All Commentary
Friday, December 1, 1989

Argentina at the Crossroads


Mr. Cooper is an export/import manager in New York. He visited Argentina in November 1988.

Statism has promised much to the Argentine people. But over the past 50 years, it has brought violence, corruption, unemployment, soaring inflation, and bitter disappointment. There is, however, a vibrant and growing Argentine movement that offers another choice—a classical liberal/libertarian movement dedicated to free markets and individual liberty.

For approximately 90 years, from 1853 to 1943, the classical liberal system of constitutional government, private property, and free trade held sway in Argentina. The country prospered. But not all Argentines were satisfied. Many of the urban masses felt cheated by the system. As time went by, theft feelings of resentment and nationalism grew and merged. Different groups and leaders came and went, speaking for the disaffected Argentines. Then, in 1943, while Communism and Fascism menaced Europe, came the man whose legacy still haunts Argentina—Juan Perón.

Peronism as a doctrine is very vague, although Perón wrote many books and speeches. In essence, it is statist, protectionist, nationalist, and corporatist. Perón himself admired Franco and Mussolini. In 1949, Perón promulgated a constitution modeled after Fascist Italy, which enhanced presidential powers, increased central control, and contained corporatist features, especially regarding unions.

The Peronist system resembles that of PRI-dominated Mexico, seeking to integrate business and labor unions into a network of state-dependent and politically connected parts of a statist political machine. Although Peronism directs its appeal to the masses with heavy doses of envy, it does not ignore businessmen, whom it supports with protectionist trade policies and state subsidies. Thus, there were and are Peronist businessmen. Unlike Mexico, however, Peronism relies on the charismatic personality of the leader to whip up enthusiasm against foreign and domestic enemies, especially Britain.

After the disgrace of the military junta in their failed 1982 invasion of the Falkland Islands, Argentina returned to democracy. The Radicals surprisingly defeated the Peronists and elected Raul Alfonsin, barred from re-election by the Constitution. The Radicals talked about privatization, but did little about it. The country has continued its slide, and the military is restive because of low pay and the trials of officers for their role in the “dirty war” of 1976-1983 in which thousands of leftists disappeared.

Argentina’s economic malaise is plain for all to see. While the country’s standard of living was comparable to Canada before World War II, Argentina is now slipping into the ranks of the Third World. Inflation is so high that advertisements for homes and cars quote prices in American dollars.

What went wrong? Per6n and his successors, military or civilian, Peronist or Radical, built up a massive state apparatus and a private industrial sector sheltered by a rigidly protectionist system. There are 353 state enterprises, including those owned by the military. One such enterprise is LADE, offering airline service to civilians, but owned by the armed forces.

When Argentina was rich, it built railroads, subways, and phone systems. Since statism took control, these have deteriorated. The Argentines have public services that don’t serve. Three million dollars a day are lost on a rail system which should be visited by antique railroad buffs. YPF, the state oil monopoly, manages to lose money. Worst of all is the phone system, ENTEL, which has more employees than Nippon Telephone and Telegraph in a country with less than one-third the people. Twenty year waits for phones are normal. Journalist Bernardo Neustadt, a convert to the free market philosophy, proposed privatizing the phone system. Two hundred ENTEL unionists came to the radio station to physically attack him.

Pervasive state control and corruption go hand in hand. In frontier San Juan province, the former governor Leopoldo Bravo purged some in-dependent-minded legislators from his Bloquista party. The newspaper El Dinrio de Hoy supported the legislators and their corruption charges. The newspaper’s owners soon found themselves being pressured by the provincial tax bureau and other state agencies. The paper, however, still survives.

Who speaks out against the statism that has ruined Argentina? The liberales (liberals) represent the individualist, free market alternative to the dominant statist ideologies. Argentina possesses an individualist movement that is impressive in its activism and dedication. Like their American counterparts in the libertarian movement, the Argentines have pursued three paths: political, academic, and popular education.

