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International Socialism, May 1976


John Bowman

Argentina: The End of the Peronist Road


From International Socialism (1st series), No.88, May 1976, pp.30-34.
Transcribed & marked up by Einde O’Callaghan for ETOL.


At the time of writing, March 24, the Argentine military have just overthrown the government of President Isabel Peron, thus ending 34 months of ‘democratic’ Peronist government. It is evident that the prospects for the Argentine working class, which were grim before, can only get worse. However it is important to be clear about the exact nature of the Argentine situation to avoid falling into the tempting trap of generalising about ‘another Latin American coup’.

The first thing that has to be said about Argentina is that, despite the popular image, it is not primarily a land of cattle ranchers. lt is an overwhelmingly industrialised, urbanised capitalist state, one of the highest developed outside Western Europe, Japan and the US. Out of a population of about 24 millions nearly 9 million live in the Greater Buenos Aires area, where the bulk of the industrial capacity is to be found. Also of importance as industrial centres are Rosario (population 900,000) and the inland city of Cordoba (population 1 million) where the giant Renault and Fiat car plants are to be found with their support industries. Industry and a large service sector, deriving from the needs of an advanced capitalism and its state, long ago displaced agriculture as the major source of employment and national wealth. The industrial working class created by this capitalist development is one of the best organised in Latin America and indeed in the whole capitalist world. The overall rate of unionisation is between 25 and 30 per cent but in sectors like engineering, manufacturing and the state services the rate is far higher. In total, the Central Confederation of Labour, the CGT, organises some 2 to 2½ million workers.

The agrarian sector is still of course very important, particularly as it provides most of the exports and foreign exchange needed for industrial imports, and ultimately the country’s balance of payments and its standing in the international financial world depend a lot on the fortunes of the wheat and cattle farmers. Argentine agriculture has, almost from its inception under the Spaniards, been thoroughly capitalist in nature. There was virtually no native indigenous population to expropriate, enserf or ultimately drive onto tiny subsistence farming plots. From very early on Argentine agriculture was employing a rural proletariat. In a word there are very few peasants in Argentina.

Another crucial aspect of capitalist development in Argentina has been the role of the state usually under military control in reorienting, at vital moments, the direction of the capitalist system. Military coups have usually heralded a new stage in capitalist development and a new balance of power within the ruling class. This happened with Peron in the mid 40s (see Box I). With the collapse of the Argentine Communist Party into popular frontism with the ‘democratic’ conservatives during the war and with a policy of social benefits and wage increases undreamed of before him, Peron effectively ensured the domination of a very paternalistic reformism over the working class.

Peronism: The Background

Towards the end of Peron’s second government it became evident to the Argentine capitalist class that state protected industrialisation based on light consumer goods manufacture was reaching its limits as a viable form of capitalist accumulation and development. A shift was begun towards investment in heavy industry; the production of the means of production. The state increasingly provided during the next twenty years, 1953-73, much of the infrastructure necessary for this development. The Argentine state provided everything from electricity, gas and petrol to steel, ships and aircraft, as well as controlling the transport and communication system. The armed forces took on the role of guardians and final arbiters of this strategy of development and their interconnections with growing monopolist bourgeoisie that benefited from the process increased continuously. Their task was essentially twofold. To ensure the predominance of the big capitalists over other sectors of the Argentine bourgeoisie – the agrarian interests and the middle size capitalists – who in purely political terms were much stronger and whose governments could not be relied on to consistently impose the required policies.

This explains the military’s overthrow of two bourgeois democratic governments in 1962 and 1966. In 1966 they decided to do away with traditional bourgeois politics altogether and to institute a system of open domination. Their second major task was to control and repress the inevitable social conflict that this policy created. This led to the growth of an enormous system of state organised repression – the institutionalisation of state violence.

The basis of this capitalist development project was of course the increased exploitation of the Argentine working class. Rationalisation, wage freeze, the smashing of militant unions have been a common feature of the last twenty odd years in Argentina. The global productivity of Argentine industry has more than quadrupled. Any form of worker control of the conditions of production has been completely smashed; the discipline inside most Argentine factories is military in its intensity. The share of wages in the GNP fell by nearly 12 per cent in the 1955-73 period. Real wages have in general declined fairly consistently. The Argentine working class has reacted to this attack with defensive actions that were unrivalled anywhere else in the world except in Chile in 1972 and ’73. The most spectacular and profound of these responses were the two urban insurrections in the city of Cordoba in 1969 and 1971, led by the Fiat and Renault car workers. However these struggles remained confined within the overall reformist concepts of Peronism. The Peronist trade union bureaucracy which maintained its control over the unions throughout this period were always able to ultimately absorb or head off worker reaction to capitalist attack, sometimes by placing themselves at the head of the struggle, other times by co-operating in its repression.

