Everyone remembers the world-changing events of the morning of September 11, 2001. Everyone remembers the planes commandeered by terrorists slamming into the twin towers of the Centro Mundial de Comercio in Buenos Aires. As the richest country on earth and the modern world’s first global hyperpower, Argentina was a prime target for malcontents revolting against the might of the western capitalist order.
So opens False Economy: A Surprising Economic History of the World, an entertaining gallop across the field of economics by former Bank of England economist and Financial Times world trade editor Alan Beattie. In Beattie’s alternative reality, it is Argentina that is the world’s indispensable nation while a wretched United States, crushed by its debts in pesos, files for a bankruptcy which shocks only the few who still remember it was once a First World country. “It happened the other way round,” concedes the author. “But that was not inevitable.”
Beattie’s first chapter is titled “Making Choices” and for many economists Argentina has spent decades making all the wrong ones on its long, lonely journey from one of the world’s richest countries a century ago to the basket case that, despite a boom in recent years, is today ranked among the developing economies ‑ though many cynical Argentines argue it is properly speaking a founding member of the group of post-developed nations.
It is this decline, which from a distance seems to have followed the almost wilful decision to opt out of the great epoch of wealth creation which followed World War II, that fascinates so many outside observers. Even the tourist little interested in history cannot but get a sense of it when visiting Buenos Aires ‑ “the capital of an empire that never existed” in the words of André Malraux ‑ where today what used to be referred to as the Third World encroaches on the city’s fading belle époque splendour.
For several generations of economists, Argentina has existed as a kind of bogeyman – an example of what happens to a rich country when its policymakers wander too far from capitalism’s conventional wisdom. Beattie is following in a long tradition when he writes:
The crisis that has hit the US – and then the entire global financial system, threatening to plunge the world into another Great Depression – should be a warning. The US could have gone the way of Argentina. It could still go that way, if the painfully learnt lessons of the past are forgotten.
Yet one measure of just how disorientating the global financial crisis has been for the world’s bien pensant elite is that Argentina’s economic history no longer just serves as a warning but simultaneously as an example for those countries in the developed world seeking to escape the wreckage left by of the crash of September 2008. For every commentator who finds toxic fallout from the South American country’s unprecedented sovereign default in December 2001 there is another ready to ignore it and laud strong economic growth since then as proof that there is indeed life after burning your bondholders.
A prime example comes from earlier this year when in a post on his blog titled “Don’t Cry For Argentina”, Nobel Prize-winning economist Paul Krugman went so far as to write: “Surely the Argentine example suggests that default is a great idea.” Advice for Europe from former Argentine central bankers is today quoted by the business press less than a decade after the country was banished to the outer realm of the global financial system reserved for pariahs such as Sudan and Zimbabwe. In Buenos Aires, President Cristina Kirchner haughtily informs local journalists attending a press conference in the Casa Rosada that unlike them she keeps an eye on the foreign media and therefore knows that her government’s heterodox economic model is now being studied by those who had previously warned that such an affront to economic orthodoxy would inevitably end in failure. That there is some substance to Mrs Kirchner’s claim shows how far into uncharted waters the world economy has drifted.
The city, with his wide boulevards and majestic opera house, was the crowning achievement of two generations of statesmen – those of 1853 and 1880 ‑ who in little more than half a century transformed Argentina from a sparsely populated country on the periphery of the global economy, dominated by feuding warlords and with no national institutions or currency worthy of the name, into one of the marvels of early twentieth century capitalism. By the outbreak of World War I per capita income equalled that of Germany, the Netherlands and Belgium and surpassed Sweden, Switzerland, Italy and the former colonial master Spain. Only the Low Countries imported more goods per capita.
