The Fitful Republic

Economy, Society, And Politics In Argentina

Juan E Corradi

• Publisher: Taylor & Francis
• Year: 2019
• Print ISBN: 9780367292171
• eBook ISBN: 9781000301458
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

This book explains the varied political roles played by agrarian and industrial groups in the modernization of Argentina. It seeks to account for the attainment of a high level of social complexity that has not, however, been matched by steady economic growth or political stability. What have been the determinants of economic growth in Argentina? In what sense does its capitalist development differ from that of other advanced societies? Under what conditions has that development taken place? The answers to these questions, states Professor Corradi, are woven into a picture of a society that follows a path flanked by authoritarianism and political disorder.

Part 1
Land of Promise

In a rock-stratum are embedded crystals of a mineral. Clefts and cracks occur, water filters in, and the crystals are gradually washed out so that in due course only their hollow mould remains. Then come volcanic outbursts which explode the mountain; molten masses pour in, stiffen, and crystallize out in their turn. But these are not free to do so in their own special forms. They must fill up the spaces that they find available. Thus there arise distorted forms, crystals whose inner structure contradicts their external shape, stones of one kind presenting the appearance of stones of another kind. The mineralogists call this phenomenon Pseudomorphosis.

By the term "historical pseudomorphosis" I propose to designate those cases in which an older alien Culture lies so massively over the land that a young Culture, born in this land, cannot get its breath and fails not only to achieve pure and specific expression-forms, but even to develop fully its own self-consciousness. All that wells up from the depths of the young soul is cast in the old moulds, young feelings stiffen in senile works, and instead of rearing itself up in its own creative power, it can only hate the distant power with a hate that grows to be monstrous.

—Oswald Spengler, The Decline of the West

1
The Colonial Legacy

The Uneven Development of Metropolises: Spain

Argentine underdevelopment and international dependency have their roots in the colonial period, in the specific manner in which Spanish mercantilism affected the River Plate region. Spain's search for precious metals led to the colonization of Latin America. Different regions developed at different rates according to their ability to service the requirements of the mother country for natural resources and labor. During the fifteenth century, the displacement of international commerce from the Eastern Mediterranean to the Atlantic fostered the supremacy of the maritime powers on the ocean and the North Sea. The discovery of the American continent—both a result and a catalyst of the world's commercial revolution—faced those powers with the challenge of directly organizing production by articulating capital and labor. The colonial territories were transformed into appendixes of a system designed to pump wealth into royal treasuries. There were different means of funneling the colonial surplus into metropolitan centers: royal enterprises managed by functionaries; indirect methods, such as taxation; and the participation of royal capital in private enterprises. The system rested on mercantilism and monopoly.

An important consequence of the agrarian and limited level of development of metropolitan economies was the restriction of exchange with the colonies to exotic comestibles, precious metals, and a few raw materials. Precarious means of transportation limited trade to products of high value and small volume.

The availability of natural resources and the accessibility to maritime routes of trade patterned settlement and colonization. The existence of exploitable labor was an essential consideration, and its supply was rendered more flexible by a large slave trade. The rigid pattern of centralization that characterized the metropolitan society was extended to the colonies. It prevented the formation of any class with strong local roots that would be tied more to local markets than to metropolitan interests. The situation in Latin America was the opposite of what existed in the New England colonies. Whereas in the latter, production was organized by autonomous settlers in small and medium-sized enterprises geared to dynamic local markets and the division of labor became fairly complex, in most of Latin America, large-scale monolithic enterprises utilizing slave or servile labor and under the management of merchants and landowners with links to the royal bureaucracy yielded a very different social and political order, characterized by rigid social stratification and external dependency. Under this system, economic growth increased the wealth of the metropolitan treasury and the colonial elites, but did not diversify the productive structure and did not develop the colonial economy.

Despite the creation of a vast overseas empire in the sixteenth century and its control of those areas until 1824, Spain itself was an economic dependency of Europe. From 1500 to 1700, Spain and Portugal expanded overseas, creating in turn dependent areas without much positive feedback. In the course of that process they failed to modernize their internal social and economic structures (Stein and Stein, 1970, Part 1).