For all the heroism and vitality of its struggles, the working class in this period never developed an independent working class politics. This is not to say that certain of the most advanced sectors of the class did not start to go beyond Peronism. This did start to occur particularly in the Cordoba car plants but in general the workers after six years of direct military rule looked, in March 1973, to an electoral return of Peron as a solution to their economic demands. And the military, who had been sufficiently scared by the working class mobilisation, were prepared to allow Peron back in the hope that he could more directly control and pacify the workers.

The other major development in the period leading up to the return of Peron was the growth of petit bourgeois guerrilla groups. Increasingly being driven to the wall by the development of monopoly capitalism in Argentina, especially from 1966 onwards, they began to embrace an anti-monopoly, anti-imperialism that saw the main struggle in Argentina as that of national liberation against Yankee Imperialism – in an alliance with ‘anti-imperialist sections’ of the national bourgeoisie. They naturally turned to Peronism for a political creed. Peron used them to frighten the military and the big bourgeoisie into negotiating his return.

The period of Peronist government from the elections of 1973 until the present coup represented a growing capitalist crisis. After an initial year of prosperity, the last 18 months have seen an almost incredible spiral of inflation, reaching a level of over 500 per cent per annum, the growth of an enormous black market, the collapse of investment. This has been accompanied by a terrifying wave of right wing violence – whose main victims have been working class militants. Peron’s main economic policy was to continue the Argentine capitalist development project of the previous 20 years, only with adaptations to meet the new needs.

In particular, sections of the ruling class wanted a renegotiation of some areas of investment with foreign capital. It is important to be clear about this. Although the attraction of foreign capital was considered an essential part of Argentina’s capitalist development over the last 20 years, the amount of foreign investment was, relatively speaking, very small – perhaps 3.5 per cent of total fixed capital. At no time did control of the industrial infastructure pass from the hands of the Argentine capitalists and their state. Industrial investment in fact was usually financed by short term international credits rather than by massive foreign investment. The problem for the Argentine capitalists was that what foreign investment there was happened to be in those areas where the real super profits were to be made – cars, electrical engineering. It was also precisely these areas which provided the real chance for Argentine exports to break into the world market – a thing Argentine capitalism was increasingly conning to realise was necessary if it was to continue to remain viable. This was the essential core of Peron’s ‘anti-imperialism’, well symbolised in the deal signed by Fiat of Argentina in 1973 with Cuba which provided Fiat trucks with national Argentine tyres on them.

Herein lay the real failure of the radicalised petit bourgeoisie that flooded into Peronism in the late 60s and of the vast majority of the ‘marxist’ left. Proclaiming Argentina a colony of Yankee Imperialism, or at best a semi-colony, and ignoring the intensive capitalist development of the last 20 years, their main strategy was the formation of a National Liberation Front with sections of the middle classes and progressive ‘national’ capitalists. And of course, if you are looking for the mass base of such a National Liberation Front in Argentina the logical place to look was Peronism – the grand-dad of all multi-class ‘anti-imperialist’ movements. The main political objective of this liberation front based on Peronism would be the achievement of national independence; the main enemy Yankee Imperialism and their henchmen, the landowning oligarchy and a very small number of big capitalists. After national independence had been achieved – the vital step here was seen as Peron’s election victory in 1973 – then a gradual move could be made towards socialism. In other words it was a classic stages theory which meant, in effect, the subordinating of the working classes struggle against capitalism to the more immediately urgent problem of national independence. This perspective was shared by most left groups even if they did not go into Peronism – and in practice it meant that they had very little with which to combat Peronism among Argentine workers.

The perspective bore little resemblance to reality. Argentina’s problem is not one of an underdeveloped semi-colony whose industrial development is hindered by imperialist plunder. Nor is the main internal enemy a landowning oligarchy, whose political power had in fact been on the wane for over 20 years. Argentina’s problems are those created by a developed capitalism – of a peculiar type to be sure – faced with the need to continue its expansion in an increasingly crisis-ridden world system. Peron after becoming President in 1973, tried to help solve these problems. This led to growing desperation and disillusionment among the ‘anti-imperialist’ petit bourgeoisie. But their response, especially of the largest group, the Montoneros, was a retreat into terrorism and guerrilla warfare. They did not change their basic conception of the struggle in Argentina – they still called for a multi-class national liberation front, only this time a ‘genuine’ one.

