Saturday, February 14, 2009

The United States of Argentina

From the American Conservative magazine comes this cautionary tale of woe:
Anyone not alarmed by the state of the U.S. economy is not paying attention. As our Dear Leader begins his term, the theory of very big government has the support of an alarmingly broad political consensus. Despite the obvious dangers—devastating inflation and the ruin of the dollar—the United States seems pledged to a debt-funded spending spree of gargantuan proportions.

In opposing this trend, critics face the problem that the perils to which they point sound very theoretical and abstract. Perhaps Zimbabwe prints its currency in multi-trillion units, but that’s a singularly backward African dictatorship: the situation has nothing to do with us. Yet an example closer to home might be more instructive. Unlike Zimbabwe, this story involves a flourishing Western country with a large middle class that nevertheless managed to spend its way into banana-republic status by means very similar to those now being proposed in Washington.

The country in question is Argentina, and even mentioning the name might initially make any comparison seem tenuous. The United States is a superpower with a huge economy. Argentina is a political and economic joke, a global weakling legendary for endemic economic crises. Between them and us, surely, a great gulf is fixed. Yet Argentina did not always have its present meager status, nor did its poverty result from some inherent Latin American affinity for crisis and corruption. A century ago, Argentina was one of the world’s emerging powers, seemingly destined to outpace all but the greatest imperial states. Today it is … Argentina. A national decline on that scale did not just happen: it was the result of decades of struggle and systematic endeavor, led by the nation’s elite. As the nation’s greatest writer, Jorge Luis Borges, once remarked, only generations of statesmanship could have prevented Argentina from becoming a world power.
...
The country was killed by political decisions, and the primary culprit was Juan Perón. He dominated political life through the 1940s and ruled officially as president from 1946 to 1955, returning briefly in the 1970s. Although he did not begin the process, he completed the transformation of Argentine government so that the state became both an object of plunder and an instrument for plunder.

Perón came from a fascist and corporatist mindset, which became more aggressively populist under the influence of his second wife Eva. They aimed their rhetoric against the nation’s rich, a designation that was swiftly expanded to cover most of the propertied middle classes, who became an enemy to be defeated and humiliated. To equalize the supposed struggle between the rich and the dispossessed, the Peróns exalted the liberating role of the state. The bureaucracy swelled alarmingly as nationalization brought key sectors of the economy under official control. Government bought loyalty through a massive program of social spending while fostering the growth of labor unions, which became intimate allies of the governing party. Argentina came to be the most unionized nation in Latin America. Perón also ended any pretense of the independence of the judiciary, purging and intimidating judges about whom he had any doubts and replacing them with minions. [emphasis added]

The Peronist model—a New Deal on steroids—evolved into an effective clientelism, in which party overlords and labor bosses ruled through a mixture of corruption and violence. Clientelism, in effect, means the annexation of state resources for the benefit of political parties and private networks. Right now, both the word and the concept are not terribly familiar to Americans, but this is one Latin American export that they may soon need to get used to. ...

Article here. The road to socialism, like the road to hell, is paved with good intentions. Go read the whole thing.

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