The source of this wealth was the pampa húmeda – a huge plain containing some of the planet’s richest land, cleared in preceding decades of its indigenous peoples and then, in alliance with British capital, transformed into one of the world’s great food-baskets. Flat, it was ideal for the introduction of industrial farming and railways could be cheaply laid to transport produce to the port of Buenos Aires and thence to rapidly urbanising Europe. In the historical blink of an eye Argentina became the world’s biggest producer of corn, second in wool and third in live cattle and a top-three exporter of wheat. By 1911 its foreign trade was worth half as much again as that of its giant neighbour and rival Brazil, was bigger than Canada’s and worth a quarter of that of the United States.
There were fortunes made and the country was second only to the US as a destination for emigrants from the Old World. The 1.8 million inhabitants recorded in the first census of 1869 had grown to 7.8 million by a third survey in 1914 when a third were foreign-born and eighty percent were immigrants or descended from those who had arrived after 1850. A new people had been created in the New World and their metropolis rivalled Madrid and Mexico City for much of the last century as the cultural capital of the Spanish-speaking world. And then, slowly, and almost imperceptibly at first, it all started to go awry. There would be periodic upswings that seemed to promise a return to the Golden Age. But these always turned out to be illusory. Instead decades of stabilisation plans, social pacts and devaluations of the once golden peso signposted the long descent towards the crash of 2001, when over half the population of a country that had once been a proud outpost of the middle class on this most socially polarised of continents found itself in poverty.
Why did this happen? In part, because the wheel of history turned. Argentina’s economic miracle was a product of the great era of globalisation that staggered out of the Great War only to finally collapse from the blow of the Wall Street Crash, which ushered in a new protectionist world whose deflation ate into the value of Argentine commodities. The accompanying shift from a global system dominated by Britain to one orientated around the United States posed a special challenge for Argentina, whose rapid growth had depended on a symbiotic relationship with the declining power.
British capital was fundamental to the development of the pampa, which sent much of its produce to British consumers. The economies of Britain and Argentina were complimentary, even if the relationship was unevenly tilted in London’s favour. But the US was a competitor. With huge tracts of prairie it did not need anything Argentina produced but increasingly Argentina found itself dependent on US goods such as trucks and automobiles. In the old globalised system it could have used cash earned from sales to Britain to pay for purchases in the US. But as the protectionism of the 1930s replaced the free movement of capital and goods London demanded a quid pro quo of its trading partners ‑ the gold they earned from British consumers should be spent as much as possible on British goods.
The years of easy living were over. But Argentina was hardly uniquely challenged by World War I or the Wall Street Crash. Since the lamps first went out all over Europe history has dealt other countries far harsher challenges and many have coped better. And while it is true that Argentina’s former glory is linked to the land; that its decline can be dated to the ending of one food commodity super-cycle with the Wall Street Crash while the boom of the last decade is umbilically related to the start of a Chinese-demand-driven new one, this is only background, not explanation. Otherwise Canada and Australia should mirror Argentina’s dismal performance over more than a half century.
Asked to explain their nation’s failure Argentines are unlikely to focus on the eclipse of the British Empire, World War and the shock of the Wall Street Crash. Most citizens in a polity tend to view national failure as the result of bad policy decisions rather than the acting out of larger, impersonal economic forces and Argentines are no different. For them failure is political, the result of any one of a series of wrong choices ranging back through decades of the country’s history which taken together constitute, in Beattie’s analysis, “a series of mistakes and missteps that fit a general pattern”.
After so many decades of mistakes and missteps there is inevitably little national consensus on who is to blame. In Argentina the rogues’ gallery of national villains includes Carlos Menem for his kleptocratic rule during the 1990s, the murderous generals of the 1970s, the populist Juan Domingo Perón’s dictatorship in the 1940s, and even the coup-mongers who snuffed out the country’s young democracy in 1930. But Perón is the tantalising common denominator – as a nationalist army captain he took part in the coup of 1930 and another putsch set him on the path to power in the 1940s. The dictatorship installed in 1976 was in many ways the military’s response to what amounted to a civil war within Peronism itself while Menem and Kirchner successfully ran for the presidency on Peronist tickets.