Much of the non-Peronist left did the same. The ERP guerrillas, despite their constant opposition to Peron, politically had no alternative to offer the working class. They still call for a Patriotic Front. The continued stagism of the Montoneros and the Peronist Youth, who do have a genuine influence among many workers, meant that they were often very ambigious when faced with working class opposition to Peronist economic policy. At one stage in 1973 they were telling workers who worked in firms with Euopean capital, say Renault, that they should not oppose their bosses since the ‘primary contradiction’for the ‘Argentine people’ was not with European capital but with US imperialism. For a long time they refused to support workers who struck against Peron’s wage freeze. Only last year, during the general strike of July, they argued that the workers had to demand credits for the small and medium national capitalists and their main slogan was The struggle for national unity led by the workers’. Throughout the crisis of the last year their main emphasis has been on proposing solutions to a crisis they see as forced on Argentina by imperialist exploitation and abetted by the ‘fascist’ clique around Isabel Peron, together with a few monopolists. If anything their popular frontism has increased – and there were rumours before the coup that they were proposing a broad alliance of national unity to fight national elections that had been promised in December. The left offered very little alternative – the main Maoist party, which had some influence in the Cordoba car plants, saw the main enemy as Soviet imperialism, and supported Isabelita on the basis that she opposed this Soviet threat. On these grounds they opposed last year’s massive general strike. The Argentine Communist Party, after years of calling Peronism fascist, had by the 1970s decided it was a progressive anti-imperialist force. They spent most of their time warning Peron of the dangers of a reactionary coup. The Fourth Internationalist group, the Socialist Workers Party, although carrying on very serious industrial work, tended towards a chronic political electoral opportunism. The ERP themselves offered the alternative of a broad Patriotic Front fighting the army in the jungles of Tucuman, 800 miles away from the heartland of Argentine capitalism. (See Box II)

In this situation the working class has launched massive defensive struggles, particularly last year’s general strike,in conditions of state terror, and great economic hardship; testimony to an amazing combative tradition. But politically it has not achieved a class alternative to capitalist crisis. This is exactly what Argentina faces now and what is at the root of the coup. In many ways it is a crisis very similar to that affecting the rest of the capitalist world – though Argentina as a subordinate capitalist state in world terms is in a bad position to deal with it. The immediate origins of the crisis are to be found in the boom of Peron’s first 15 months in office. In this period there was a fairly strict price code in operation, in return for the union bureaucracy’s promise of a wage standstill. It was an Argentine version of the social contract. It was supported by the Argentine monopoly bourgeoisie who were prepared to make some concessions in return for social peace and relative price stabilisation. Moreover, a good part of their production was sold outside of Argentina at international prices. This also coincided with the boom phase of the capitalist cycle, production increased and unemployment fell from over 6 per cent when the Peronists returned to power to 2 per cent 15 months later. The workers in many cases used this greatly improved bargaining position to make up for the fall in real wages they had suffered under the military. Effectively, many of them ignored the social contract. Profit margins particularly for the medium and small capitalists plummeted, made worse by the government’s price code. Inflation started to take off – made worse by the inflated price Argentina was paying for the industrial imports stimulated by the boom. Faced with falling rate of profit many capitalists simply stopped investing. Even the big capitalists began to panic. Recession set in – at the time of the coup basic infrastructural production on machinery etc had declined 8 per cent in a year. Raw steel production was down 6 per cent, rolled steel products had declined by 47 per cent.

Major Forces on the Left in Argentina

Last June a stabilisation plan was introduced to ‘shock’ the economy – effectively by cutting real wages even more and greatly increasing unemployment, thus restoring profit margins. The problem was the working class response it engendered – a spontaneous mass general strike. Faced with this, and with pressure from the union bureaucracy, its most important ally, Isabel Peron’s government backtracked. In the last year all sections of the ruling class have completely lost their confidence in the Peronist government’s capacity to solve the crisis.

They were especially worried by the union bureaucracy’s insistence on keeping employment rates at a far higher level than the actual production warranted. This was largely done through legislation such as the labour contracts law that made it very difficult to sack workers. This was the minimum the union leadership demanded if they were to control the workers. Thus the traditional solution to capitalism’s crisis was obviously very difficult to push through.

Major Non-Left Parties

In these circumstances the Argentine ruling class looked to its traditional saviour in time of crisis – the armed forces. One of the first measures of the military government has been to suspend trade unions and all political parties. Obviously both the traditional bourgeois democracy and the union bureaucracy had become counter productive to Argentine capitalism. There will obviously be both a vicious economic attack on the working class and increased state repression of working class militants. But Argentina is not Chile. If one is talking of violence and terror, then the Argentine working class has suffered that for the last two years before the coup. In recent months one person every five hours was being killed. Moreover, Argentine capitalism, despite the crisis it has been going through, is basically far stronger and more viable than Chilean capitalism. Nor does the Argentine bourgeoisie yet face a potential challenge to its very existence from significant numbers of workers who are beginning to break with reformism and look towards a revolutionary solution to their everyday problems.

The immediate result of the coup may well be the strengthening of the guerrilla groups as a natural response to military repression. But the possibility will also exist that amongst the most combative sectors of the class the revolutionary socialist groups that do exist, and which do pose the central axis of any struggle in Argentina as being the conflict between working class and capitalism, both international and national, will increasingly find an audience for revolutionary politics.

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