Sinking Argentina (HUM415/HUM455)

One of the questions we could ask about the 2001 economic collapse in Argentina is to what extent that event is related to 1) neoliberalism as a general set of policies and 2) Argentina’s historically specific political culture. Generally speaking, when developing nations perform poorly in economic terms, global financial institutions such as the IMF and the World Bank locate blame in the corruption of local elites. We would probably be foolish to argue that what happened in Argentina was purely a product of neoliberalism in the abstract. Instead, we ought to acknowledge the extent to which political figures such as Menem and Cavallos actively participated in and abetted corrupt practices.

On the other hand, most of us have been trained to accept the “bad apples” theory of social dysfunction at the expense of thinking structurally. So while there is compelling evidence that the political class in Argentina “got drunk” (as G.W. Bush said about Wall Street) let’s keep our focus on the main theme of the course– “the darker aspects of global capitalism” and think about how Ana Maria Shua’s novel fictionalizes the local effects (in Argentina) of forces that shape the world.

Foreign capital’s historical rule over local economies in Latin America– and the ways that rule has profoundly impacted national sovereignty– has a name: economic imperialism. The “i-word” hasn’t been particularly popular in the United States, in part because it is almost always used as a pejorative. Yet there are plenty of people across the political spectrum who agree that the US is an empire– whether its people want it to be one or not. For example, those global economic institutions mentioned above– the IMF and the World Bank (as well as the WTO)– reflect the overwhelming influence of the US because of its economic power. The IMF in particular– headquartered in Washington, D.C.– is a creature of the United States. The US is the only IMF member capable of blocking a supermajority by itself because “votes” in the IMF translate into the amount of money a country contributes to the fund.

The clips we watched on Thursday are drawn from a documentary film titled Memorias del Sacqueo directed by famed Argentine filmmaker Fernando Solanas and somewhat dubiously translated into English as Social Genocide (though if you recall Naomi Klein’s discussion of the term genocide then we can see why this title was chosen). I really recommend it, as I strongly recommend reading Ellen Meiksins Wood’s short essay in our reader “Democracy as Ideology of Imperialism.” For a thumbnail sketch of the crisis in Argentina, consider the following excerpt from Manfred Steger’s Globalization: A Very Short Introduction:

“Less than a decade ago, IMF and World Bank officials held up Argentina as a ‘model developing country.’ Having accepted substantial structural adjustment programmes that led to the privatization of state enterprises, the reduction of tariffs, and the elimination of many social programmes, the Argentine government celebrated low unemployment rates, a stable currency pegged to the dollar, and strong foreign investment. For a few short years, neoliberal economics seemed vindicated. However, as the IMF demanded even stronger austerity measures in return for new loans, the Argentine economy went sour. In June 2000, the country was paralysed by mass strikes against the government’s new austerity package designed to meet IMF deficit guidelines and thus retain access to the Fund’s $7.2 billion emergency line of credit. In January 2002, after months of violent street protests in major cities, Argentina formally defaulted on its massive public debt of $141 billion. In order to prevent the complete financial and social collapse of his nation, Eduardo Duhalde, the country’s fifth president in only two weeks, further limited people’s access to their savings deposits and decoupled the peso from the dollar. Within hours, the currency lost a third of its value, robbing ordinary people of the fruits of their labor. ‘Argentina is broke, sunk,’ the President admitted, ‘and this [neoliberal] model has swept everything away with it.’”