Argentinian history is convulsive and for the ones who look at it from outside, it might seem impossible to understand. But a closer look reveals some of the roots and contours of today’s crisis.
In the 19th century, Argentina was founded upon the idea of a great nation. Its ruling class was inspired by the bourgeois from France, United Kingdom, and Germany. But when entering the world market, Argentina had to define its position: would it stay under the wing of the already industrialized countries or take the difficult path of national development? Clearly, the first option had all the sweetness of being part of the chosen group of nations selected by the central economies; yet the second one presented the opportunity to autonomously decide over its fate as a nation. As we know from history, the ruling elite most often has chosen the first route. Why? Because they always felt closer to their partners in Europe or the USA than to the ones who live, suffer, and fight in Latin America. And it is this elite, that wished it had been born in Paris or New York, which is ruling Argentina once again.
There is no doubt, 2017 was a bittersweet year for the government and its project of re-founding Argentina, since it started and ended with huge demonstrations against the austerity policies promoted by Cambiemos, the ruling political party coalition of Argentina. Yet, it was not until the legislative elections of October 2017 that the government really advanced some of its most unpopular policies, policies which reflected the elite’s vision of a new Argentina based on neoliberal ideology. It is this ideology and the corresponding actions taken by the government, which – in contrast to the declarations of the Argentinian president Mauricio Macri in front of the Davos Forum, where he said that unemployment and poverty in the country had been reduced – have provoked a severe economic and social crisis in Argentina. Consider the following examples which illustrate this crisis.
Despite the government’s inflation goal of 17% for 2017, at the end of the year it climbed to over 24%. When taking into account the inflation rate since the start of Macri’s term of office at the end of 2015, we are looking at an overwhelming 62.5%. In this sense, 2018 has started as the last one ended, with 1.8% of inflation. The current fear is that once again we will be looking at around 25% of increase in prices by the end of the year. Needless to say, the ones who are most vulnerable to these price spikes are the working people and the poor. As the director of the Institute of training and education of the Autonomous Central of Workers of Argentina (CTAA), Julio Gambina, explains: “As we have argued on several occasions, price inflation is a mechanism of regressive redistribution of income, since only prices rise. The ones controlling prices are the State, in [the] case of regulated prices, for example public services, or private companies which by rising prices decide what the value of the product is in a market where a part of the population has the capacity to pay. It is not easy for active and retired workers to impose what they believe should be the price of their labor force, let alone increase it.”
In December 2017, Macri’s Cambiemos administration presented a set of laws including a new social security law which drastically cut pensions for retired people and social assistance to children of poor families, among other adjustments. Based on the World Bank’s recommendations, their objective was to reduce the fiscal deficit.
Macri’s reforms included a new tax law which basically resulted in less taxes for big companies while raising taxes on the working class. It also prepared the way for a new labor law which was supposed to enter into Congress in March, but was postponed due to the opposition of most of the political parties, labor unions, and general public. Basically, the new law rolls back the labor conditions to the ones existing in the 19th century, including increasing the working hours and repealing collective wage bargaining, all of which dissolves the power of the labor unions and the workers as a whole. If 20th century capitalism focused on raising the surplus through improvements in technology and productivity, this law allows capitalists to extract wealth through increasing the absolute surplus value.
Because of the huge opposition to the law by the labor unions, the government is now working to apply the reforms not directly, but by settling arrangements with the unions of each labor sector in the country.
This list of structural adjustment policies, and especially the social security law, are the most unpopular measures of the Cambiemos government to date. This is why support for the government has been dropping dramatically since December of last year. This loss of popularity is best illustrated by recent football games during which chants against the President Macri were heard. (Macri built his political career upon the presidency of the Boca Juniors Football Club, one of the most popular teams of Argentina).
