"governing" Argentina: 1976-1983

[from Luis Alberto Romero's A History of Argentina in the Twentieth Century, tr. James P. Brennan, Pennsylvania State, 1994]

The so-called Process of National Reorganization, or the Process as it was simply called, entailed the coexistence of a clandestine terrorist state in charge of repression and another visible one, subject to the norms established by the military government itself but submitting its actions to a certain legal scrutiny. In practice, this distinction was not maintained, and the ilegal clandestine state was corroding, corrupting the state institutions in their entirety and the state's very juridical foundations.

Admiral Emilio Eduardo Massera, General Jorge Rafael Videla,
& Air Force Brigadier Orlando Ramón Agosti

The first ambiguity was found precisely where power resided. Despite the fact that a strong executive was an Argentine tradition and that the unity of command was always one of the principles of the armed forces, the authority of the president – who in the beginning was a first among equals and then not even that – turned out to be weak and subject to permanent scrutiny, with restraints imposed by the commanders of the three services. The Statute of the Process and the subsequent complementary government decrees – which shut down the congress, purged the judicial system, and prohibited political activity – created the Military Junta, with power to designate the president and control many of his actions. The problem was that no one's powers were clearly delineated but were rather the result of the changing balance of forces. A newly created Advisory Legislative Commission, made up of three representatives of each branch subordinate to the orders of their commanders, was another instance of alliances and confrontations. To top it off, every executive position, from governors to mayors, as well as the administration of state companies and other government agencies, was divided among the armed forces. Those who occupied these positions thus depended on a double chain of command: that of the state and that of their service branch. This amounted to a feudalized anarchy rather than a state made cohesive and constituted through executive power.

The same anarchy existed with respect to the legal norms that the government provided itself. There was confusion about the very nature of these norms – laws, decrees, and state regulations being jumbled together without criteria – as well as who had the power to declare them and what was the full extent of their powers. There was also a well-known reluctance to discuss the reason for such norms; even their very existence was on occasion a secret. The military government preferred omnibus laws and frequently granted itself broad discretionary powers, but also tolerated the repeated violation or only partial fulfillment of its own legislation. Contaminated by the clandestine terrorist state, the country's entire juridical structure was similarly affected, to the point that there were practically no legal limits on the exercise of power, which functioned as the discretionary power of the state. This corruption of purpose was extended to public administration, where the most able personnel were removed. Arbitrary decisions were made by minor bureaucrats, transformed into little dictators without control and lacking the ability to assert control themselves. . . .

General Roberto Viola

Fragmentation of power, centrifugal tendencies, and anarchy were the product of the strict division of power among the three armed service branches, to the point that there was no means of requesting a final appeal to authority that might arbitrate in the event of conflicts between the branches. But such a state of affairs was also the result of the existence of clear factions in the army, where from the repression emerged true warlords, generals Videla and Roberto Viola – Videla's second-in-command in the army – the most powerful factions were established, but even these were far from dominant.

Minister of Economy José Alfredo Martínez de Hoz

These commanders backed Martínez de Hoz – a figure criticized by the more nationalist military officers, who abounded in the ranks of younger officers – but they recognized the necessity of finding some political solution in the future. They maintained communication with the leadership of the political parties, who hoped that this group represented the most reasonable and even the most progressive sector of the military, perhaps because it was the faction that recognized the need to control the repression in some way.

General Ramón J. Camps

Other groups, whose most prominent figures were the generals Luciano Benjamín Menéndez and Carlos Suárez Mason, commanders of the army's Third Corps and First Corps with their headquarters in Córdoba and Buenos Aires, respectively, and the chief of police of Buenos Aires province, General Ramón J. Camps, a key figure in the repression, maintained that the dictatorship should continue sine die and that the repression – which these figures carried out with special savagery – should be taken to its final consequences. . . .