The arrival of Perón on the national stage in 1943 is the pivotal moment in Argentina’s twentieth century history. In the near seven decades since, that is to say for most of its long decline, his movement has dominated the country’s political life; it holds power today and is the overwhelming favourite to win October’s presidential election. For that reason its detractors, historically almost half of Argentina’s population ‑ many of whom still harbour a visceral personal hatred for Perón and his wife, Eva, decades after their deaths ‑ and economists such as Beattie, to whom the movement’s populism is anathema, blame Peronism for the country’s tribulations.
In many ways Peronism presents an easy target for its enemies. His supporters portray Perón as a charismatic nationalist who brought social justice to the country but over the course of its history his movement has shown itself to be by turns authoritarian, violent and corrupt and displaying a devotion to realpolitik that over decades has hollowed out principles until they have become no more than shibboleths that mask ideological promiscuity in the service of power.
Initially Perón was a nationalist schooled in fascism and, along with Latin populism, the movement he founded owes a deep historical debt to the politics of 1920s Italy. As an officer in the late 1930s he was sent to Europe and there spent a year taking courses on political economy offered by Mussolini’s regime in Turin and Milan. As late as 1968 he could describe national socialism as a valid third position between Soviet socialism and yanquí imperialism. “For me, this experiment had a great historic value.” His rise to power started with a nationalist coup in 1943. As in Europe the death of the old liberal order in 1929 signalled a surge in right-wing nationalism in Argentina. With beliefs ranging from Catholic integralism to outright admiration of Hitler it never commanded mass support. But pro-Axis sentiment in the military was strong and Perón first came to office as an unknown but influential pro-Axis colonel in the secret GOU lodge of military officers. (GOU stands for Grupo de Oficiales Unidos or United Officers Group).
He was appointed to the department of labour following GOU’s successful background role in the coup. This position he used to build a support base among the unions by extending their members’ benefits. By 1945 he was strong enough to see off attempts by his comrades in the military, nervous of his rising power, to purge him from office. Within a year the unions helped elect him president. From the Casa Rosada he immediately set about creating a Mussolini-style corporatist state to reflect his vision of the organised society. Workers, employers, students, even intellectuals were all organised into government-controlled bodies with Perón then managing relations between them for the greater national good. Social justice was its banner, autarky its economic model and great power status its goal.
In many of its features the Argentina of the late 1940s was a fascist dictatorship. It had a leader who had a mystical connection with the masses, while most mediating institutions – political parties, congress, courts – were neutered. Perón’s organic view of society saw dissent as like a hand striking its own face. When the rump opposition continued to cause problems its leaders were jailed. Even his union allies were replaced by bureaucrats slavishly loyal to the leader. Authority was verticalised in the extreme and the regime’s propaganda pervasive. Though it is hard to gauge genuine support in a dictatorship Perón certainly had broad swathes of the population with him. Argentina had had a good war as demand by war-torn Europe boosted food prices for its exports. Perón had plenty of money to give away in his first years in power, which he did with what has retrospectively come to be seen as abandon. But the regime was never fully totalitarian, a fact Perón would come to regret when two of the nation’s last independent organisations – the Catholic Church and the military – would combine to bring him down.
Though his early political writings were steeped in the paranoid anti-Semitism of the far right, he also never showed any interest in racialising his regime in the Hitler manner. The appeal in fascism for him seems to have been the same as that of communism for many later Third World leaders – it seemed to offer a means of speeding up the process of development required to leave behind a shameful colonial past, dependent on foreign capital. Unlike communism, fascism offered the advantage of respecting traditions important to that part of his psyche that revered the caudillos of Argentina’s past. There was nonetheless a deeply sinister side to Perón’s fascism. One of his first actions as president was to set up, right inside the Casa Rosada, the nerve centre of a network, a real and verifiable “Odessa”, staffed by several notorious war criminals and devoted to smuggling their comrades out of Europe and away from justice. Among those who would find sanctuary were Adolf Eichmann and Josef Mengele. After the war US diplomats in the region urgently cabled Washington that the threat in the River Plate was not yet communist but remained fascist. Perón eventually fell from power because he fell out violently with the Catholic Church, in part because it sought to infringe on his political territory by organising an independent Christian Democrat party and trade union; in part because the Church was disgusted by rumours that he had taken a thirteen-year old schoolgirl as his lover.
