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Introduction: The class struggle from above found its most intense , comprehensive and retrograde expression in Argentina, with the election of Mauricio Macri (December 2015). During the first two months in office, through the arbitrary assumption of emergency powers, he reversed, by decree, a multitude of progressive socio-economic policies passed over the previous decade and sought to purge public institutions of independent voices.
Facing a hostile majority in Congress, he seized legislative powers and proceeded to name two Supreme Court judges in violation of the Constitution.
President Macri purged all the Ministries and agencies of perceived critics and appointees of the previous government and replaced those officials with loyalist neo-liberal functionaries. Popular movement leaders were jailed, and former Cabinet members were prosecuted.
Parallel to the reconfiguration of the state, President Macri launched a neo-liberal counter-revolution: a 40% devaluation which raised prices of the basic canasta over 30%; the termination of an export tax for all agro-mineral exporters (except soya farmers); a salary and wage cap 20% below the rise in the cost of living; a 400% increase in electrical bills and a 200% increase in transport; large scale firing of public and private employees; strike breaking using rubber bullets; preparations for large scale privatizations of strategic economic sectors; a 6.5 billion dollar payout to vulture-fund debt holders and speculaters-a 1000%return- while contracting new debts.
President Macri’s high intensity class warfare is intended to reverse, the social welfare and progressive policies implemented by the Kirchner regimes over the past 12 years (2003-2015).
President Macri has launched a virulent new version of the class struggle from above, following a long-term neo-liberal cyclical pattern which has witnessed:
1. Authoritarian military rule (1966-1972) accompanied by intense class struggle from below followed by democratic elections (1973-1976).
2. Military dictatorship and intense class struggle from above (1976-1982)resulting in the murder of 30.000 workers.
3. A negotiated transition to electoral politics (1983)a hyper inflationary crises and the deepening of neo-liberalism (1989-2000).
4. Crises and collapse of neoliberalism and insurrectionary class struggle from below 2001-2003.
5. Center-left Kirchner-Fernandez regimes (2003-2015): a labor-capital-regime social pact.
6. Authoritarian neo-liberal Macri regime(2015) and intense class struggle from above. Macri’s strategic perspective is to consolidate a new power bloc of local agro-mineral,and banking oligarchs, foreign bankers and investors and the police-military apparatus to massively increase profits by cheapening labor
The roots of the rise of the neo-liberal power bloc can be found in the practices and policies of the previous Kirchner-Fernandez regimes. Their policies were designed to overcome the capitalist crises of 2000-2002 by channeling mass discontent toward social reforms, stimulating agro-mineral exports and increasing living standards via progressive taxes, electricity and food subsidies, and pension increases. Kirchner’s progressive policies were based on the boom in commodity prices. When they collapsed the capital-labor ‘co-existence’ dissolveded and the Macri led business-middle class-foreign capital alliance was well placed to take advantage of the demise of the model.
The class struggle from below was severely weakened by the labor alliance with the center-left Kirchner regime .Not because labor benefited economically but because the pact demobilized the mass organizations of the 2001 -2003 period. Over the course of the next 12 years’ labor entered into sectorial negotiations (paritarias) mediated by a ‘friendly government’. Class consciousness was replaced by ‘sectoral’ allegiances and bread and butter issues. Labor unions lost their capacity to wage class struggle from below – or even influence sectors of the popular classes. Labor was vulnerable and is in a weak position to confront President Macri’s virulent neo-liberal counter-reform offensive.
Nevertheless, the extreme measures adopted by Macri— the deep cuts in purchasing power, spiraling inflation and mass firings have led to the first phases of a renewal of the class struggle from below.
Strikes by teachers and public employees over salaries and firings have flared up in response to the barrage of public sector cuts and arbitrary executive decrees. Sporadic mass demonstrations have been called by social and human rights movements in response to Macri’s dismantling of the institutions prosecuting military officials responsible for the killing and disappearance of 30,000 victims during the “dirty war” (1976-83).
As the Macri regime proceeds to deepen and extend his regressive measures designed to lower labor costs, business taxes and living standards to entice capital with higher profits, as inflation soars and the economy stagnates due to the decline of public investment and consumption, the class struggle from below is likely to intensify –general strikes and related forms of direct action are likely before the end of the first year of the Macri regime.
Large scale class based organizations capable of engaging in intense class struggle from below, weakened by the decade-long ‘corporate model’ of the Kitchener era, will take time to reconstruct. The question is when and what it will take to organize a class-wide (national) political movement which can move beyond an electoral repudiation of Macri allied candidates in upcoming legislative, provincial and municipal elections.
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Israeli prime minister Benjamin Netanyahu has every reason to celebrate the departure of the so-called “pro-Iran” Cristina Kirchner. She will be replaced by former Buenos Aires Mayor Mauricio Marci as the new president of Argentina.
Mauricio Marci visited Israel last year and held a meeting with Netanyahu. The president-elect Marci has already appointed Pope Francis friend, Rabbi Sergio Bergman as minister of environment and sustainable development. The good rabbi is author of religious book, A Gospel: According to Pope Francis. Their friendship goes back to days when Cardinal Jorge Bergoglio served as Archbishop of Buenos Aires. Jorge Bergoglio was a frequent visitor to Asociacion Mutual Israelita Argentina (AMIA) that was targeted by Israel Mossad in 1994.
Marci defeated Cristina Kirchner’s hand-picked Daniel Osvaldo Scioli, Governor of Buenos Aires and former vice-president under Nestor Kirchner (2003-07).
Netanyahu telephoned Marci to congratulate him on his success and invited him to visit Israel after he take over country’s presidency on December 10, 2015. Later, Netanyahu told the press that from now on relations between Israel and Argentina will be back to the presidency of Nestor Kirchner, a Zionist poodle. He also boasted that Marci has promised he would revise Argentina’s relation with Venezuela and Iran.
