Foreign capital and technology fuelled the Chilean copper-mining industry at the turn of the century. Chile’s production of nitrates for the world market was also expanding rapidly, as were its wheat and wool industries in the years leading up to the First World War. Although Brazilian coffee production was volatile in the years leading up to the war, it was nonetheless an incredibly important part of the Brazilian economy, accounting for over half of the value of all Brazilian exports in the years 1870—1911. Significantly for the coming war, the primary consumers of Brazilian coffee were the USA, France and Germany. The Mexican export economy grew dramatically until 1911 and tended to be more diversified than other Latin American economies. Ranching, mining, as well as henequen and oil production were important elements in Mexico’s export economy.