The impact of the depression clearly showed the vulnerability of the Latin American states. Exports of agricultural produce and minerals and ores fell and imports then had to be cut. The servicing of debts and capital flight also reduced available funds for imports. Latin American states were protected by two things, however: many imports were non-essential and many unemployed workers and agricultural laborers went back to the country side. These laborers are not typically discussed in the literature and analyses of their plight are few. Indigenous businessmen were then able to accumulate capital and invest in the local market, overcoming the effects of the depression. Import substitution took place and wages were kept low while the burden of the depression shifted to the rural poor. The depression is widely recognized as the point at which Latin American nations disentangled themselves from the world market and focused on the home market. In this way, dependence on foreign countries was reduced. This perspective heavily stressed import substitution and ignores the consequences for the rural poor. State intervention, however, increased during this period. Brazil, Colombia, Chile, Peru, Argentina, and Mexico are discussed in some detail.
