[A-List] The Collapse of Argentina, part 3: Juan Perón

[Louis Proyect <lnp3@xxxxxxxxx>]

Coming to terms with Juan Per=F3n is necessary for two reasons.
Firstly, Per=F3nism remains an important element of Argentine=
 politics
today, especially in the labor movement. Secondly, in many ways=
 Hugo
Chavez is a Per=F3n-like figure. For Marxists, such figures present=
 a
significant challenge. If we are for socialism, what is our=
 attitude
toward figures struggling against imperialism but who are not
socialists? For some socialists, however, Per=F3n was not in a
progressive struggle with imperialism. He is seen as some kind of=

Bonapartist caudillo at best, or fascist at worst.

Before attempting to address the question of what Per=F3n stood=
 for, it
is necessary to review the economic problems that faced Argentina=

prior to his ascendancy. By the early 20th century, Argentina had=

already become dominated by a coalition of the local ruling=
 classes
based on the ranching, grain growing in the pampas; and the
import-export and financial sectors in Buenos Aires, which=
 supported
the agrarian economy. The city's proximity to the pampas made it=
 the
political and commercial hub of the country, just as New York=
 City
was for the USA. These local fractions of the bourgeoisie had
developed a very close relationship to Great Britain that relied=
 on
Argentina for its agricultural exports. The emergence of=
 refrigerated
ships ensured that meat could arrive in British seaports without=
 any
loss. Prior to this technical innovation, you had to ship=
 livestock
that naturally lost weight during the arduous trans-oceanic=
 voyage.

While this arrangement made Argentina relatively prosperous and
allowed an upsurge of immigration, the economy was ultimately
dependent on Great Britain. It also stunted local industrial=
 growth
since the relationship with Great Britain implied favoritism=
 toward
imported British manufactured goods. Local industry remained=
 somewhat
primitive and wage labor tended to be of an unskilled and=
 part-time
nature.

The Radical Party mounted the first challenge to the entrenched=
 class
relationships. Their social base was in the petty proprietors,
shopkeepers, intelligentsia, professionals and labor aristocracy=
 of
the cities and towns. The leadership, however, came mainly from
landed interests that were shut out of the Argentina-England
connection. Hip=F3lito Yrigoyen, the Radical who became president=
 in
1916 and again in 1928, was himself a small landowner.

Despite the name Radical, the party was incapable of breaking
completely with the pre-existing class system. Basically, it=
 sought
to extend both geographically and socially the system that had
defined Argentina's past. As long as the economy continued to=
 expand,
the Radical Party did not pose a threat to the status quo. The
dominant ranchers and bankers probably understood that the system=

needed loosening up for it to survive over the long haul. With=
 such a
low level of class struggle in a period of rising economic
expectations, it is no wonder that some segments of the labor
movement developed reformist illusions. Corradi writes:

"The undisputed economic hegemony of the landed elite throughout=
 this
period of middle-class government is even more clearly revealed=
 by
the vicissitudes of the Argentine socialist movement. That=
 movement
was born in the 1880's when inflation devoured the incomes of the=

incipient working class. With the subsequent expansion of=
 Argentine
exports, the favorable terms of trade stabilized the currency.=
 Thus,
the success of the elite's economic program won for them the=
 support
of the socialists, who from then on sought reform and not=
 revolution.
Social mobility also contributed to the bourgeois tendencies of=
 the
socialists. Eventually they became junior partners of the
establishment. These are the historical roots of a spectacle that=

would puzzle some observers in 1945, when socialists and=
 communists
demonstrated against Per=F3n in the company of reactionary=
 landlords."

After Yrigoyen's re-election in 1928, things changed radically.=
 With
the stock market crash, the prices of meat and grain fell.
Consequently, Argentina's gold reserves flowed outward to pay for=

imported goods. Multiplier effects worsened the economy overall=
 and
before long Argentina was in a deep social and economic crisis
comparable to the one being suffered today. General discontent
provoked the dominant landed and banking sectors to back a=
 military
coup against Yrigoyen and on September 6, 1930 General Jos=E9 Felix=

Uriburu came to power.

Despite being thrust into power by the old agrarian ruling class,=
 the
military junta was forced willy-nilly to address Argentina's
underlying economic weaknesses. This led to the adoption of=
 public
works projects of a Keynsian nature. It also forced Argentina to=

begin a policy of national industrialization based on what is
commonly known as "import substitution". This policy is=
 associated
with the name of Raul Prebisch, an Argentine economist who=
 strongly
influenced the dependency theorists of the 1950s, including Andre=

Gunder Frank and Samir Amin. While the junta began moving=
 fitfully in
this direction, it required the strong nationalist hand of Juan=
 Per=F3n
to fulfil it.

