1
Neoliberalism and its crisis
In an infamous television advert produced by the military junta in 1978, a man is shown against a blank background. In front of him, there is a chair with the sign ‘Industria nacional’ (National industry). As the man examines the chair, a voiceover points out that years of protectionist economic policies in Argentina had resulted in a local industry that, due to its near monopolistic status, tends to produce inferior quality products for a captive market. That the chair breaks when the man sits on it seems to demonstrate this point. He then turns to see, to his delight, many different chairs, all of them imported. The voiceover explains that the arrival of imported merchandise thanks to the reduction of import taxes not only will allow for a wider range of choices and better-quality goods but will also strengthen the national production, given the beneficial effects of unregulated competition.
Produced at a time of drastic free-market reforms that reduced import barriers and allowed for cheap imports, the advert was designed to spawn popular endorsement for the Proceso’s economic plan. Besides dipping import tariffs, the plans also included a severe increase in foreign debt, imposition of a pay freeze, and devaluation. The military junta announced these financial measures as a comprehensive attempt to replace the allegedly declining economic structures generated in Argentina during decades of import-substitution industrialisation (ISI). ISI had been the main economic paradigm in Latin America in the post-war period, its underpinnings being the belief that state-led industrialisation constituted the path to socio-economic development and, consequently, national sovereignty. By the time of the 1976 coup, the official rhetoric of the military and its allies, the elite economic establishment, was that the levels of state intervention and market regulation that ISI required were having a pernicious effect on the economy (as the television ad illustrates).1 Similar discourses proliferated in other parts of the Western world against embedded liberalism, which contributed to presenting the neoliberal reforms of the junta as inevitable and necessary while they were, in fact, part of a deliberate scheme to restore class power to the elites. This plan involved, first, a massive transfer of national income from, principally, the workers to the financial sector, transnational capital and the landowning oligarchy, and, secondly, the severe weakening of working-class mobilisation. Under ISI, the workers were the leading force behind industrial production and the primary consumers of manufactured goods. This central role in the dynamics of economic production also implied a high capacity for political organisation; this was precisely what the Proceso wanted to axe. Deindustrialisation, in this regard, was used along with state terrorism to socially disciple the masses. Contrary to what the chairs advert claimed, the arrival of imported goods was not aimed to strengthen local industry: it was meant to undo it. Job precarisation and unemployment, downward social mobility and the debilitation of trade unionism all contributed, along with political violence, to the disarticulation of working-class activism.
The project of the dictatorship, nonetheless, encompassed more than economic re-engineering and civic repression. The neoliberal turn carried out by the Proceso was also aimed to transform the way in which subjectivities were produced. ISI had been the economic pillar of a social model that included two dimensions: the first one was the recognition of the state as fundamentally responsible for producing and maintaining social cohesion, mainly through welfare, but also through mediating between the workers and the industrial bourgeoisie. The second dimension was the symbolical and material incorporation of the masses to the orbit of the nation along with the expansion of the middle class, all of which was framed under a conception of society as relatively homogeneous.2 Citizenship, in this framework, was defined mainly through access to socio-economic rights, which had to be provided and guaranteed by the state.
With its emphasis on the benefits of consumer choice for the individual, exemplified by the chairs advert, the Proceso introduced a shift in forms of citizenship. In a context in which most Argentinians did not have access to basic human and civil rights, one right was nonetheless positioned as fundamental: that of shopping. Citizens now could rest assured that their freedom to choose would be protected by the very same state that denied all other liberties – implicit was the fact that one had to be, as the person in the advert, white, middle class and, preferably, male. In fact, the freedom to consume, far from universal, relied on the material exclusion of broad sectors of society from, precisely, consumption. By positioning shopping as the fundamental right on which citizenship was founded, the dictatorship was signalling one of the essential aspects of the cultural changes taking place as the country made the transition to neoliberalism. The Proceso dismantled a model of society based on the social cohesion of identities rooted in work and locality and replaced it with an individualistic paradigm of citizenship constructed around consumer sovereignty.3 This model would find its hyperbolic manifestation years later, during the Menem administration, and would lead to the perception, among certain sectors of society, that through easy access to imports, credit and cheap dollars Argentinians had finally achieved their destiny as First World citizens. The subsequent explosion of this model at the turn of the twenty-first century due to impoverishment and unemployment would not only be experienced by Argentinians as an inability to exercise their rights to consume but as a comprehensive crisis of citizenship and national identity.