Argentine individualists point to many national heroes as their forerunners, just as Americans do to the Revolutionary War heroes. Manuel Belgrano (1770-1820) and Mariano Moreno (1778-1811) fought to gain independence from Spain. Juan Bautista Alberdi (1810-1884) and Domingo F. Sarmiento (1811- 1888) were admirers of the British classical liberals and the United States. They helped to overthrow the Rosas dictatorship in 1852. Alberdi drafted the 1853 Constitution, modeled after that of the United States. More recently, there was the writer Jorge Luis Borges (1899-1986).

Borges declared himself an individualist and “an anarchist in the Spencerian sense.” Borges vigorously denounced Per6n as a Fascist, andstrongly opposed nationalism and Communism. I had the pleasure of seeing a talk by Borges taped at ESEADE (a post-graduate business school emphasizing Austrian economic principles). Borges was asked by an unidentified American why he did not write more on politics and individualism. Borges replied, “I am a mere storyteller, not a politician.”

UCeDe

The Argentine individualists take political action principally through the Union del Centro Democático (Union of the Democratic Center, usually referred to as UCeDe), which together with other “liberal” parties, regionalist parties, and some conservatives form the Alianza de Centro (Alliance of the Center). The UCeDe was founded by Alvaro Alsogaray, who was the Alianza’s candidate for president in 1989. The UCeDe’s strength is growing, and although Al-sogaray received only 6 percent of the popular vote in the May 1989 elections, the party did increase its seats in the Congress.

The UCeDe actively seeks new supporters. Literature tables selling the magazine Tiempo de Acción Liberal (“Time of Liberal Action”) and campaign paraphernalia attract passers-by in Calle Florida and elsewhere. The UCeDe and its partners organize “Centros Civicos” (civic centers) to promote individualism and democracy. A cook named Carlos Villalba formed the Centro Cívico “Obrero Liberal” (Liberal Worker) in a slum neighborhood and signed up 630 families out of 1200 for the UCeDe. Villalba is one of the many converts to classical liberalism won by Adelina de Viola, the successful UCeDe candidate for Congresswoman from the federal district of Buenos Aires.

The Argentines are fond of clubs and social gatherings. Tiempo de Acción Liberal runs a column by Susana Herrera reporting on local UCeDe activities, such as the pasta parties (“No-quis Liberales”—“Noquis” means “gnocchi”) of the Movimiento de Acción Liberal (Movement of Liberal Action). These pasta parties feature political leaders, dancing, food, drink, and even a raffle. Two popular education groups of individualists, the Escuela de Educaci6n Económica y Filosofía de la Libertad (School of Economic Education and Philosophy of Liberty) and the Círculo de la Libertad (Circle of Liberty, a sort of individualist social club), both meet at the headquarters of the Movimiento de Acción Liberal in Buenos Aires.

The Argentine classical liberals/libertarians attract noticeably more women to their ranks of activists than seems common in the United States. Women participate actively in the Centros Cívi-cos and the youth arm of the UCeDe, Juventud Ucedeista (Young UCeDe’s). The UCeDe’s candidate for Senator from Buenos Aires was Maria Julia Alsogaray, a Congresswoman and daughter of Alvaro Alsogaray. And there is the highly popular Congresswoman Adelina de Viola.

The Argentine liberales rally to defend the 1853 Constitution against the changes proposed by the Peronists and Radicals, who seek to expand the government’s (and their own) power. Although imperfect, the 1853 charter (which was brought back into force in 1957) is a brake on statism, according to Enrique Cerda Omiste of the Fundación Carlos Pellegrini (Carlos Pellegri-ni Foundation, named after the President who restored Argentina to solvency in the 1890s). Fun-daci6n Carlos Pellegrini is an educational group concerned with foreign affairs, values, and education, trying to combat the debasement of civic life inherent in statism.

The Centro de Estudios Sobre la Libertad (Center for Studies on Liberty) works diligently to propagate the ideals of individual liberty, private property, and free markets in Argentina. Founded by Alberto Benegas Lynch St. and some friends in 1957 under the name “Centro de Di-fusión de la Economía Libre,” the Centro is perhaps the most important single classical liberal/libertarian organization in Argentina.

