The Collapse of Argentina, part 3: Juan Perón

Coming to terms with Juan Perón is necessary for two reasons. 
Firstly, Perónism remains an important element of Argentine politics 
today, especially in the labor movement. Secondly, in many ways Hugo 
Chavez is a Perón-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, Perón 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 Perón 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. Hipólito 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 Perón 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 José 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 Perón 
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 Perón'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 Peróni, 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, Perón 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 Perón'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, Perón was not interested in simply 
copying Mussolini. He writes:

"Years later Perón 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 
Perón saw as having been a failure."

Additional "proof" of Perón'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 
Perón, 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, Perón 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, Perón 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 Perón 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 'frigoríficos,' or packinghouses, was also true 
of the other large industrial enterprises in the metropolitan area. 
However, Perón'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 Perón'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 Raúl Ortiz, who attacked British imperial 
policy in much the same manner as Alejandro Bendaña'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 Perón'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 Perón 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 Perón 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 Perón 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, Perón 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 Perón. 
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 Perón 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 Perón 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. Perón 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 Perón 
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 Perónism, 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 Perón'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 Perón'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, 

"Perón 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 Perón's regime, per capita gross product was only 5.9 
percent higher than in 1946. Perón tried to salvage what he could. 
There was a shift in agricultural policy in the fifties. Perón 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 
Perónism 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 Perónism with working class 
support. But it contradicted the requirements of capitalist 
accumulation which Perón had not once challenged. Perón 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 Perón, there was 
only one class force capable of resistance. Imperialist pressure and 
hostile class forces in Argentina had taken their toll, however. 
Perón 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, Perón 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-Perón trade union) arsenal of 
5,000 rifles and revolvers.

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

"The Perónist Revolution has ended; now begins a new constitutional 
stage without revolution … 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 Perón: a History" (Westview, 1979)


-- 
Louis Proyect, lnp3@panix.com on 04/27/2002

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