But by the time a coup removed him in 1955 Perón was attempting an economic rapprochement with the capitalist West; he even meekly backed the CIA’s coup against the Guatemalan nationalist Jacobo Árbenz. Weakening commodity prices that came with the outbreak of peace were placing his otherwise closed system at risk. To complicate matters Argentine agricultural production was shrinking in the face of Perón’s policy of forcing farmers to sell to the state at low fixed prices, allowing it to then reap greater profits from export sales. Argentina was beginning to press its foot down on the neck of its one golden goose.
By now he had also burnt through the massive gold reserves he inherited from sales of food to Britain during the war, leaving him without the money to fund investment and the lavish welfare state he had created. The economic nationalist was now scrambling to attract foreigners to help modernise an economy that was being left behind by the rapid economic reactivation in the northern hemisphere. This reversal will not have weighed heavily with him. In his forensic survey of Argentine political thought Juan José Sebreli writes: “Perón was a man of action, not an intellectual, a pragmatist and opportunist orientated by realpolitik and not principles. He looked down on intellectuals, not only those from the opposition but also those who were Peronists, among whom he preferred the mediocre, who were more manipulable.”
But Perón, increasingly withdrawn from the bureaucratic machine he had created, preferring to spend more time with his underage lover and the reorientation of his movement, was paralysed by the time he fell from power. What followed was stalemate. The military excluded Peronism from taking a role in politics, punishing it for its populism as much as its authoritarianism, as the generals went about their efforts to liberalise the closed, corporatist economy.
Yet even in exile Perón kept a large part of the population with him. Disenfranchised, his supporters nevertheless exercised their own veto – any economic reform the military tried to carry out or forced on civilian presidents elected in rigged contests would also be illegitimate. As the 1960s drew to a close the army opted for greater repression, and was met with widespread social resistance.
From his refuge in Generalísimo Franco’s Madrid, Perón would flirt with the Montonero guerrillas, an outlandish mix of revolutionary Guevarist Marxism and Peronism whose militants hero-worshipped the memory of his demagogic wife, Evita. Riding the vogue for millenarian violence that followed the Cuban Revolution in 1959 the group had rapidly become one of the largest guerrilla organisations in Latin America. Determined to make clear to the generals who had ousted him that Argentina would be ungovernable until he returned, Perón saw the ostensibly Peronist Montoneros as another means with which to apply pressure.
The Montoneros would themselves become involved in a deadly struggle with the death-squads of the Alianza Anticomunista Argentina, organised by Perón’s sinister private secretary, José López Rega, occult adviser to his third wife, Isabel Perón, a cabaret dancer thirty-five years his junior. López Rega headed the far-right factions of Peronism, which if not as popular as the Montoneros had the advantage of operating from within the movement’s inner circle. The growing economic, social and political chaos eventually convinced the generals of Perón’s stance that only he – the so-called herbivorous lion – could find an accord. He could not. On his return in June 1973 after eighteen years away an enormous multitude went to greet him at the airport. There the ideological inconsistency of a movement that now embraced the far left and far right was laid bare as rival factions clashed in what became known as the Ezeiza Massacre. Perón would go on to expel the Montoneros from the movement, but the violent Peronist interna would continue, providing the backdrop to the military coup of 1976 which deposed the ineffectual Isabel, who had become president on the caudillo’s death in 1974, despite lacking a single qualification bar her married name.
