Argentina: capitalism fails, again

January 20, 2002 -- Widespread protests in Argentina continue as the people express their disgust with a political system that has changed presidents 5 times in the past month but offers nothing but a new face on the same old shit. As of this date President Eduardo Duhalde announced new economic measures that he hopes will save the country from economic chaos. But so far the new measures have just meant more hardships for more and more people. Protestors have attacked banks, marched on government buildings, and clashed with police. Thousands of people in Buenos Aires banged pots and pans and cut off traffic on major roads to demand access to frozen savings accounts. Riot police disbursed the crowds by firing tear gas and rubber bullets.(3) Similar road blocks took place throughout the country with police violently removing demonstrators. Many blocking roads were demanding jobs, or for those with jobs, demanding payment of their wages.(4) These protests included the poor and the middle class, both of which were hit hard by economic austerity policies. Argentina currently faces 18% unemployment. Private sector wages have been cut by 20%, and state pensions and wages above $500 were cut by 13%.(1) A third of the population of 36 million faces poverty.(2) The petit-bourgeoisie is upset because the government has frozen their savings accounts has been frozen and placed limitations on cash withdrawals. Argentina is facing a crisis created by the contradictions of capitalism and it cannot be solved within the capitalist system. For instance, if the banking restrictions are removed everyone will try to withdraw their money leading to a collapse of the financial system. But if the restrictions stay there will be no cash in the economy, and workers will not get paid.

Why economic failure?

The capitalist political pundits say that it is "poor economic decisions and political instability" that caused Argentina's fall from the 10th richest country in the world in 1913 to the 36th in 1998.(1). To the extent that the poor economic decisions were made by lackeys following imperialist economic "advice," these pundits are correct. Argentina's $132 billion debt (roughly one seventh of all debt held by Third World countries) is the result of heavy reliance on imperialist financing in the form of loans from the IMF and other international finance capitalists.(1) In fact this financing generally leads Third World countries into economic dependence and poverty, a situation that benefits the imperialists and their lackeys running the Third World countries, while punishing the majority of the people in those countries. Since the 1980s many Third World countries have taken out huge loans from the U.$., England, Japan, and other imperialist countries as well as the International Monetary Fund (IMF) and World Bank (WB) which are essentially acting as banks run by the imperialists. These loans far exceeded the countries' capacity to repay. MIM argues that it is the imperialists who have stolen from the rest of the world that owe reparations, not that the majority of the world should owe imperialists for loans taken out in efforts to rebuild from imperialist plunder. About half the debt of Third World countries is owed directly to the imperialist governments of the U.$., Britain, Canada, France, Germany and Italy (the G7). Most of the rest is owed to the IMF and World Bank. About 10% is owed to private banks.(5) Capitalist financial analysts are full of contradictory advice about what Argentina should do to get out of the current economic crisis. But it should be clear to any student of history that these crises repeat throughout the capitalist world. The real solution for these problems is communism. In fact, while the great depression ravaged the economies of capitalist countries throughout the world in the 1920s, in the socialist USSR the economy remained remarkably stable and growing. This is because socialism means a planned economy, not subject to the anarchy of capitalist production and overproduction. When it is possible to determine exactly how much food is needed the capitalists still have farmers dumping food in the ocean to maintain their profits. This illogical system will obviously lead to crises of overproduction, depression and economic collapse.

The Peronists and the Argentine government

The Peronists often put forward a face of populism and many imperialist analysts talk about their welfare state as something resembling socialism. Some economic analysts blame the failure of Argentina's economy on this so-called welfare state saying their wealth disappeared because "Much of the money has gone on the welfare state and wages."(1) It's important for people to understand that the Peronists are just a different flavor of imperialist lackey and do not represent the interests of the majority of the people in Argentina. The Peronists may appear less repressive than some of the other military dictators who have ruled Argentina in the past fifty years, but this does not make them champions of the people. In 1943 a military regime seized power in Argentina, putting into power a fascist- friendly government which favored Japan and Germany. One of the leaders of this coup was Colonel Juan Peron. The government later broke off relations with Japan and Germany and declared war on them in 1945. In 1946 Peron won the presidential election on the promise of higher wages and social security for workers. By 1949 the Peron government passed laws jailing anyone opposing the government. This led to suppression of independent media and activists. In 1955 a military coup ended Peron's rule. In 1973 the Peronist party won the elections and Peron took the presidency again. In 1976 another military coup led to an even more repressive government which led the "dirty war" during with an unknown number of people were killed or disappeared. In 1989 a Peronist, Menem, was again elected to president. He imposed economic austerity measures with inflation at more than 900%. In 1992 Argentina introduced the peso, tied to the U.$. dollar.(6) Between 1974 and 1997 the poorest 30 percent of society saw its income drop 25 percent while the richest 10 percent's income grew 31.5 percent.(7) The International Monetary Fund (IMF) directed much of the country's economy policy in the past decade. Clearly the blame for the economic failure in Argentina falls squarely on the heads of the international imperialists and their Peronist and military government lackeys in Argentina.