The situation of the Small and Medium-sized Enterprises (SMEs), the cooperatives, and the popular economy, which employ 75% of the labor force in the country, is getting worse each day. The main reason is the opening up of the Argentine market for imports of cheap products with which national industries cannot compete; the increase of taxes and fees for public services, such as gas, electricity, water, and public transport (with increases of more than 1000% in two years); and the reduction of the purchasing power of workers. Most of the businesses in this sector produce for the local market where sales are decreasing due to the reduction of people’s incomes. Worsening the situation further is the fact that it is not even possible to elevate the prices of the products to a level in which they match the costs of production. Spokespeople representing this sector say that 35% of the SMEs decreased their production, dismissed workers, and reduced their hours.
In the midst of this situation, the government continues to push the limits of Argentina’s economy with the free trade agreement between Mercosur and the European Union, even when there is an strong opposition to the agreement from the Argentine industrial sector. The signing of this agreement will mean the elimination of Argentina’s industrial sector and the non-industrial agriculture producers of the country who cannot compete with the subsidized prices of the products from Europe.
Recently, President Macri honored a policeman who killed a man involved in a crime but who was already down on the floor during the murder and did not represent any threat to the policeman’s life. When asked by a journalist about this controversial case, Minister of Security Patricia Bullrich said that the government supported the approach of the police and approved of this kind of behavior. This episode generated a huge outcry in the media and in society as such government support for police brutality is not only dangerous in terms of the division of power, but has resulted in the killing of two social activists in 2017 during repressions in the south of the country, including the disappearance of Santiago Maldonado. In this context, it is no surprise that Minister Bullrich has actually congratulated one of the policemen who took part in the operation where Maldonado was killed, and even promoted the officer.
All of these measures were just the prelude to the government’s labor reform, which was supposed to enter the congress last month. The government was expecting resistance to the law fostered by the critical economic situation, and social movements and labor unions prepared for demonstrations. The first steps towards building a unified movement able to effectively confront the labor reform were taken on February 21st when more than 400,000 women and men marched together against the neoliberal adjustment policies, for work and a dignified income.
Union leaders resisting the new labor law also spoke up against political persecution. Sergio Palazzo, Secretary General of the bank workers stated that “this demonstration is also to give out support for those who have been persecuted by this government.” He added, “the only division that really exists in Argentina is the one between those who have the possibility to put food on their tables, and the ones who cannot. This is the consequence of the policies applied by the government.”
The most popular speech was the one given by Hugo Moyano, Secretary General of the truck drivers’ union, a group which is highly targeted by the government. “I am not afraid to go to jail,” he said, “I am at the disposal of the court, and even more, I am willing to give my life to defend the rights of the workers.”
The demonstration of February 21st paved the way for a new movement against neoliberalism in Argentina, a front made up of political organizations, trade unions, and social movements. Among others, two of the most important players are the Confederation of Workers of the Popular Economy (CTEP) and a segment of the General Confederation of Labor (CGT). It is the alliance of these two sectors which marks a milestone in the political history of the workers’ movement and gives hope for the development of a real political alternative in Argentina. As for now, the groups represent an ample ideological variety, which might be the reason why so far, they have only managed to get together in the streets. We are talking about Marxist, Trotskyist, Socialist, Peronist, and Social Democrats who would be asked to think collectively about a political project and be able to create enthusiasm among the low and the middle classes, and among workers, pensioners, and young people.
Yet we should not forget what history has taught us. The last time a similar popular uprising happened in Argentina was at the beginning of the millennium, when a government supported by the elites and the international powers pushed the country into bankruptcy and escalated state repression. But the manifold demonstrations which took place then did not have a defined leadership; there was no over-arching plan developed by the left-wing forces and the unions at that time on how to exit the crisis, which was why the country entered into a spiral of chaos, ending in the rebellion of 2001 and resulting in the reintroduction of the same neoliberal economic system.
If we want to have an alternative in the long run, we need to overcome the differences that have historically divided the left-wing political parties, social movements, and labor unions and create a new political tool or organization for and by the workers. We should also not underestimate the ability of the Macri government to take advantage of the current divisions on the left.
That is the task of our time.
Dario Farcy has a degree in Political Science and is a member of Democracia Socialista. He is involved in the self-management movement in Argentina, and he is part of the board of directors of Fedecaba (Federación de Cooperativas Autogestivas de Buenos Aires – The Federation of Self-Managed Cooperatives of Buenos Aires).