Basically, the junta created a contradiction. While fostering the=

growth of local industry and a skilled modern proletariat, it was=
 not
ready to embark on a full-scale revolutionary nationalist path=
 that
would risk confrontation with its imperialist benefactors.
Symptomatic of this failure of nerve was the 1933 Roca-Runciman
Treaty which granted the British government import licenses for=
 85
percent of Argentine beef exports, while Argentina retained only=
 15
percent.

There is little in Per=F3n's background to suggest that he would=
 launch
an ambitious drive to break with Argentina's past. He was born on=

October 8, 1895 in the town of Lobo, about sixty miles from=
 Buenos
Aires. His father was of Italian descent and name was probably
shortened from Per=F3ni, the same name as the Neapolitan beer that=
 you
can find in many delis. He entered the military where he=
 developed a
rather unexceptional career, reaching the rank of captain.=
 According
to Robert Alexander, Per=F3n first took an interest in social=
 problems
when he observed the poverty of many of the conscripts who came=
 into
the army each year.

For conventional bourgeois social scientists and their=
 co-thinkers on
the left, the key to understanding Per=F3n's future trajectory was=
 the
two years he spent in Germany and Italy as part of an army=
 training
delegation. He studied the fascist system in Italy and was=
 impressed
with Mussolini's oratorical hold on his followers and the role of=
 the
state in organizing the economy. Of course, if he had been sent=
 to
the USA instead, he probably would have been just as impressed=
 with
FDR's talents in this direction. According to Alexander, whose
account is generally hostile, Per=F3n was not interested in simply=

copying Mussolini. He writes:

"Years later Per=F3n claimed while talking with me that he had=
 learned
from what he thought were the mistakes of Mussolini, and he said=
 that
he had had no intention of repeating those mistakes. He argued,=
 among
other things, that Mussolini had erred in trying to impose a
corporative state structure on Italian society, an attempt which=

Per=F3n saw as having been a failure."

Additional "proof" of Per=F3n's fascist sympathies was his ties to=
 the
military junta of the 1930s, which had a pro-Axis tilt.=
 Additionally,
he became a member of the GOU (Group of United Officers), a lodge=
 of
military men who gathered together during WWII to discuss=
 military
and political questions. When the GOU eventually seized power in=

1943, they allegedly based themselves on a document that=
 predicted an
Axis victory. After the world was divided into spheres of=
 influence,
Argentina would dominate Latin America. If this was all there was=
 to
Per=F3n, then perhaps his detractors would have a point.

Instead, he embarked on a strongly leftist and pro-labor path.
Shortly after the coup took power, Per=F3n persuaded his fellow
officers to name him Secretary of Labor. Using this department as=
 a
battering ram, he challenged all the old dominant classes in
Argentina and promoted the class interests of the workers and the=

nascent industrial bourgeoisie.

The concessions made to the workers were only possible as a=
 result of
the "primitive accumulation" regime of the 1930s, which had=
 imposed a
draconian limit on wages in order to finance industrial=
 expansion. By
1943, elements of wartime prosperity and prior capital=
 accumulation
made it possible for the creation of an ambitious welfare state=
 that
dwarfed similar efforts in the USA.

In conjunction with his wife Eva, who had been a labor activist
herself, Per=F3n aligned himself with the most important labor=
 unions
in the country. He forced employers to recognize and bargain=
 fairly
with new unions in the packinghouse, metal and textile=
 industries. In
addition, he built strong ties with older unions, including the
railway and telephone. Again, we must turn to the hostile Robert=

Alexander for an account of what took place:

"When Per=F3n went out to the town of Berisso, near La Plata, at=
 the
height of a packinghouse workers' strike and was seen to confer
publicly with the leader of the walkout, Cipriano Reyes, it was=
 no
longer possible for the large foreign-owned packinghouses to=
 refuse
to negotiate with Reyes and his colleagues. Once and for all, an=
 end
was put to the age-old system of labor spies, to dismissals of=
 any
workers who joined a union, and to the beating up of labor=
 militants.
In its place came a strong union with collective bargaining=
 between
union and management.

"What was true of the 'frigor=EDficos,' or packinghouses, was also=
 true
of the other large industrial enterprises in the metropolitan=
 area.
However, Per=F3n's union-fomenting efforts were not confined to the=

Buenos Aires region. With his help the sugar workers of the=
 northern
provinces of Tucuman and Salta were unionized, as were the=
 vineyard
and winery workers of Mendoza and other mountain provinces. Even=
 the
workers on the great cattle and grain estancias were brought into=
 a
union."