That failure was not, however, an historical accident. Nor was it the product of a peculiar system of values. At the onset of its colonial experience, Spain was an imperfectly organized nation, an economy oriented to the export of a few primary products, a society lacking a dynamic bourgeoisie. Centuries of territorial expansion, the Reconquest, and the struggle against Muslim culture had strengthened the role of a militant aristocracy and the church. The exploitation of the colonies made the restructuring of the Spanish semifeudal, land-based, aristocratic economy and society unnecessary. The mercantilist expansion overseas in fact contributed to the development and entrenchment of the Spanish aristocracy, the bureaucracy, the service sector, and the church. As the economy—under the impact of capitalism—came to rest on foreign and colonial commerce, Spanish domestic manufacture contracted and raw materials were exported and returned as manufactured goods for domestic consumption and reexport to the colonies, while colonial gold and silver flowed to England to compensate for the deficit in the balance of trade. The acquisition of empire resulted in the proliferation of the patrimonial political structure. The military establishment was impressive, but Spain did not consolidate the economic and political bases of its might. Trade with the colonies was a monopoly benefiting the Crown and supporting large numbers of parasitic merchants. In fact Spain was the first "Latin American" nation in terms of most economic and social indicators. So acute was its dependency on other capitalist powers that by 1700 Spanish guild members were often front men for foreign merchants.

The aversion to manual labor, the importance of family connections, and the aristocratic life-style in general that so characterized Spanish culture cannot be tautologically derived from an alleged value system or national character. Nor can Spanish "feudalism" be explained solely in terms of its own social and political structure. These features of society are better understood in terms of the uneven development of capitalism, that is in terms of worldwide networks of dependency, conceived as a complex chain of metropolis-satellite relations in which each satellite "serves as an instrument to suck capital or economic surplus out of its own satellites and to channel part of this surplus to the world metropolis of which all are satellites" (Frank, 1969, 6). The colonial expansion not only laid the foundation of Latin American underdevelopment, it simultaneously reinforced the subordination of Spain and Portugal to the dominant capitalist economies of England, Holland, and France. Thus Western European, Iberian, and Ibero-American economies were interlocked by 1700. England became the dominant center of world capitalism—a process greatly accelerated by the industrial revolution. Spain, like Portugal, became an appendage of its colonies in America. The latter began to move toward the British orbit.

The Uneven Development of Colonies: Argentina

From 1500 to 1700, Spain developed a colonial mining sector to maintain its economy and international position. Mexico and Peru became the main poles of colonial development in the sixteenth century. This development took place through private entrepreneurship in which miners, merchants, and the state collaborated and shared the profits. Miners and merchants in America, merchants in Seville, and ultimately the bourgeoisie of Western Europe reaped the benefits accruing from the extraction of gold and silver and from the exploitation of Indian labor. Those benefits also paid for the administrative costs of empire and went to ecclesiastical and secular officials. The export orientation of Latin American economies was shaped during this period. Large estates with a relatively immobile labor force, devoted to agriculture and ranching, were the principal subsectors of the mining nuclei. On the ruins of preconquest agrarian societies, the Spaniards built a mining export sector and a supportive hacienda system with catastrophic consequences for the native populations. Disease, overwork, and culture shock were the price paid by those people for the remolding of communal societies along profit-oriented lines.

The colonial world was characterized by a striking contrast between the main export and production centers and the backward peripheral regions. In the former, the growth of services and the concentration of labor, the royal bureaucracies and their personnel produced a civilization of administrative cities, military garrisons, and busy export trade. In the peripheral regions, far away from established trade routes and deprived of the natural resources coveted at the time, scattered and poor populations barely made a living on subsistence crops and subsidiary production for the more dynamic regions. The territory of Argentina belonged during most of the colonial period to these imperial backwaters. The predominance of the Pacific port of Lima-Callao in the export of Peruvian gold and silver impeded the emergence of Buenos Aires as a commerical center until nearly two centuries after it was founded (1536— 1580).