In 1983, when the country finally returned to democratic rule after seven years of dictatorship, it was drastically transformed in every possible sense. Despite having won with a broad mandate, Alfonsín was severely constrained throughout his presidency. He favoured gradual economic reform rather than a process of abrupt and comprehensive deregulation of the market and, in fact, in his first years, the official strategy was to strengthen the declining industrial sector and redistribute income. However, the government was progressively pushed towards more neoliberal positions: large foreign debt loomed continuously over the government and implied increasing interference in domestic policy from multilateral credit institutions like the International Monetary Fund and the World Bank. The national elite economic establishment also put constant pressure on Alfonsín’s administration, as did the trade unions, which were in the process of reconstitution. A series of military insurrections by sectors of the army that wanted to stop prosecutions of military human rights violators also exposed some of the government’s weaknesses.
In 1989, presidential elections took place amidst grave hyperinflation crises produced by the failure of Alfonsín’s successive economic plans, which had been systematically boycotted by local and transnational financial groups in what has been described as an ‘economic coup’.4 The Peronists, who were fully recovered from their 1983 electoral defeat, capitalised on people’s discontent and Menem won comfortably against Radical candidate Eduardo Angeloz. With inflation reaching 4,925 per cent and lootings taking place in the major cities, Alfonsín was forced to step down six months before his mandate was due. Menem’s coming to power marked a new approach by power groups in their attempt to continue and accentuate the neoliberal turn initiated in the 1970s, since this time this would be pursued by democratic means. Changes in the international context partly explained this change of strategy. The fall of the Berlin Wall, it was argued, implied that American-led globalisation was unavoidable and only a modernised open economy aligned with the United States would put Argentina in a more advantageous position to face this process. Argentina, in Foreign Minister Guido Di Tella’s words, was willing to have ‘relaciones carnales y abyectas con los Estados Unidos’ (carnal and abject relations with the United States). On the domestic front, the chaotic scenario of Alfonsín’s last years in power had facilitated support for an accentuation of neoliberal reforms. As had been the case during the Proceso, Menem presented his economic package not as a political decision but as the only possible course of action. For example, his 1989 address to the Congress on the occasion of the debate on the State Reform Law that would give the green light to widespread privatisation emphasises the urgency to take the ‘unavoidable’ measures that will allow the pursuit of (a rather vague) national greatness:
Vamos a privatizar todo aquello que sea necesario, no por una cuestión de dogma sino por una cuestión de necesidad … Como tantas veces lo señalé, yo no creo ni en el privatismo ni en el estatismo. Yo creo en el ‘Argentinismo’ con mayúsculas, no en la soberanía del hambre, del atraso y de la decadencia, sí en la soberanía que nos permita nuestra recuperación definitiva. Pero esto no significa, naturalmente, que reformar el estado sea simplemente sinónimo de privatizar empresas públicas. Se trata de un medio instrumental, insisto, para poder cumplir con nuestros verdaderos fines de justicia, independencia y soberanía … Entiendo que estamos en una encrucijada que trasciende en lo económico y lo político para ubicarse en lo cultural.5
(We are going to privatize as much as necessary, it’s not a question of dogma but of necessity … As I pointed out many times, I don’t believe in privatism or statism. I believe in ‘Argentinism’ with capital letters. I don’t believe in the sovereignty of hunger, backwardness and decadence; I believe in the sovereignty that will allow us to recover definitively. But this doesn’t mean, of course, that reforming the state is simply a synonym for privatising public companies. It’s an instrument, I insist, to fulfil our true aims of justice, independence and sovereignty … I understand that we’re at a crossroads that is cultural and goes beyond economic and political issues.)
Argentinismo is used here as an alternative to political ideology in an attempt to, precisely, de-politicise discourse and policy. Menem uses keywords from the Peronist rhetoric but hollows them out, transforming them into vague and general concepts that, because of their ambiguity, are beyond any set of ideological beliefs. After all, who could be against justice, independence and sovereignty in an abstract sense? The subsuming of the economic and the political into the cultural signifies the turning of neoliberalism into common sense.
The Convertibility Plan of 1991, designed by Menem’s Finance Minister Domingo Cavallo, was successful in tackling the hyperinflationary trend. It consisted of an orthodox plan of adjustment organised around fiscal tightening, a peg between the local currency peso and the dollar, and the unrestricted opening of the economy. What followed was a period of economic prosperity and consumer boom, propelled by large flows of foreign investment, with GDP growth of 12.7 per cent in 1991 and 11.9 per cent in 1992.6 Macroeconomic growth and stability was saluted by large sectors of the population. Economic gurus in Argentina and abroad praised Menem’s ‘economic miracle’. There were, apparently, many signs that Argentina had finally embraced the road to development: the abundance of imported goods and affordable credit, the modernisation of services, now under private ownership, and the Americanisation of infrastructure, expressed in modern shopping malls, luxury hotels and branches of international chains.