Answering those who would argue that Per=F3n's efforts were solely=

designed to build up corporatist type unions, Donald Hodges finds=

Argentine nationalism rather than European fascism of much more
explanatory value. In particular he looks to the Radical=
 Orientation
Forces of the Argentine Youth (FORJA), which was founded by=
 Radical
Party youth leader Arturo Jauretche on June 29, 1935. The=
 nationalism
of the FORJA was predicated on a "revisionist" interpretation of=

Argentine history, one that saw the Europeanizing influence of=
 Buenos
Aires as an obstacle to future national development. In=
 particular,
they looked at the work of Ra=FAl Ortiz, who attacked British=
 imperial
policy in much the same manner as Alejandro Benda=F1a's=
 dissertation
that formed the basis of my first post. Another key FORJA figure=
 was
Manuel Ugarte who was expelled from the Socialist Party for
nationalist deviations. It is significant that Jauretche, Ortiz=
 and
Ugarte all went to work in Per=F3n's first administration. It=
 should
remind of us how some former guerrilla fighters went to work for=
 Hugo
Chavez in Venezuela.

When the old landed gentry figured out what Per=F3n was up to, it
didn't take long for them to organize a coup just like the kind=
 that
failed in Venezuela. It also failed in Argentina for the same
reasons. The working people figured out that it was in their=
 class
interests to retain the nationalist movement in power. Just as
occurred with Chavez, the military coup of October 1945 took=
 Per=F3n to
Martin Garcia island where he was held incognito. When the trade=

unions discovered what had taken place, they mobilized the ranks=
 to
march on Buenos Aires against the new regime of General Avalos.=
 After
hundreds of thousands of workers took control of the streets, the=

junta relented and Per=F3n was returned to power. He ran for office=
 in
the following year and became President of Argentina.

Now that he had the full mandate of the nation, Per=F3n embarked on=
 an
ambitious program of social welfare and industrialization. He
nationalized the railways and seized control of Axis property.=
 Inside
his administration you could find "moderates" and "extremists".
(George Lambie uses these terms in his 1983 MA dissertation on=
 Per=F3n.
I am not sure whether he coined them or whether they were=
 operative
in 1946. In any case, there seems to be no reason to disagree=
 with
them as broad categories.) The two camps differed mainly on the=
 pace
of the social and economic reforms that were designed to break=
 the
hold of imperialism and the landed gentry on the country.

The most prominent "extremist" was Miguel Miranda, who as head of=
 the
Economic Council advocated rapid industrialization under state
control, financed by high prices for agricultural exports.=
 Although
the Per=F3n government specifically rejected the Soviet model and
invited US investment in the country in a bid to break free of
British domination, the USA remained hostile. Since Great Britain=
 was
the USA's main ally against the Soviet threat, any upstart=
 country
had to be taught to obey.

Great Britain was clever, however. Rather than making a frontal
assault on Argentina, it would try to figure out how to exploit
differences between "moderates" and "extremists". When Argentina=

launched a five-year plan for economic development, Great Britain=

sought ways to slow down its implementation. The USA saw things=
 the
same way. In November 1945, Spruille Braden, who attempted
unsuccessfully to tarnish Per=F3n as a fascist in the recent=
 elections,
made a speech in which he denounced any development policy=
 designed
"not to promote an increased productivity and a higher real=
 income,
but to serve the purposes of autarchy, neurotic nationalism and
military adventure." (Cited in Lambie). It was clear that=
 Argentina
was the "neurotic nationalism" he was warning against.

Key to Argentina's success was the ability to buy American=
 capital
goods such as farm machinery, machine tools, electronics, etc.=
 Since
WWII had devastated Europe and Great Britain, the Yankees were=
 the
only game in town. In 1946, Argentina's future looked bright=
 since it
had accumulated 150 million British pounds in the form of=
 promissory
notes with the Bank of England. Per=F3n hoped that the English=
 currency
would be convertible into dollars, which would allow him to buy
American equipment.

Great Britain refused to allow Argentina's notes to be converted=
 into
dollars. As Lambie points out, "The dollar shortage gave both the=
 US
and Britain a powerful lever by which to delay the=
 diversification of
the Argentine economy. By undermining Miranda and the Five Year=
 Plan
and encouraging ["moderate"] Bramuglia and a policy of slow
industrialization under a system of free enterprise, it would be=

possible for the US to force Argentina to forgo its own economic=

development to contribute instead to Britain's economic=
 recovery."

