The evolution of private wealth in a peripheral, natural resource-based economy: Uruguay, 1860–1940

We reconstruct long-run private wealth and national income for Uruguay, 1860–1940, by re-estimating Ochoa’s benchmark inventories with harmonized concepts and prices. Using a Piketty–Zucman-style framework, we document levels and turning points of the wealth–income ratio (β), the composition of private wealth (agricultural land, housing, other assets), an accounting decomposition separating the saving-induced terms (s/β) from real capital gains (q), and the evolution of the capital share (α) and implied return r=α/β. Uruguay’s β begins near the lower envelope traced by the United States and Sweden, rises after the 1880s toward the European core, and declines from the 1910s into the 1930s. Throughout, the portfolio remains persistently land-heavy –agricultural land (including livestock) dominates early on and falls only gradually– contrasting with the shift toward housing and other assets in core economies. The decomposition shows that phases of increase of real wealth are associated with positive s/β and q effects, while contractions reflect mainly capital losses. We hypothesize –and the evidence is consistent with the claim– that the exhaustion of the agro-export model was the primary driver of the interwar decline in β (closure of the agrarian frontier, technological limits of natural pastures, adverse external shocks, and stock liquidation), with fiscal and regulatory initiatives (e.g., higher taxation of large landholdings) as plausible auxiliary channels. By providing a transparent, Uruguay-first account within a bounded cross-country context, the paper expands the empirical basis for understanding the long-run dynamics of wealth, returns, and inequality in peripheral, land-intensive economies.