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OPINION AND ANALYSIS | 07-03-2020 14:16

Down with greed

Alberto is far from being the only local politician who takes it for granted that a proper government should be more than able to make the economy dance to its tune.

Like Roman emperor Diocletian, Alberto Fernández is convinced that fighting inflation means telling shopkeepers, suppliers, manufacturers and the rest of them that if they continue to raise prices, they will be harshly punished for their antisocial behaviour. In terms not that different from those used in the famous Edict of 301 AD, the president says he will be “implacable and inflexible” when it comes to dealing with unscrupulous profiteers who extort money from honest people by overcharging them for what they desperately need. Fortunately for such miscreants, Argentina is averse to the death penalty (which was liberally applied in the Roman Empire), but perhaps the government will come up with something almost as unpleasant to make them do its bidding.

However, even if it does succeed in frightening some of them, the results, if any, of its endeavours will in all probability be as unimpressive as were those of Diocletian and of the many regimes – some dictatorial, others merely populist – which took their cue from him. As the ruthless emperor soon discovered, inflation is the result of rather more than what the writers of the Edict roundly condemned as “limitless and furious greed.” Historians report that, after a few hectic months, shortages on a massive scale made him repeal it and put his faith in monetarist measures designed to strengthen the denarius, which he supplemented with a new coin called, appealingly, the argenteus. As a result, a modicum of price stability was eventually restored.

Alberto is far from being the only local politician who takes it for granted that a proper government should be more than able to make the economy dance to its tune. Most Peronists and unreformed Radicals are of this opinion and accuse anyone rash enough to disagree of being mercenaries in the pay of vile commercial interests or the US Embassy. The current economy minister, Martin Guzmán, won applause when he told parliamentarians he would resist attempts by foreign investment funds to influence policy, by which he presumably meant he would not let himself be intimidated by the markets. In fact, much Peronist criticism of Mauricio Macri’s performance in office is based on the idea that he allowed himself to be pushed around by market forces a tougher president would have treated with contempt.

It was widely expected that Alberto would use last Sunday’s address to Congress to outline his economic game plan, but, to the disappointment of many, he said little about what he proposes to do once all that debt business is finally cleared up. However, to judge by his performance so far and by his frequent public statements, he is a strong believer in the merits of state intervention, that is to say, in the ability of the country’s bureaucrats, prodded by their political masters, to steer Argentina towards prosperity, and will rely on their wisdom and efficiency to get the job done.

This approach may endear Alberto to much of the political elite of which he is a fairly typical representative, but it does not go down that well in other quarters where it is understood that Argentina’s descent, which is gathering pace, from the heights she reached a hundred years ago has had much to do with the misplaced confidence of politicians in their collective ability to manage the economy without paying attention to the difficulties that trouble their counterparts in less privileged parts of the world. Many politicos and progressive types, some of whom hold government posts, who say they want to protect the country’s inhabitants from capitalist savages who seek to exploit them, take pleasure in defying international finance.

This suggests that for recovery to be more than just a pipe dream, the country’s political leaders would have to take a closer look at how the markets work and do their best to accommodate them.

For the time being at any rate, the chances of anything like this happening are close to zero. As far as Alberto, Cristina and their friends are concerned, the economy – and with it much of the country’s population – is there to support what one might call the political-bureaucratic complex, the many institutions and ancillary entities which over the years have grown bigger and increasingly expensive. It now squats on Argentina like Philip Larkin’s toad, keeping people down by stifling initiative and demanding ever more from the dwindling number who have yet to belong to it.

Guzmán has already told us that until further notice, nothing will be done to slim down the notoriously obese public sector, which expanded mightily when Cristina ruled the country and continued to put on weight, though at a less frantic pace, under Macri. Instead, the government will make an even greater effort to ensure the glutton gets enough to eat by extracting more money from farmers, who at any moment could retaliate by going on strike, and the surviving businessmen. This policy virtually guarantees that the next few years will see things get even grimmer than they already are.

In recent weeks, more and more people – including many who on the whole back Alberto’s government – have started to worry about its failure to get anything moving. Some attribute this to the ongoing conflict between the president’s faction and the one led by Cristina, others to the questionable quality of the men and women who have been given key positions for blatantly political or, in some cases, personal reasons. They feel that, in view of the dire state of the country, he should try to make more use of its considerable human capital rather than limiting himself to satisfying political bosses he needs to keep on good terms with.

Alberto disagrees. He wants people to think his is an extraordinarily talented government dominated by “scientists,” not CEOs like those recruited by Macri. Apparently, the “sciences” the president has in mind are the ones sceptics describe as “soft,” such as sociology and anthropology, which lend themselves to a greater degree of politicisation than those deemed “hard,” not that giving the top jobs to specialists in nuclear physics or organic chemistry would be an obvious improvement. In any event, intriguing though the idea of “scientific Peronism” may be, if the achievements of “scientific socialism” are anything to go by, it could be far worse than the unscientific original.

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James Neilson

James Neilson

Former editor of the Buenos Aires Herald (1979-1986).

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