Lambie's scholarship around these issues is very important. Even=
 on
the left, there is a tendency to look at the collapse of the=
 Per=F3n
experiment simply in terms of a failure to confront the local
bourgeoisie. For example, Corradi writes:

"In the absence of agrarian reform, no incentive had been offered=
 to
agricultural production. The country's most strategic productive=

activities were in fact penalized under the operation of the=
 state
trading and multiple-exchange-rate systems, which denied the
producers, that is, the landowners, the benefits of high external=

prices without crippling their capacity to rebound as a pressure=

group either, and without diversifying agricultural production.=
 In
consequence of this, and as a result of the significant rise in=
 the
standard of living of the urban masses mobilized by Per=F3nism, a
steadily increasing domestic consumption of meat and other=
 foodstuffs
inevitably reduced the country's exportable surpluses. The=
 specter of
dependency arose once more, even though the nature of dependency=
 had
changed. The development of consumer goods industries had reduced=

consumer imports.

"But the ability to maintain existing industries depended upon=
 the
import of indispensable fuels and raw materials and imports of
capital goods for industry and transport. As a result of Per=F3n's=

policies Argentina had an established "light" industry but was=
 not in
a position to promote its development without outside aid. One=
 thing
then became apparent: the utilization and direction of investment=
 had
been Per=F3n's worst blunder. Nearly 74 percent of the total=
 increase
in fixed capital had gone into non-productive activities. To give=
 a
striking example: between 1945 and 1946, over 50 percent of real=

investment of the national government was applied to national
defense. Between 1947 and 1951 defense expenditures were reduced,=
 but
they still represented an extravagant 23.5 percent. The cost of
living began to rise more rapidly than money wages, so real wages=

began to decline. At this time,

"Per=F3n began to rely more on the redistribution of income between=

industries and occupations, thus reducing wage differentials=
 between
skilled and unskilled workers. Political patronage caused wages=
 to
rise substantially above output per worker. Government policies
resulted in a redistribution of the labor force into the least
productive sectors of economic activity. All these developments=
 had
serious implications for economic growth: it was simply a=
 failure. At
the end of Per=F3n's regime, per capita gross product was only 5.9=

percent higher than in 1946. Per=F3n tried to salvage what he=
 could.
There was a shift in agricultural policy in the fifties. Per=F3n=
 made
friendly gestures toward foreign investors. He began sacrificing=
 the
two pillars of the regime: social justice and economic=
 independence.

"When the internal contradictions of his experiment forced an=
 option
between radicalization or reaction, he opted for the latter, but=

could not escape the political and institutional pressures he had=

created. Opportunism proved self-defeating. When hard times=
 arrived
Per=F3nism revealed its deepest conservative impulses. After all it=
 had
attempted to develop a populist labor policy within the=
 institutional
framework of capitalism. Laborism had been the strategy of its
revolutionary phase. It had provided Per=F3nism with working class=

support. But it contradicted the requirements of capitalist
accumulation which Per=F3n had not once challenged. Per=F3n had now=
 to
stabilize the hybrid system he had created: he began instituting=

repressive controls and freezing the class struggle by setting up=

corporativist institutions. In brief, he tried to build a power
apparatus in order to free himself from the reactionary and=
 radical
cross pressures in the society."

When the forces of reaction began to bear down on Per=F3n, there=
 was
only one class force capable of resistance. Imperialist pressure=
 and
hostile class forces in Argentina had taken their toll, however.=

Per=F3n was unwilling to turn to the same working-class forces that=
 had
come to his aid in 1945. After a military coup had unseated him=
 in
1955, Per=F3n asked his sympathizers in high government positions=
 and
trade unions to resign in order to keep the peace. He also=
 permitted
the military to seize the CGT's (pro-Per=F3n trade union) arsenal=
 of
5,000 rifles and revolvers.

In an emotional speech to the nation on July 15, 1955, he said:

"The Per=F3nist Revolution has ended; now begins a new=
 constitutional
stage without revolution =85 I have ceased to be the leader of the=

National Revolution in order to become President of all the
Argentines."

In my next and final post on the collapse of Argentina, I will=
 try to
explain why a revolution in Argentina cannot reflect the interest=
 of
"all the Argentines."

Sources:

1. chapter on Argentina by Juan Eugenio Corradi in Latin America:=
 the
struggle with dependency and beyond, edited by Ronald Chilcote &=
 Joel
Edelstein.

2. George Lambie, "The Failure of Peron's Economic Policies in=
 the
Immediate Postwar Years: a Case of Internal Mismanagement or
International Manipulation" (MA dissertation, 1983)

3. Donald C. Hodges, "Argentina 1943-1976: The National=
 Revolution
and Resistance" (U. of New Mexico, 1976)

4. Robert Alexander, "Juan Domingo Per=F3n: a History" (Westview,=
 1979)


--
Louis Proyect, lnp3@xxxxxxxxx on 04/27/2002

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