[Militant No. 603, 28th May 1982, p. 8-9]
By Lynn Walsh
Galtieri launched his expedition to seize the Falklands in an attempt to escape from the consequences of Argentina’s profound social crisis.
Despite the regime’s dictatorial powers, which have been used to crush trade union rights and imprison and torture the regime’s opponents, the military rulers have not been able to cure Argentinian capitalism’s dire economic problems.
Galtieri’s Economic Minister, Dr. Juan Alemann, has been no more successful than his predecessor, Sr. Martinez de Hoz, who served as Economic Minister under General Videla. Alemann, a hard-line monetarist, has continued Hoz’s policy of ‘liberalising’ the economy. In practice, this has meant ruthless cuts in government spending, particularly hitting social spending. State-controlled enterprises have been ‘hived off’ to private interests on a massive scale.
Nearly all restrictions on ‘freedom of enterprise’, particularly restrictions on the movement of capital, have been removed – turning the economy into a paradise for financiers, speculators, and grasping middle-men of every kind.
Millions of workers in the depths of poverty
The country, in fact, has become a kind of casino – a casino where the rich are guaranteed to win ever increasing prizes, while wage earners and the poor are guaranteed to lose. Millions of workers and unemployed have been pushed down into the depths of poverty.
One ‘liberalising’ measure alone, the introduction of dual exchange rates (one for ‘trade’ and one for ‘finance’), has allowed speculators to make millions of dollars in profits.
Alemann abolished price controls on food and other necessities, thus removing the minimal protection for workers and the poor. They are now fully exposed to the ravages of inflation. This went down to a ‘low point’ of 87.6% under Hoz in 1980, but rapidly accelerated to well over 100% in 1981. Inflation is still rising – it is now thought to be over 150% – and has been given a new twist by the continued devaluation of the peso.
Alemann has also frozen wages and pensions in the public sector, as well as increasing fuel prices. When he was asked whether these draconian measures might not provoke social unrest, Alemann simply replied: “this is a strong government.”
Another journalist asked him how wage earners could survive in the face of hyper-inflation. The government, Alemann replied, could not “take account of the personal problems of each and every individual”!
Such was the combined weight of millions and millions of ‘personal’ problems, however, that a new process of social convulsion and revolutionary crisis was in motion when Galtieri decided on the Falklands adventure.
With fabulous opportunities for speculative profits, Argentinian capitalists have little incentive to invest in production. Investment fell by 22% last year. The Gross National Product declined by 6%, and industrial output by 14%.
As production has declined, moreover, the country’s foreign debts have risen enormously. Argentina now owes an estimated $34,600 million (£19,450m) to foreign banks.
The biggest share is owed to American banks ($8,600m or £5,050m). But $5,800 million is outstanding to British banks. With a population 9 million less than Poland, Argentina owes $5,000 million more.
It is for this reason that finance-capital in both America and Britain has been reluctant to see the implementation of effective economic sanctions. A default by Argentina – a declaration that it is unable to find the cash to service its debt, about $7,000 million this year – would send a horrifying shock wave throughout world capitalism’s financial and banking system.
All the major Latin American economies have suffered from a recession in the last few years. But none has suffered from such a decline as Argentina.
Argentina’s wealth squandered
In 1931, hard as it may now be to believe it, Argentina was the 8th richest nation in the world in terms of per capita income. It was richer than Canada, or New Zealand, and its natural resources seemed to promise the country a prosperous future.
By 1961, however, Argentina had dropped to 27th place. By 1980 it had declined to 65th place, according to World Bank figures.
Clearly, the Argentinian ruling class have squandered the country’s enormous agricultural, mineral and industrial resources. Potentially an enormously wealthy country, Argentina has degenerated under the weight of capitalist corruption, speculation, and mismanagement.
This, however, does not justify the conclusion drawn by some on the left (who claim to be Marxists), that Argentina’s capitalist class is merely a class of compradors, and the country still has the position of a totally dependent, semi-colonial state.
This spurious analysis is put forward to justify support for Argentina – in fact, uncritical support for Argentina’s dictatorship – against British imperialism.
A comprador capitalism is one dominated by the brokers of foreign capital and merchants who act as the local agents of big business based in the metropolitan capitalist states. They are tied to the traditional ruling class, based on landlordism, and invariably put obstacles in the way of indigenous capitalist development, which would be a threat to their position.
Comprador comes from the Portuguese word for buyer. But it is China toward the end of the nineteenth and early this century which provides the classic example.
The compradors, the heads of British, French, and other foreign business houses, tended to dominate China’s economic life. An embryonic native capitalist class attempted to clear the path for its own national development. But it was economically feeble, and politically ham-strung by its fear of China’s relatively small but significant working class which put forward its own revolutionary working class demands in 1925-27. It was this that explained the inability of the national capitalists, under the Bonapartist leadership of Chiang Kai-shek, to carry through a land reform, expel the Japanese imperialists, and achieve national unity and independence. There are still many cases of comprador capitalism in the under-developed countries, in states which are no longer colonies but are still dominated economically by imperialism in a ‘neo-colonial’ relationship.
In such colonial or semi-colonial countries, a national struggle against an imperialist power is inevitably linked to the struggle of the peasantry against landlordism. Marxists would support a national struggle against imperialism. But they would only give critical support to a national capitalist, or capitalist Bonapartist leadership – while demanding the expropriation of the landlords and the taking over of industry by the working class.