Still headed by Dr. Benegas Lynch, the Centro de Estudios Sobre la Libertad is modeled after the Foundation for Economic Education. Like FEE, the Centro publishes pamphlets, books, and a magazine like The Freeman named Ideas Sobre la Libertad (Ideas on Liberty). Dr. Bane-gas Lynch brought Ludwig von Mises, Friedrich Hayek, Leonard Read, and other free market luminaries to lecture in Argentina. The Mises lec tures are now available in print, in both English and Spanish. (English title: Economic Policy: Thoughts for Today and Tomorrow)

Alberto Benegas Lynch graciously received me in his home in Buenos Aires. Dr. Benegas Lynchexpressed high hopes for the future as the competing brands of statism have all been discredited. He is cheered that young people are turning to free market individualism. Some of this shift can be attributed to Dr. Banegas Lynch and the Centro de Estudios Sobre la Libertad program of scholarships for study in the United States for many of the key professors of law and social sciences who are contributing to Argentine individualism today. Their efforts show in student elections at the University of Buenos Aires (UBA) where the liberales won in the faculty of law and three others.

The Centro de Estudios Sobre la Libertad presents seminars and lectures on free markets and individual liberty throughout Argentina. This program is directed by Dr. Eduardo Marty, professor of law and economics at UBA, with help from UBA law and accounting student, Alejan-dra Rojo.

ESEADE: An Emphasis on Austrian Economics

The Eseuela Superior de Economía y Admin-istración de Empresas (ESEADE, meaning Higher School of Economies and Business Administration) is a graduate business school emphasizing the Austrian school of economics. It publishes the journal Libertas, conducts a program of lectures taped on video (such as the one with Borges), and runs short seminars on economics and liberty for the general public. The president is Dr. Alberto Benegas Lynch Jr., one of the first students that the Centro de Estudios Sobre la Libertad sent to the United States.

The Instituto de la Economía Social de Merca-do (Institute of the Social Market Economy) was founded by UCeDe leader Alvaro Alsogaray. Dr. Martin Krause, their Director of Programs, explained to me that they focus on human rights (including human rights violations in Cuba), privatization, and free trade. They publish a magazine and run essay contests for students with prizes of study in the United States. Their most recent winner, Dr. Alfredo A. A. Solari, professor of law at the University of Buenos Aires, studied at FEE in June and July of 1989.

The Instituto de Estudios Contemporáneos (Institute of Contemporary Studies) was founded by Marcos Victorica as a think tank like the Cato Institute in Washington, D.C., with a public policy focus. It studies the informal economy, deregulation, and privatization. Most notably, it sponsored the book, El Estado y Yo por Juan Garcia (taxista) (The State and Me by Juan Garcia, taxi-driver), written by Faustino A. Fernandez Sasso.

I attended the presentation of the book at El Ateneo bookstore in Buenos Aires. About 160 people came to hear about a book they had never seen. People stood about 20 deep in the rear to listen to the four panelists (Sasso, Adelina de Viola, Marcos Victorica, and journalist Bernardo Neustadt) discuss the book.

El Estado y Yo presents a forceful and funny case for limiting the state in the interests of the people. Sasso writes in a popular style with familiar stereotypes (the Japanese laundryman and the Galician Spanish bar owner). Juan Garcia, the story’s taxi- driver, is Everyman, struggling to get by and lead his family to a better life. With facts and figures, Garcia shows the elephantine size of the state and its mammoth inefficiency. One memorable remark was “The country is full of functionaries, but nothing functions.”

The Argentine classical liberal/libertarian movement is gaining ground. Over 50 percent of the public favor some privatization. Monica Mat-urano of the Instituto de Estudios Contemporáneos stresses how Argentines of her generation—in their 20s and 30s—have been disillusioned with statism, which simply doesn’t work. The Argentine movement for liberty, like the nation itself, stands at a crossroads.