A pro-Israel Argentina is a religious fantasy of the hardcore Zionists. The Patagonia Region was the first choice of Theodor Herzl for proposed homeland for European Jewry to escape centuries-old anti-Semitism. The fertile and full of natural resources, the region spans five provinces in Argentina, Chile, and British occupied Falkland which is home to UK’s nuclear military base .
https://rehmat1.com/2015/11/27/argentinas-new-pro-israel-president/
Let me replace the useless Marxist cant with a much simpler and more accurate predictive model: the price and availability of basic foodstuffs such as milk, eggs, meat, flour, etc. When left-wing governments meddle in the market, prices rise, availability falls, and ultimately widespread unrest leads to a more reasonable government. Gradually the lessons are forgotten, demagoguery once again reigns and a new cycle begins. We are now seeing Venezuela and Brazil entering into the widespread unrest phase. Argentina is gradually tending towards the improved living standards that an unregulated economy delivers. When living standards have been high enough, widespread ernough, and lasted long enough, Argentina will once again flirt with some form of demagoguery, e.g., some version of Peronism as exemplified by Kirchner.
Latin America suffers from the same economic problem as apartheid South Africa and the Russian Federation.
The countries are unable or unwilling to develop internationally competitive manufacturing sectors, and their bounty of natural resources is insufficient for their population size to sustain stable economies with high standards of living when commodity prices are low unlike countries with more natural resources per capita such as Australia and the Gulf states.
A habitual strategy pursued to combat this is import substitution industrialization. This is effective in increasing employment, wages, and real output and thus should not be dismissed. The trouble is that when commodity prices fall, the countries are not able to pay for capital goods imports. Inevitably financial crisis and austerity follow.
In Latin America this problem is compounded by the fact that Latin Americans simply aren’t very good at governing themselves. The populist left typically irresponsibly increases wages far beyond the level of productivity growth, subsidizes consumer goods, and stuffs the public sector with unneeded employees.
When the right returns to power as result of spiraling inflation, they engage in exactly what Mr. Petras describes–class war from above, austerity, and repression. The results are well known. Usually (though not always) the right in Latin America consists of elitist compradors who prefer to serve foreign capital at the direct expense of their own lower classes.
Argentina’s position isn’t that bad compared to some other countries–they actually still have a trade surplus. But I’m not expecting good things.
Devaluation doesn’t make a lot of sense for Argentina. 70-80% of their exports are primary goods. Their manufactured exports go largely to other Mercosur countries. Brazil is number one, and both their economy and their currency are in the toilet. Thus there will be no increase in exports from devaluation, and capital goods imports will grow more expensive. And as Argentina owes debts in foreign currency, the real cost of servicing these debts will increase.
Certainly inflation must be got under control, and perhaps it may be necessary to engage in some harsh and indeed impoverishing measures. Still, the government should get creative here. The pensions system could be augmented by compulsory savings to reduce demand without reducing wages. Consumer credit could be restricted to do the same. Quantitative easing could reduce the government’s domestic interest burden and keep the cost of investment below the level of profitability. And in a country that is a major agricultural exporter, surely food price inflation could be quickly quashed by flooding the domestic market with agricultural goods.
Long-term, the country should look more strategically at import substitution again. Currently 16% of Argentina’s import bill is refined fuel and lubricants. A new oil refinery could eliminate that entirely (and the country could even export refined fuels), and ongoing imports of capital and engineering for the refinery complex would certainly be lower than the current fuel import bill. This sort of sharp eye should then be turned to other sectors.
But I don’t have a lot of hope for the country. They clearly aren’t very good at governing themselves.
Note that the devaluation did not raise the cost of anything, it merely brought the nominal exchange rate much closer to the real, black market rate which had been double the Kirchner nominal exchange rate….
A country with a current account surplus and effective capital controls can impose any exchange rate that it likes (though naturally not without consequences). As with all controlled prices, there is a tendency for a black market exchange to then emerge. While undesirable to policy makers, the black market rate doesn’t indicate that the official rate is somehow fake or unsustainable–that only becomes the case if the black market is inadequately suppressed and is allowed to predominate the official exchange.
The Kirchner government never had a clear policy on controlling capital flows and change course frequently, and this being Latin America I assume the policy was undermined from within by plenty of self-dealing by politically connected people. Arbitraging the price difference between the official exchange rate and the black market rate is nice work if you can get it.
As the Kirchners failed to properly resolve the country’s foreign debt problems and aggravated them with unnecessary foreign borrowing and unserious and illegal refinance schemes (rather than just defaulting outright), the country was repeatedly forced to walk back from its own capital controls by offering a higher rate to domestic Dollar holders in order to service debt repayments whenever they went beyond export earnings.
Thanks for the thoughtful analysis. I see and accept the points you are making in your nuanced analysis. You’ve impacted my thinking far more than the silly screed that started this conversation. An earlier conversation with my brother-in-law , Argentinian by birth, supports and augments your analysis. He pointed out that, unlike, e.g., Canada, the USA, and Australia, Argentina imported much of its industrial and transportation sector from Spain and southern Europe rather than England. Also, even in the case of English investment, the human labor technical skills to support the imported capital was never developed domestically as it was in the three countries mentioned earlier. As a result Argentina entered the twentieth century competing in international markets with inferior capital that it could not fully maintain. It seems to me that this could have been an additional pressure forcing more reliance on exports from extractive industries and agriculture.
Mr. Petras’ schematic analysis is not very convincing, but he is right about the greed of capitalists and the problem of making it the foundation of a national economy. I was glad also to learn more unsavory stuff about the Court Jester of the Catholic Church.