HERE’S a scary thought in the midst of the financial crisis. Although there was a time when Argentina and the United States were serious economic rivals, that changed with the Great Depression. America recovered and became the world’s richest nation. Argentina ended up a mess.

How did such a reversal of fortune happen? In “False Economy: A Surprising Economic History of the World” (Riverhead, 321 pages), Alan Beattie writes that the answer had a lot to do with the two nations’ radically different responses to the panic that followed the stock market crash of 1929.

The United States swiftly enacted the New Deal of Franklin D. Roosevelt. Argentina ended up electing Juan Domingo Perón, who tried to seal off Argentina from the rest of the world economically. Over the years, the country would endure huge deficits, runaway inflation and a host of other maladies that contributed to economic collapse. To this day Argentina has not recovered.

Mr. Beattie, world trade editor at The Financial Times, provocatively suggests that it could have been the other way around.