In the case of an attempt by American imperialism – or British imperialism, if that can be imagined – to subjugate Argentina, putting it under direct colonial domination, Marxists would support a national struggle against imperialism. But at the same time, Marxists would stand for the independent organisation of the working class on the basis of a socialist programme. This is the only way in which imperialism could be defeated and a genuine national liberation achieved.
However, the attempt by some pseudo-Marxists to portray Argentina as a semi-colonial country, dominated by a comprador class is absurd.
It is true that for more than a century the country has been dominated by an oligarchy of big pampas farmers. However, from the beginning – when they forced out, and partly exterminated the indigenous Indian population – they were capitalist farmers, producing cash crops for the home and especially the world market, and employing wage labour. Most of them are now highly mechanised agricultural producers.
At the end of the nineteenth century and the beginning of the twentieth century, the big farmers branched out into industry. Inevitably, this was in alliance with foreign capital, which has always played a major role in the development of Argentina. Nevertheless, Argentina has developed into a semi-industrialised country, with its own industrial capitalist class and also a developed finance-capital of its own.
Under Perón’s regime from 1946 to 1952, there was a policy of developing Argentine industry behind a wall of protective tariffs. This was helped by the rise in world commodity prices, and the continued demand for grain and meat from America and Western Europe.
This policy was met with opposition from the traditional agricultural capitalists, with whom the army’s officer caste was closely allied. However, Perón’s policy of concessions to the working class and the implementation of social reforms on the basis of industrial development, secured him the support of the majority of the labour movement, and gave rise to the Peronist tradition that continues today.
After the army ousted Perón in 1952, there was a return to policies which favoured the big capitalist farmers and the financiers and speculators with whom they are linked.
The return of Perón in 1973
After two decades of dictatorship, however, the undermining of Lanusse’s military government opened the way to new elections, with the election in 1973 of Hector Campora as president – paving the way for the return of Perón.
The memory of gains under Perón’s government made the Peronist organisation the main channel of working class opposition. But Perón’s political resurrection took place under entirely different conditions, with the world economy slipping into recession and a sharp ending of the contradictions within the country.
Perón came back on an enormous wave of strikes and demonstrations, as the workers strive to find a way to change the system. But Perón could neither revitalise the economy, not give significant concessions to the working class. Disillusionment inevitably set in, while the old oligarchy and the officer caste prepared to take their revenge.
Perón died in 1974 and his second wife took over, only to be deposed by the 1976 coup which established the present regime. Within the rotten framework of capitalism, there were no solutions, especially after the 1974-75 recession which marked the end of the long post-war upswing.
Because of traditional loyalties, however, Peronism still remains a force, and when the military falls the workers’ movement may well be dominated once again by Peronist leaders. Yet unless the working class is armed with a Marxist programme and perspective, Argentina will be doomed to go through another phase of the terrible cycle of popular upsurge and military reaction. Only the working class, mobilising independently under a Marxist leadership, can find a way out.
Since the return of the military in 1976, Argentinian capitalism has proved incapable of further industrial development. Ruinous speculation has been the order of the day, with the mushrooming of the country’s foreign debts. Clearly, Argentine capitalism is in hock to the bankers of the metropolitan capitalist countries. But this does not mean that Argentina has returned to a position of comprador dependency! A few crucial statistics reveal the absurdity of this position.
In 1977, industry accounted for 45% of GNP, compared to 13% for agriculture (and 42% for services). Manufactured goods, it is true, account for only 22.7% of the country’s exports, compared to 65.5% for food and agriculture, which reflects the inability of Argentine industry to compete on world markets.
However, the urban population now accounts for over 82% of the total population. 29% of the active population work in industry, compared to only 14% in agriculture (57% work in the enormous service sector).
In other words, Argentina, despite its continued neo-colonialist subservience to American, West European and Japanese big business, nevertheless has the characteristics of a semi-industrialised, capitalist economy – dominated by its own capitalist class.
Falklands adventure to stave off revolution
There is, in fact, an imperialistic element in Argentinian capitalism’s claim to the Falklands. This has brought them into collision with British imperialism, an enfeebled and decrepit power compared to the past, but still more powerful economically and militarily than Argentina.
Galtieri invaded the Islands for political reasons, to stave off the threat of revolution. But in the background are the greedy ambitions of the Argentinian magnates, who would like to augment their income by the exploitation of Antarctica’s natural resources. They could only do this, however, as a junior partner of foreign capital. Most likely, it would be in conjunction with the American multinationals, which have the technical and financial resources needed to harvest the wealth of the polar region.
Argentina is at a contradictory, half-way stage of capitalist development. By the standards of the under-developed countries, it is a relatively powerful, industrialised capitalism with its own expansionist aims. Nevertheless, compared to the giants of the capitalist West, particularly the United States, it is still locked into a position of neo-colonial dependency – from which it will not escape in a period of world capitalist decline.
The Argentine capitalists, however, are acutely aware that the main threat to their rule will come, not from rival capitalist powers, but from the proletariat created by the development of industry.
The Argentinian working class is the largest in South America and within it are the most active seeds of change. It is because a new generation of workers have begun to flex their muscles in the face of ferocious repression that Galtieri’s regime felt threatened – and decided to embark on the Falklands adventure.
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