The provinces—later the vice royalty—of the Río de la Plata were among the less adapted of all Spanish colonies in America to the commercial and economic policies of the Spanish imperium. They counted among the last territories to be added to the colonial empire. They were removed from the already established highways of transatlantic commerce, poor in readily exploitable mineral wealth, and thinly populated by nomadic societies. During most of the colonial period, the pulse of economic life in Argentina was faint indeed. The great pampa region was given over mainly to the hunting of wild cattle, an activity that could not be properly called stock raising, since no systematic effort was made to improve the breeds or to commercialize the produce. In the colonial estancias cattle were hunted and slaughtered mostly for their hides, the only good that could be shipped to export markets. Tallow was also exported, and a certain amount of salted beef was sent to the West Indies and Brazil. Eventually, sheep raising developed and some wool was exported. Here and there corn and wheat were raised, but flour had to be imported to feed the population of this finisterre. Despite the increase in the military and strategic importance of Buenos Aires, which in the eighteenth century led to the creation of a viceroyalty on the River Plate, the economy of Argentina remained rustic and picturesque, yet hardly productive. In point of fact, the socioeconomic configuration of Argentina was, throughout the colonial period and well into the nineteenth century, the opposite of what it looks today. As one traveled from the eastern seaboard toward the northwest, approaching the silver mines of Potosí, one met with increasing activity and prosperity, Raising mules and producing foodstuffs for the mines of Upper Peru gave impulse to the local economies. But this stimulus barely reached the grasslands of the littoral. There self-sufficiency and economic stagnation prevailed. The large landed estate—the latifundium—was the dominant form of property. The fiscal and political needs of the Crown in this region of scarce resources resulted in large land grants to individuals.

Though land ownership was concentrated early in a few hands, land values remained very low until the nineteenth century, when cattle breeding and grain culture in the pampas came to meet the needs of European industrial capitalism.

From the beginning, the basic interests of the River Plate territory were sacrificed to the interests of the Lima merchants and to those of the royal treasury. Mercantilist policies imposed the total prohibition of commerce. An open port on the shores of the River Plate would have made the whole territory east of the Andes commercially a tributary to Buenos Aires. Hence, if those markets were to be preserved for the commerce of Lima, it was essential that Buenos Aires be prevented from developing into a transit point for imports from Europe. Moreover, from the standpoint of royal fiscal policy, the concession of trading privileges to Buenos Aires had to result in the loss of revenue through contraband and a negative balance of trade. Thus Buenos Aires was closed to all overseas traffic until well past the middle of the eighteenth century. It was also isolated from internal markets by tariff walls, that is, internal, or so-called "dry" customs, and restrictions on the flow of specie. The Argentine economy was all but strangled. In order to survive, the colony waged a surreptitious struggle against those policies, mostly through contraband. As the population and wealth of the colony grew those restrictions were challenged more often and more openly.

The administrative and commercial reforms undertaken by the Bourbons in the eighteenth century liberalized or altogether abolished many of the restrictive measures and opened the gates to the economic development of the Rio de la Plata, and especially of Buenos Aires. The territories were at last in a position to utilize the advantages of the more direct route to markets through the port of Buenos Aires. Import prices fell and export prices rose. The province and the city of Buenos Aires were visibly at the head of the economic expansion of the eighteenth century. The province of Buenos Aires, and generally the pampa, was the most important producer of exportable commodities. The city now became the only port of a vast territory, the terminus and transit point of a large interprovincial and overseas commerce.

Yet Spain could not meet the challenge opened by the economic development of its colonies. It simply lacked the economic capacity to absorb all of the colony's produce and to satisfy the latter's growing demand for manufactures at a reasonable price. Spain functioned as an onerous intermediary between the River Plate and other countries, particularly England, which rapidly became the largest consumer of the colony's produce as well as the main supplier of commodities. The Spanish liberal reforms of the eighteenth century were bound to remain an empty gesture so long as Spain's economic advance continued to lag behind that of the rest of Western Europe and North America. Even the economic development of the colonies had outgrown the halfhearted liberalism of the Bourbons. Argentina, and Spanish America in general, were ready for a new pattern of dependency—a neocolonial pact with the new industrial powers.

