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Re: The legacy of Juan Perón



The government of Juan Perón was one of the most progressive in Latin
American history in the 20th century. Here is a list of its accomplishments:

1. Taking advantage of government leniency if not outright support, trade
unions were formed in every industry.
2. Social security was made universal.
3. Education was made free to all who qualified.
4. Vast low-income housing projects were created.
5. Paid vacations became standard.
6. A working student was given one paid week before every major examination.
7. All workers (including white-collar employees like bank tellers, etc.)
were guaranteed free medical care and half of their vacation-trip expenses.
8. A mother-to-be received 3 paid months off prior to and after giving birth.
9. Workers recreation centers were constructed all over Argentina,
including a vast resort in the lower Sierras that included 8 hotels, scores
of cabins, movies, swimming pools and riding stables. This resort was
available to workers for 15 days a year, at the cost of 15 cents per day,
all services included.

In order to strengthen Argentina's economy, Perón created the Argentina
Institute for Promotion of Exchange (AIPE), a monopoly that handled all
commodity exports. Cattle, wheat, etc. were sold at a high price overseas.
While not socialism, this measure was consistent with the traditional
Marxist demand for a monopoly on foreign trade. Perón also bought out the
local IT&T operation and the railroad and trolley system from Great
Britain. He paid off Argentina's foreign debt and launched a 5-year plan in
1946 that covered everything from the woman's right to vote to shipbuilding.

By 1954 Perón had initiated more than 45 major hydroelectric projects
designed to produce 2 billion kilowatt-hours of energy, 20 times the amount
that was available in 1936. While in hindsight we can say that these
projects had ecological drawbacks, they still represented an audacious step
in the direction of making every citizen's life more fulfilling. By 1947,
Argentina had launched its own iron and steel industry. It was also moving
forward in coal extraction and other raw materials using the most advanced
technology available at the time. It began to make farm machinery, planes
and cars in modest numbers. Ship-building had expanded by 500 percent under
Perón's regime.

But Perón failed to sustain these progressive changes over the long haul.
All of the gains of the Perón era have disappeared as workers' lives and
fortunes have gone downhill. What happened?

Basically Perón failed because his reforms were not radical enough. For
example, although he raised rural wages and forced landlords to sell cheap
to the AIPE, he refused to take the next step when they balked. He did not
nationalize the land. Thus, the amount of land under cultivation dropped
from nearly 22 million hectares in 1934-38 to just over 17 million in 1955.
What you had was a producer's strike, not that much different from the kind
Allende was confronted by.

As I said, a scissors crisis: in a mixed economy, the government should be used to redistribute income and the market used to allocate resources; to get things backward--as Peron did, using the government to allocate resources and regulating market prices to redistribute income--doesn't work.

My complaint with Peron is not that he tried to introduce
western-European-style social democracy to Argentina, but that he got
the details *badly* wrong--and so produced long-run economic
distaster.


Brad DeLong




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