The initial effects of these reforms fostered a shared feeling of optimism amongst Argentinians, providing neoliberalism with the social validation it had lacked in the past. This was particularly so amongst members of the middle class, who saw their First World aspirations finally materialised. An Argentinian, it seemed, could finally buy the same products as an American or European, travel the world, and enjoy a lifestyle that had been denied in the past but to which many felt entitled. This was Argentina arriving at its historical ‘destiny’ of greatness.7 If the dictatorship had redefined the citizen primary as a consumer, now Argentinians could indulge themselves in the full exercise of their fundamental right. But more importantly, it was the final confirmation that Argentina did have an exceptional status within Latin America, one that put it in a position of proximity to the central countries – more developed and civilised and, also, whiter. This idea, which had shaped generations of Argentinians, had always appeared elusive, unattainable, utopic. It seemed to be materialising at last during the early 1990s.
The celebration of consumerism, frivolity and opulence characterised this period, which went on to be known as the fiesta menemista (the Menemist party). Menem himself was the embodiment of the spirit of the time: breaking the mould of the traditional Peronist politician, his behaviour at times resembled that of a celebrity. For a while, he drove a 120,000-dollar Ferrari Testarossa (a gift from an Italian businessman that he eventually, and reluctantly, returned) and presented himself as a womaniser. In one appearance on a popular television programme in 1990, Menem reacted with a laugh when asked about the multiple affairs attributed to him by the media: ‘¿Están preocupados o envidiosos?’ (Are you worried or jealous?), he asked. This exemplifies how he deliberately presented himself as the ‘Argentinian macho’: arrogant, witty and capable of seducing attractive women.
Menem’s integration of politics with what is known in Argentina as farándula (the showbiz world) acknowledged the increasing centrality of the media in social dynamics. As with other dimensions of the economy, the media experienced extreme concentration and oligopolisation in this period. This was propelled by the privatisation of television channels in 1990 and the rise of cable television during the decade: by the turn of the twenty-first century, Argentina had one of the largest pay television penetration rates in the world and the largest in Latin America.8 Television’s influence in the shaping of political life grew exponentially and, eventually, politics became subsumed under the logic of the mass media and showbiz.9 Ideologies and political debates were simplified and undermined to the detriment of the pre-eminence of the image and, specifically, of corporality.10 Menem proved to be extremely comfortable in the new mediatised scenario: he regularly appeared on television, although he tended to prefer comedy and entertainment shows rather than political programmes. He used his charismatic and colourful personality to advance a view of him as someone who had come to reform politics, favouring high-impact interventions rather than the debating of ideas and policies.11
This depoliticised mass-mediatised public persona introduced by Menem was embraced not just by the Peronists, but also by the entire political class. It was frequent for politicians to befriend local celebrities and, particularly, fashion models and actors, and to organise lavish parties in Miami and Punta del Este. Sexism was proudly exhibited. For example, prominent male political figures could often be seen on the evening television show A la cama con Moria (In Bed with Moria), in which a famous diva wearing sexy nightgowns interviewed personalities in bed. The guests, from all political parties, enthusiastically joined the presenter in conversations riddled with sexual innuendos. Some female politicians also joined this trend of celebrity-like behaviour. Noticias, one of the country’s leading magazines, featured María Julia Alsogaray on its cover wearing just a draped fur. Alsogaray was, at the time, in charge of overseeing the privatisation of the telephone company Entel.
Menemismo was also rooted on personalist tendencies that, although common in Argentinian politics in the past, found new manifestations in Menem. The concentration of power in the figure of the president was presented as a necessary evil in the face of the state of emergency the country was in during the hyperinflation episodes at the turn of the 1990s. Excessive concern for legality and respect for institutions, it was argued, could obstruct or slow down the procedures that the country needed to recover from the economic crisis. However, once the situation was stabilised, Menem continued to exercise power in autocratic ways. In ten years as president, he issued 545 executive decrees, thus systematically by-passing Congress. He also expanded the Supreme Court from five to nine members and appointed five close allies as justices, thus guaranteeing control over the power of the judiciary. Widespread corruption also marked these years: affaires d’état that involved kickbacks, peddling influence and, on some occasions, suspicious deaths and assassinations, became regular features. However, despite Menem’s frivolousness and autocratic tendencies and the government’s rampant corruption, he was re-elected by a large margin (44.94 per cent) in 1995, after a constitutional reform allowed him to stand for a second mandate. This revealed the extent to which his government had been able to build social consensus around neoliberalism.
Menem’s success in the polls could not hide the fact that the adverse outcomes of the economic model were increasingly co...