Technically, the solution was opening the port of Buenos Aires to all commerce. However, such a liberalization of trade was hard to achieve without breaking the unity of the empire. Opening the port was a direct threat to the merchant-monopolists, who, together with the crown officials formed the upper crust of colonial society. Conversely, "free trade" would directly benefit the nonmonopolist merchants and the landowning cattle breeders. The latter became an interest group standing for free trade and its preservation through political independence. Their opponents included not only the peninsulares and the monopolists of Buenos Aires, but also the producers of the interior provinces who had been protected by the isolation of Buenos Aires from internal and external markets.

2
The Making of a Nation

Independence and Neocolonialism

By the end of the eighteenth century, when the viceroyalty of the Rio de la Plata—comprising what is now Argentina, Uruguay, Paraguay, and Bolivia—achieved economic importance, the Spanish Empire was subservient to British capitalism. Spain had regressed from first- to third-rate power status. English vessels not only carried goods to Spain for domestic sale and reexport to the colonies, but began to penetrate the Spanish dominions directly. France—a less dynamic power—was also competing for control of the trade with the Iberian world. Interested in preventing the collapse of Spain, in 1700 France succeeded in placing a Bourbon king on the Spanish throne. This event inaugurated a period of bureaucratic reform designed to prop the tottering imperium. These reforms, far from constituting a "bourgeois revolution," represented a variety of defensive modernization, which failed nonetheless to protect the empire from the massive encroachment of British capitalism. Those efforts most likely belong in the same historical category as the flurry of reforms under the dowager empress in early twentieth-century China. They came to naught as the end of eighteenth century approached. Spain entered a severe crisis, not just economic but political and military as well, which culminated with the collapse of central authority before the Napoleonic armies in 1808.

Britain's industrialization demanded raw materials for production and a direct access to Latin American markets. The growing economic potential of the River Plate region had already prompted British interest, and in 1806 and 1807 the Buenos Aires estancieros and merchants repelled two British invasions, without aid from Spain. When Napoleon occupied Spain and placed his brother on the throne, Argentines seized the opportunity to force upon the kingless viceroy a document granting them free trade with England. This act amounted to a declaration of economic independence, or rather a shift toward a new type of dependency. It was soon followed by political independence. In 1810 the Buenos Aires liberals set up an autonomous governing junta. Six years later the de facto independence was ratified by a national congress. Representative government and independence were the ideological rallying cries of the porteño coalition of merchants and landowners.

A question that has troubled Argentines since at least the nineteenth century is this; Why did two once-colonial areas, the United States and Argentina, develop so differently after independence? The question has often received fantastic answers.

By 1870 the United States had emerged as perhaps the second industrial nation of the world, while Argentina became a major producer of staples and foodstuffs for Europe. The comparative question is especially poignant since the environment in which the English settled was similar in important ways to that of the first Iberian colonists in the Rio de la Plata. In both cases settlers hoped to discover mines of precious metals. Yet no mines were found. Even if they had been found, labor to operate them was not readily available, for West Europeans in the River Plate region as well as in North America did not have to confront or incorporate substantial Indian cultures. They pushed aside the nomadic Amerindian inhabitants, killed most of them, and isolated the survivors on unproductive lands. True, Indians and the offspring of unions between Spaniards and Indians formed a substantial sector of the early colonial population of Argentina. Since then, however, successive waves of immigration absorbed most of the mestizos and drove the Indians into remote parts of the national territory. The Indian of Argentina ultimately remained as unincorporated and forgotten as the Indian of the United States. At present, the combined Indian and mestizo population constitutes less than 3 percent of the national total. Agriculture was unknown among the Indians of Argentina except in the northwestern part of the territory, where some rudimentary cultivation was practiced. Almost all of the indigenous groups were nomadic and depended on hunting and gathering as their primary means of subsistence. The population remained scattered in small groups.

The indigenous cultures were almost immediately changed by contact with the Spaniards who arrived in the sixteenth century. The most important factor in the change was the acquisition of horses that had escaped from Spanish settlements. The introduction of the horse created greater mobility and ease in hunting, which led to t...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Dedication
• Contents
• Foreword
• Preface
• Acknowledgments
• Introduction
• Part 1 Land of Promise
• Part 2 Uneasy Under One Roof
• Part 3 Time for Evildoers
• Selected Bibliography
• Other Titles of Interest from Westview Press
• About the Book and Author
• Index