The fall of the government

Recession hit Argentina in 1998. By 1999 the country had a $114 billion public debt. In 2000 the country saw widespread strikes and fuel tax protests. The IMF gave Argentina $40 billion in "aid." In March of 2001 President de la Rua took power and appointed three finance ministers over the course of 3 weeks as cabinet resignations and protests over planned austerity measures wrecked havoc in the country. In July of 2001 a general strike was waged in the country to protest proposed government spending cuts. In October of 2001 the Peronists again won elections to take control of both houses of parliament.(6)

In December of 2001 the government announced restrictions to stop people from withdrawing money from the banks. At the same time the IMF announced it would not disburse $1.3 billion in aid for the month. On December 13 a general strike by public workers protested government restrictions on bank withdrawals, delays in pension payouts and other economic measures. By December 20 President Fernando de la Rua was forced to resign after widespread protests and rioting in which at least 25 people were killed. Senate President Ramon Puerto was acting president for two days until December 23 when Adolofo Rodriguez Saa was named interim president. He appointed corrupt officials to office and maintained the banking restrictions and by December 30 he was forced to resign as well. Puerta refused to serve a second time and so Eduardo Camano took over as interim president until January 1 when Congress elected Peronist Eduardo Duhalde, who lost to De la Rua in the 1999 presidential elections, to president for the remaining two years of De la Rua's term.(6) Duhalde devalued the peso ending 10 years of parity with the u.s. dollar. Duhalde also changed dollar debts into devalued pesos which will cost foreign- owned banks and utilities an estimated $6.2 billion.(8)

The people will win

The people of Argentina are fighting for a government that truly represents them, but so far all the have won is new faces on the same government representing the interests of the imperialists. As the Revolutionary Communist Party - Argentina, an organization which claims Marxism- Leninism-Maoism in Argentina (but remains confused about when China took up capitalism), has stated:

"Un puñado de dirigentes que fueron parte y cómplices de los gobiernos de Menem y De la Rúa- Cavallo, impusieron a Eduardo Duhalde en la Presidencia de la Nación. Ocultan que son ellos los que llevaron el país a la quiebra sirviendo a minúsculos intereses imperialistas y oligárquicos. Pretenden preparar el terreno para aplicar 'nuevas' recetas para que el pueblo siga pagando la crisis. Hablan de 'unidad nacional', pero trabajan para dividir al pueblo; y estudian medidas represivas para acallar la rebeldía obrera y popular."(9)

"Se ha abierto un nuevo round. En él, las clases dominantes tratarán de revertir lo avanzado por el pueblo; y éste, con sus luchas, pugnará por avanzar hacia una resolución popular y antiimperialista de la crisis, multiplicando las multisectoriales, cabildos abiertos, comités de crisis, asambleas populares y demás organizaciones en los que se va plasmando la unidad combativa, en la lucha por imponer un gobierno de unidad popular."(9)

A government which serves the interest of the oppressed cannot come about through spontaneous protests without leadership. As we can see in Argentina, the ruling class does not hesitate to take advantage of the people and use their discontent as justification for changing the name of the exploiter without changing the reality of exploitation. This demonstrates clearly the need for a vanguard party of the people to lead the people in their fight against imperialism. A united front of classes against imperialism under the leadership of a Maoist party will move beyond bourgeois democracy and establish a government that truly serves the interests of the oppressed and exploited.

Notes:

1. BBC News, 02 Jan 15.
2. New York Times, 14 Jan 02.
3. Los Angeles Times 11 Jan 02.
4. Weekly News Update on the Americas 624, 13 Jan 2002.
5. For more information on the IMF and Third World debt see MIM's archive of articles on this topic at http://www.prisoncensorship.info/archive/etext/agitation/#debt.
6. News.bbc.co.uk.
7. MIM Notes 141, 1 Jul 1997.
8. New York Times, 14jan02
9. PCR Statement 2/1/2002, http://www.pcr-arg.com.ar/.