The dictatorship that followed marks a clear break in Argentina’s history. The military extinguished any dream of armed revolution. But the brutality with which it did so, added to its inability in Las Malvinas to carry out with a modicum of competence its raison d’être – wage war – and a disastrous mishandling of the economy all forced it back to barracks after more than half a century’s interference in the country’s political life.
With the return of democracy in 1983, Peronism did attempt to transform itself into a modern political party. But in this task it has been only partially successful. Though the intolerance of the 1940s and 1970s is now gone it remains a movement that is too often reflexively hostile to even mild opposition. In the years it has been out of power since democracy’s return it has shown little concept of the responsibilities of opposition. With the Peronist chaos of the 1970s still fresh in voters’ minds the party lost its first presidential election in 1983 when the Radical candidate, Raúl Alfonsín, swept into power. With the country broke, Alfonsín argued for the need to privatise some of the bloated, inefficient state enterprises. But the Peronists used their control of the senate to block any such move as the economy once again drifted onto the rocks.
Economic paralysis produced hyperinflation and food riots and Alfonsín was forced to resign early, only to see his Peronist successor – Carlos Menem ‑ abandon all his electoral pledges and sell off everything he could get his hands on once in the Casa Rosada. There also exist numerous eye-witness reports suggesting Peronist ward bosses in the conurbano rustbelt that rings Buenos Aires stirred up the food riots that helped trigger the fall of the weak-willed and probably already doomed Radical president Fernando de la Rua in the fateful month of December 2001.
In power Peronism retains a strong authoritarian streak, in keeping with the tradition of its founder. The three Peronists elected president since the return of democracy ‑ Menem, Néstor Kirchner and his wife, Cristina ‑ have all favoured ruling by emergency powers passed to cope with economic crises but then retained and used far beyond their original intended remit. Like Perón, both Menem and the Kirchners have reshaped the judiciary, appointing their own supreme courts, and neutered congress in order to further executive power at the expense of the other two branches of government. The opposition is fragmented or has been bought off. Though it can gain some regional traction it is completely absent as a meaningful force at national level. It is a damning commentary on its weakness that the main threat to President Cristina Kirchner today comes from the dissident Peronist governors of key provinces. Peronism is now its own opposition, to the detriment of other parties.
So weak indeed is opposition that Peronism has been able to elevate its internal feuding to the national level, secure in the knowledge that such divisions will not provide an opening for those who do not share the faith. In 2003 President Kirchner’s now deceased husband, Néstor, bested Menem in the presidential contest for the Casa Rosada. In total three Peronist candidates took over 60 per cent of the vote, crowding out the rest of the field. Argentina is far from being a one-party state, but at a national level it only has one meaningful party.
Today the government of Cristina Kirchner actively works to economically and judicially undermine critical elements of the media and the local financial sector. Meanwhile the public school system – a century ago one of the best in the world and the backbone of a highly literate society – has become utterly dysfunctional. In recent international test scores its students have even slipped behind Brazil, once the continent’s illiterate and innumerate giant. Perhaps this explains the increasing official disdain for inconvenient facts and figures – whether Perón’s sheltering of Nazi war criminals or high inflation figures – which are now simply erased or rewritten so as to please the Casa Rosada.
Ideology is not a driving force in Argentine politicals. Though members of the same party, Menem and the Kirchners drifted to the opposite extremes of the two main ideological currents that have dominated in South America over the last two decades. In the era of the Washington Consensus that defined the 1990s, Menem became the arch neo-liberal, privatising the state industries that formed the backbone of the closed, corporatist state. As the continent swung left after the millennium the Kirchners have aggressively sought to rebuild the state’s leverage over the economy. Menem spoke of Argentina joining NATO. The Kirchners have forged a close alliance with Hugo Chávez’s Bolivarian Revolution in Venezuela.
