How Argentina Fell Behind the Rest of the World

2:46 am in Uncategorized by inoljt

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Argentina is a country famous for football, for its invention of tango, and for its great beef.

Amongst economists, however, Argentina is also famous for its economic slide backwards over the past century. Before World War I, Argentina had one of the ten biggest economies in the world. Argentinean living standards were amongst the highest in the world. It looked like Argentina would become a modern-day Australia or Canada.

That didn’t happen. Today Argentina is widely considered a Third World country. Its income, relative to the rest of the world, has plummeted. In 2001 Argentina suffered the greatest economic crisis in its history.

What happened?

There are a myriad of reasons. Wikipedia provides a pretty good overview of the gritty details, which this post won’t get into. But underneath the rush of events and crises there are several underlying factors. These factors were the catalysts for the events and the century-long decline of Argentina’s economy.

The Endless Coups

Military coups are the primary and most important factor behind Argentina’s economic decline.

Argentina’s people are very left-wing, and when left to their own devices they will generally elect a left-wing president. However, like many Latin American countries, Argentina also has a very strong right-wing minority. This conservative minority constitutes the business elite of the country, and they generally loathe the left-wing presidents that the people will select (sometimes for good reasons, sometimes for not-so-good reasons).

The current president, Cristina Fernández de Kirchner, is a great example of this dynamic. The Buenos Aires elite hate Cristina and think that she is an awful, awful, and stupid president.

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And yet Cristina won 54% of the vote in her last presidential election. The second-best candidate got just 17%. Obviously lots of Argentinians support her.

So in a free and fair election the Argentinian elite will get a left-wing president whom they loathe.

That’s where the military comes in.

For decades, every time that Argentina elected a person too far to the left for the generals, the military would charge in and kick him or her out with the support of the business elite (and often the United States).

This did enormous damage to the country. In fact, it’s hard to overstate just how bad the coups were for Argentina. In 1930, for instance, Argentina was a democracy with a popularly-elected president from what at the time would be considered the left. At the time, it was one of the most progressive countries in the world. Then General José Félix Uriburu assaulted the Casa Rosada, disposing President Hipólito Yrigoyen, and ushered in an “Infamous Decade” of military rule and stolen elections. This was a turning point in Argentinian history. It would be more than half a century before democracy recovered, and meanwhile the political chaos crushed the economy. If democracy had survived in 1930, Argentina might be as wealthy as Italy today.

One coup in particularly deserved to mentioned: the last and worst one. This occurred in 1976. Once again there was a left-wing president, the incompetent Isabel Perón, and in the usual pattern the military disposed of her:

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