Wednesday, September 22, 2021

OPINION AND ANALYSIS | 30-11-2019 11:39

The long war against capital is coming to a triumphant end

These days most Peronists, including Alberto Fernández, would very much like to see “capital” return to the country from which they banished it, but such is the state of the economy that getting it to do so will be anything but easy.

Whenever the occasion demands it, which is fairly often, the Peronist faithful bellow out their movement’s stirring anthem to remind us that their late caudillo was a great man who won people’s hearts by fighting against “capital,” that is to say, money or, by extension, the capitalist system. Despite the efforts of Juan Doming Perón himself and most of his successors to make it clear that they preferred free markets to the available alternatives, their followers have continued to wage a highly successful campaign against “capital.” As a result, Argentina has been rolling downhill for the best part of three-quarters of a century. Needless to say, the hardest-hit by their exploits in this domain have been the people who provide them with the votes they need to win power or, at least, to prevent anyone else from governing properly.

These days most Peronists, including Alberto Fernández, would very much like to see “capital” return to the country from which they banished it, but such is the state of the economy that getting it to do so will be anything but easy. For this to happen, they would have to adopt policies which would be far more “right-wing” than the ones tried, with scant success, by Mauricio Macri.

Like their counterparts in many other parts of the world, the Peronists who are about to take over have grown accustomed to blaming the country’s economic and social woes on austerity and suggesting that if the government took a less stingy approach, consumption would pick up, thereby giving production a boost and making the economic wheels spin faster and faster. In opposition or when on the campaign trail such notions are appealing, but once in office, those who say they are determined to put them to the test must face the risk that before too long an inflationary tsunami could sweep away all that has been gained and make matters even worse than they were before.

Peronists are notoriously fond of wielding power and enjoying the benefits that come with it, but by nature theirs is an opposition movement whose adherents like nothing better than protesting against the way things are. This makes it difficult for them to govern in a sensible manner. Even when their leader feels strong enough to take no notice of what dissident Peronists have to say, as was the case when Carlos Menem was president, officeholders must be careful not to tread on too many toes.

To judge by his personal record, Alberto is at heart a centrist who must be aware that it would be suicidal for him to go on a spending spree in an inevitably vain attempt to remain true to his campaign promises. Unfortunately for him, his partner, Cristina Fernández de Kirchner, is a strong-minded lady who has her own trenchant views on what should or should not be done.

Does Cristina own him? This is a question many are asking. If the answer is yes, the next few months could be hair-raising. According to the standard logic, Alberto should do his utmost to get all the dirty work over and done with as soon as is humanly possible, but there are many Kirchnerites (and presumably Cristina is one) who are more interested in proving ideological points that are dear to them than in preventing the economy from sliding into an abyss alongside Venezuela’s. Such people are unlikely to take kindly to an eventual decision by Alberto to apply what would be derided as “orthodox” measures in an effort to prevent the country from going under.

Since the first generation of Peronists declared war on “capital,” Argentina’s economic performance has been worse far than those of any non-Communist country or a handful of African basket cases. No doubt most Peronists would like to see the country change course, but once it started going down the road that took it to where it is now, deviating even slightly from it became increasingly difficult.

The way things are, it looks as though nothing less than a catastrophe comparable to Venezuela’s would be enough to make the country’s politicians – the surviving ones, that is – pull themselves together and get serious. Let us hope this is overstating the problems the incoming government will face, as the outgoing one had to after the markets let it know that “gradualism” was for the birds, but the omens are grim.

Managing Argentina’s economy is like wrestling a herd of greased pigs. As soon as one frantically squirming animal is finally pinned down, others start running amok, snorting wildly and ramming themselves against you. This is because just about everybody, including the politicians themselves, are convinced they deserve far more than they are getting and are more than prepared to fight for it. To keep them more or less happy, Alberto would have to dole out large sums of money to the organised bands of “pickets” who enjoy staging threatening rallies in the centre of Buenos Aires, spend even more on the welfare schemes millions of people depend on, make sure pensioners are not left too far behind, satisfy the demands of provincial governors, pay off belligerent trade union bosses such as the lorry drivers’ Hugo Moyano who, if so minded, could bring the country to a halt in a couple of days, maintain the bloated bureaucracies that have grown mightily in recent decades and much else besides.

All this would take money, plenty of it, but there is hardly any to be found. As many have taken to reminding us, when in similar straits Menem could flog off public monopolies or the right to replace them, Néstor Kirchner took over when, when, thanks to China, the price of soybeans and other commodities was sky-high, and for a while Macri could rely on the willingness of foreigners, among them the folk in charge of the International Monetary Fund, to give him a break. In contrast, Alberto has no public companies he can auction off, commodity prices are languishing and his credit rating could hardly be worse.

As a result of all this, the prospects confronting the latest in a long line of Peronist governments look decidedly bleak. If they were still among us, the spiritual forefathers of the current crop would be congratulating themselves for starting the successful war against “capital” that has now entered its final mopping-up stages. Alberto and his supporters would be most unlikely to join their celebrations, but Cristina and many of her more enthusiastic devotees would surely feel tempted to do so.

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James Neilson

James Neilson

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


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