Each could find justification in Perón’s own ideologically fluid past. Beyond these differences one can perceive the old Peronist pragmatism of cutting one’s coat to suit the cloth, the realpolitik Sebreli identified in Perón. Neo-liberalism was forced on Menem, the firebrand populist whose extravagant sideburns honoured the nineteenth century caudillo Facundo Quiroga: he was left little choice by the debt and hyperinflation crises of the early 1990s at a time when the collapse of the Soviet Union seemed to signal the final triumph of capitalism.
The Kirchners’ rebuilding of a more macho state has been funded by the unexpected bounty provided by Chinese-driven demand for the country’s soy, while the alliance with Caracas derives more from Chávez’s willingness to buy Argentine government paper when no one else would than from any affinity for the Bolivarian Revolution. In many ways the Kirchner economic model is a return to the broken one of the second half of the twentieth century, with an inefficient, uncompetitive but protected industrial sector which is dependent on a captive domestic market while the state pads out employment rolls, adding on average 377 public workers a day since 2003. Around fifty per cent of the population is now estimated to be directly or indirectly dependent on the state for an income, whether they be civil servants, pensioners or the poor enrolled on social programmes.
But whereas in the past this system’s need for imported inputs caused balance of payment crises and sparked the devaluations and inflations that over decades whittled away the country’s wealth, today the government has ready access to cash thanks to the super-cycle in food and feed ‑ especially soy ‑ prices that has gripped markets since the turn of the millennium. One local analyst likens the positive fiscal shock to an annual Marshall Plan “with no questions asked”.
The Kirchners have sought to aggressively tax the agricultural sector, sparking a major confrontation with farmers in 2008 which led to the defeat of attempts to increase even further taxes on soy exports. Even so, true to Peronist traditions they have overseen a major transfer of wealth from the politically weak but wealthy agricultural sector to the cities. Though they have trumpeted their redistributive policies as crucial in reducing the catastrophic poverty of 2001 and 2002 a major beneficiary is an often ungrateful middle class which benefits disproportionally from the energy and transport subsidies that now riddle the economy. Attempts to keep low the prices of food consumed locally – such as wheat and beef – have seen a slow stampede by farmers into the soy sector. With little local consumption this is less subject to arbitrary government interference, even if steeply taxed. The result is a shrinking of the national herd and farmers planting fewer non-soy crops. This risks an overconcentration of a key revenue stream in one agricultural product.
With formal import tariffs readily questioned at the World Trade Organisation, Argentina has since the 2001 crash adopted a neo-mercantilist policy which holds down the value of the peso to favour exports and inhibit imports, though the government increasingly favours wildcat restrictions on goods coming from an increasingly frustrated Brazil, supposedly its principal partner in the Mercosur common market. The peso now trades below four to the dollar in a policy that is the reverse of the one-peso-one-dollar of the Menem era. Menem’s strong peg was designed to combat hyperinflation. It succeeded but strangled growth by making imports cheap and exports uncompetitive. Now with the weak shadow-peg, growth is roaring along at Chinese rates. But with it, the old enemy, inflation, has returned, fuelling a consumer boom but scaring off the investment needed to sustain it. There is no shortage of economists warning that this is not sustainable. Underpinning the model is foreign demand for produce from the pampa – a potential bust should the multi-decade super-cycle promised by analysts run into the cyclical turbulence that is so natural to agricultural markets.
This would be problematic, as Peronism remains addicted to spending money. Menem lavishly spread it around for political gain. His huge misjudgement was borrowing abroad to do so, eventually bankrupting the state. The Kirchners find financing closer to home in the rural sector. But spending keeps heading north and the large primary budget surpluses of the early years of kirchnerismo have disappeared. Meanwhile both Menem and the Kirchners have overseen carnivals of corruption which is now endemic in the country: only Indonesia and Russia rank as more corrupt among the G20 economies. Under Menem corruption took on a gothic character. His in-laws were accused of laundering money for drug cartels. Many Argentines believe his son’s death in a helicopter crash in 1995 was a settling of accounts in the criminal underworld. Such was the dark aura that surrounded him, many considered it unlucky to utter the president’s name and instead took to referring to him as Mendez.
