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OPINION AND ANALYSIS | 02-03-2024 05:01

Politicians in the dog house

Business, especially big business, has long had a bad press in Argentina. This is partly due to the willingness of politicians to blame it for their own failures, as happens whenever inflation gets out of hand.

Though most politicians and businessmen make out that they greatly respect one another, the relationship between the two tribes has never been particularly easy. Even those who switch sides are quick to adopt the attitudes prevailing in the one they have just joined. Politicians say that they represent the will of the people and therefore should always have the last word, while businessmen remind them that were it not for them everybody would go hungry, so governments would be well advised to give in to whatever they demand. This, by and large, is what the US “tech giants” are up to not just in their home country but also in Europe, where politicians are determined to bring them to heel but fear losing the phenomenal amounts of money such companies generate.

On a far smaller scale, a broadly similar conflict is taking place in Argentina, where the politicians have long had the upper hand and used it to beat the business community into submission which, needless to say, has had appalling consequences for the country as a whole. Though on occasion President Javier Milei says he is not that fond of businessmen as people, his disclaimers do not mean very much. He wants to take power away from the politicians and give it to the markets, which is what businessmen, with the exception of devotees of crony capitalism, would very much like to see happen.

Hard as it may be for many politicians to understand, unless they step aside and let the markets, that is businessmen, do their stuff, Argentina will never recover from her many self-inflicted wounds. State enterprises are simply unable to produce the goods and perform services in sufficient quantities to make a country prosperous. Milei’s principal aim is to provide an environment in which the private sector can flourish. Until this happens, politicians who are accustomed to calling all the shots, will have to take a back seat.

This, presumably, is why Milei devotes so much time and effort to attacking them for their contribution to Argentina’s fall from grace and their refusal to grovel before him. His strategy is not without risks. Over the years, politicians or one kind or another have committed so many misdemeanours that they are desperately trying to block investigations into the schemes designed to provide them with the enviable incomes they think they deserve. Many would like to see their tormentor overthrown.

When democracy was reinstalled back in December 1983, one of the first things most legislators did was vote themselves a big pay rise. They said that unless they were properly rewarded for their services, people would look down on them, which would be bad for democracy. They had a point. It is taken for granted not just here but also in most other countries that the incomes of legislators should at least match those of mid-level professionals and private-sector executives, if only because it would make them less inclined to take bribes.

However, as politicians were well aware that it would not be in their collective interest to give voters the impression that they were in it for the money, they settled for fairly modest increases. After all, they knew they could supplement them with the many perks of office few outsiders took much notice of. As time went by, these perks increased in number and size and, because some looked decidedly dodgy, the gap narrowed between what was legally plausible and what was undeniably corrupt. This is where we are today. Though in recent years Argentina has grown poorer, most politicians seem to be far better-off than they once were. It was thanks to their apparent immunity to the economic blight that has made life miserable for much of the population that Milei’s attacks on the “political caste” proved effective enough to win him the Presidency.

Are Argentina’s politicians greedier than their counterparts elsewhere? There is no particular reason to think so. In the United States, many have contrived to become uncommonly wealthy by making good use of their contacts and influence. What is undeniable is that Argentina’s governments have been far less efficient than those of most other Western countries, a deficiency that can be attributed to their adhesion to anti-capitalistic ideas that in most places were cast aside over half a century ago.

This is why Milei and his backers such as Mauricio Macri think that what Argentina desperately needs is a “cultural revolution.” Like Ronald Reagan in his day, they believe that far too many people still expect the state to provide solutions to their problems when all it does is make them worse. Of course, it can be argued that for this to change the existing state – which is stuffed full of political appointees and people hired because nobody else would dream of employing them – should be radically reformed on remorselessly elitist and meritocratic lines, but even that would not make much of a difference unless it were accompanied by a far stronger private sector than the one the country now has.

Business, especially big business, has long had a bad press in Argentina. This is partly due to the willingness of politicians to blame it for their own failures, as happens whenever inflation gets out of hand. As far as the Kirchnerites, leftists and many Radicals are concerned, prices keep rising because Argentine manufacturers and shopkeepers are a uniquely rapacious lot who, unlike their equivalents in almost every other country in the world, subordinate absolutely everything else to their own short-term interests. Politicians who apparently believe in this nonsense tell people they are shielding them from the insane voracity of price-gouging businessmen eager to feast on their corpses. Until quite recently, they believed that their allegedly altruistic defence of consumers they said were being mugged by supermarket owners helped them win election after election, but then, to widespread surprise, millions of once loyal voters decided that enough was enough.

When campaigning, Milei swore that the ferocious austerity programme he had in mind would be much more painful for the “political caste” than for the rest of the population. This turned out to be a half-truth at best. Though he has begun to deprive politicians of many sources of income that up to now they have kept far from public view, most have enough stashed away to make it easier for them to get along without it than it is for others; for many, what to the comfortably off would be a relatively small cut in income can be catastrophic. Unless Milei is careful, such victims of austerity could renew their faith in the discredited “caste” that did so much to impoverish the country and would very much like things to remain as they are.

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James Neilson

James Neilson

Former editor of the Buenos Aires Herald (1979-1986).

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