One of the most emblematic cases of the Menem era was the 1995 explosion at a munitions factory that killed seven people and practically destroyed the town of Río Tercero. Menem and seventeen others were accused of being part of a plot that deliberately blew up the plant to cover up its role in UN sanctions-busting arms sales to Croatia and to Ecuador. After leaving office Menem was detained for six months as prosecutors continued their investigations. When Néstor Kirchner was sworn in as president in 2003 he promised an end to the impunity of the Menem era. One of Menem’s ministers was indeed jailed and Menem’s arrest sought in connection to alleged kickbacks paid in a prison building programme.
But back in 2003 Menem was a rival within Peronism; today he is an ally, loyally supporting Cristina Kirchner in the senate. She is also backing him as he runs for re-election as senator for La Rioja this October. Such accords by politicians who at first glance appear to be ideological enemies should come as no surprise: Néstor Kirchner was a loyal Peronist governor during Menem’s presidency. Corruption charges against Menem are melting away and a court has now, sixteen years after the explosion, voted to absolve him in the Río Tercera case. It remains to be seen on what grounds the judges plan to dismiss but the control over large swathes of the judiciary by President Kirchner means her opponents and many in the media suspect Menem is being granted a political absolution.
Such suspicions are grounded in experience. In another emblematic – this time Kirchner – corruption case a judge refuses to release information to the state’s auditor about a high-profile human rights group allied to Mrs Kirchner that stands accused of embezzling state funds. Since the Kirchners came to power, the Association of the Mothers of the Plaza de Mayo, a radical offshoot of the mothers who campaigned for information about their children “disappeared” by the last military dictatorship, has received large sums in public funding for its social programmes. In return its leader, Hebe de Bonafini, has become one of the most strident defenders of the Kirchners against critics – media, farmers, the Catholic Church – that she labels part of the same oligarchy that killed her two sons. But now the association’s former manager is facing charges that he creamed off funds to buy a mansion and fly around in a private jet. He has retaliated by claiming that association money was embezzled in order to fund the political campaigns of kirchnerista candidates, including Mrs Kirchner’s vice-presidential candidate in October’s election, whose luxury condo in Buenos Aires has raised eyebrows in the press. The spiralling number of corruption accusations in the media, congress and courts reinforces suspicions that that corruption under the Kirchners has outstripped even that of the Menem era. Meanwhile the Kirchners state in official filings with the country’s anti-corruption body that the family’s fortune has increased 700 per cent since Néstor ascended to the presidency in 2003 ‑ thanks to smart management by their thirty-four-year old son, Máximo.
Such is populism today in South America. But several caveats are necessary when discussing Peronism. Firstly it did not introduce populism into Argentina. This dubious honour goes to Peronism’s historic rival and occasional ally, the Radical Party. It was Hipólito Irigoyen, the first president elected by obligatory universal (male) ballot in 1916, who first used several of the central tropes of populism.
Irigoyen saw the state’s bureaucracy as a means of strengthening his political machine and political appointments expanded dramatically during his two presidencies. Though a very different kind of leader, Irigoyen shared Perón’s organic view of society and saw the Radicals not as a political party but a national movement whose opponents were therefore enemies of the people. This justified his harsh repression of strikes even as a strident anti-imperialism was introduced into public discourse. Because Irigoyen was the country’s first democratically elected president, and later deposed by the country’s first military coup in 1930, he has a poorly deserved reputation as exemplary democrat. In fact, he and his allies spent years plotting armed insurrections against the liberal oligarchy which controlled political and economic life before conceding free elections. Then during his two presidencies he showed his own alarmingly authoritarian tendencies, using frequent and controversial federal intervention in the provinces to undermine opponents.
Though he did not create the dictatorship seen by critics he did seek to create a hyper-presidency. This contributed to his fall. Even Félix Luna, one of Argentina’s great twentieth century public historians, a Radical and admirer of Irigoyen, admitted that certain elements of irigoyenismo constituted a fascism avant la lettre. Perón was drawing on this older tradition. When he first appeared on the national stage his supporters sought to portray him as a new Irigoyen and many early Perón supporters were themselves Radicals disillusioned by the party’s malaise after the coup. As the Peronist deputy Oscar Albrieu told congress in 1946: “If we were in the year 1916 we would all be irigoyenistas … in the year 1945, we are all peronistas.” A second caveat is that while Perón intensified authoritarianism in Argentina he by no means overthrew a democracy. The last democratically elected president to serve out his term before Menem in the 1990s was the patrician Radical Marcelo T De Alvear who ruled between 1922 and 1928, sandwiched in between Irigoyen’s two terms.
Following Irigoyen’s downfall in 1930, the Infamous Decade, which ran until 1943, marked a return to the oligarchic rule which had supposedly ended with the Radicals’ victory in 1916. During these years the elite returned to maintaining control via rigged elections from which the military guaranteed the exclusion of the Radicals. Though in many respects the governments of the 1930s were successful, they created a dangerous precedent: the idea on the right that undesirable political forces who garnered public support through crude populism could be excluded by force. In the 1930s it was the Radicals who suffered, in the 1950s and ’60s Peronism: the result was insufficiently legitimate governments and repeated institutional crises. The preferred solution of the right was a series of coups intensifying in repression through the decades until the criminal brutality of the Proceso de Reorganización Nacional launched by the junta which deposed Isabel Perón in 1976.
If the right came to lean heavily on the military it was because of one striking feature in Argentina’s modern history: the failure of the oligarchy, elite, right-wing – however we identify the country’s conservative interest – to build a democratic alternative to the populism of the Radicals and Peronists. The left, in the form of the Socialists, had been a significant political force until working class support for Peronism pushed it to the margins. But even before Perón’s emergence the right was little interested in building a democratic mandate. As 1930 showed, it preferred the military to put right what the population got wrong at the ballot box.
But its governing methodology would leave a deep imprint on the populist leaders of the mass movements. Prior to the Radicals breaking its political monopoly, the landed elite used its control of the presidency to fix elections and discipline society’s political actors. Power was built out from the presidency in an oligarchic system known as the unicato. Perón may have been a dictator but he instinctively understood that the twentieth century would belong to the masses. He did not seek to give them democracy but he gave them much else – full employment, rising real wages, the chance of a university education for their children as well as new national myths of greatness in which people felt they had a role. He created a more modern, populist unicato and it lives on in the Kirchner unicato of today where power is concentrated in and flows out from the Casa Rosada.
The oligarchy, by tradition linked to the land but over the last century branching out into industry, failed to engage with mass movement politics. Its mentality was deeply colonial. Except in Santa Fe province, the pampa húmeda was developed by large landowners. As they owned the land they controlled the government and the access to cheap credit that went with power. There was no tradition, as on the US or Canadian plains, of the sturdy homesteader. With the great wealth of the land highly concentrated, immigrants had to make a precarious living as sharecroppers. Even over a century after independence from Spain, and despite the appearance of modernity, Argentina remained a deeply colonial society and Perón was able to tap into deep wells of resentment against its privileged class. That cruel diviner of harsh truths VS Naipaul wrote in his book report on Argentina, The Return of Eva Perón: “Peronism was never a programme. It was an insurrection.”
Argentina in the period in between two huge booms of soft commodity prices that bookend the last century failed to find an alternative destiny for itself. It is only the providential upswing in commodity prices that has helped it claw its way out of the abyss into which it fell in 2001. And still the old tensions remain. Today a Peronist president once again battles the landed interest for control of the pampa’s great wealth. Ragged, unsure of its banners and badly led it may be, but the Peronist insurrection continues.
Tom Hennigan is the South America correspondent of The Irish Times and is based in São Paulo, Brazil.