Admiral Emilio Eduardo Massera

The third group in the military was that of the navy, firmly led by its commander, Admiral Emilio Eduardo Massera, who, trusting in his own political talents, proposed to find a political agreement that would popularly legitimize the Process and at the same time carry him to power. Massera, who carried out a major part of the repression from the navy mechanics' school and gained distinction in that sinister competition, always played his own game. He harried Videla to limit his power and distanced himself from Martínez de Hoz. He took great pains to find issues and causes that would win some degree of popular support for the government . . . When he retired, Massera established a political think tank, his own newspaper, an international publicity agency based in Paris, a political party – Social Democracy – and a bizarre personal staff made up of former members of the guerrilla organizations kidnapped and imprisoned in the navy mechanics' school, who agreed to collaborate in the admiral's political projects. . . .

In summary, the politics of order began to fail among the armed forces themselves, because the military behaved in an undisciplined and factional manner and did little to maintain the order that it sought to impost on society. Nevertheless, for five years, the military managed to secure a relative peace, a peace of the tomb, owing to society's scant ability to respond, partly because it had been battered or threatened by the repression and partly because it was disposed to tolerate a great deal from a government that, after the preceding chaos, had promised a minimum order.

"the state decisively intervened"

[from Luis Alberto Romero's A History of Argentina in the Twentieth Century, tr. James P. Brennan, Pennsylvania State, 1994]

As in Peronist Argentina, in the United States and Europe the state decisively intervened, presiding over economic reconstruction and mediating complex agreements between business and labor. But this increasing power of the state – of the interventionist and welfare state – was accompanied by an integration and liberalization of economic relations in the capitalist world.

In 1947, the Bretton Woods monetary agreements established the dollar as the global currency, and capital began to move freely again in the world. Those countries shut off from the outside world grew fewer in number, and multinationals began to establish themselves in markets that had previously been prohibited. For the countries whose economies had grown based on the internal market and in carefully protected fashion, as in the case of the Latin American, particularly Argentine, economy, the International Monetary Fund (IMF) – a financial entity that had enormous power in the new context – proposed so-called orthodox policies: stabilizing the currency by abandoning unrestrained monetary emission, ceasing to subsidize "artificial" sectors, opening markets, and stimulating traditional export activities

Nevertheless, an alternative policy gradually began to be formulated, elaborated especially bh the United Nations' Economic Commission for Latin America (ECLA). ECLA proposed that the "developed" countries help the "undeveloped" ones to eliminate the factors responsible for their backwardness through appropriate investments in key sectors, accompanied by "structural" reforms, such as agrarian reform. From that point on, the "monetary" and "structuralist" remedies competed in public opinion and as government policies. It might be thought that both strategies were in the end complementary, but for the time being they had different political representations; whereas the first led to revitalizing the old foreign economic partners, oligarchic sectors, and perhaps dictatorship, the second compelled deep changes: modernization of society that would be crowned by the establishment of stable democracies, similar to those of the developed countries.

To adapt itself to this world of reconstituted capitalism, liberalism, and democracy, it was not enough to restore constitutional order to Argentina and put an end to the vestiges of a regine inspired by the authoritarian governments of the interwar years. It was necessary to modernize and make adjustments in the economy, to transform the productive apparatus. After 1955, proposals to open up the economy and to modernize were shared values in Argentina. But the methods to be used for this transformation generated deep disputes between those who trusted foreign capital and those, from the nationalist tradition that had nourished Peronism or from the anti-imperialist left, who were distrustful of it. The debates, which dominated two subsequent decades, revolved around how either to attract or to control foreign capital. Some local business sectors discovered the advantages of an association with foreign capital, but others that had grown and consolidated themselves under state protection felt they were certain victims, either from competition or from the ending of protection. These firms sought to hinder growth of foreign capital, and they found a welcome reception not only among nationalists and the left, but also among the majority of political parties.

Businesspeople, domestic or foreign, agreed that any modernization needed to alter the status achieved by the workers under Peronism. As it already had indicated at the end of the Peronist regime, business sought to reduce the workers' share of national income and also to increase productivity, rationalizing jobs and reducing the size of the labor force. These aims entailed curtailing the power of the unions and also the power that the workers, protected by legislation, had achieved on the shop floor. Cutting back wages and recovering management's authority in the workplace were the principal objectives in a general sentiment running against the status of greater equality achieved by the workers and the peculiar practice of citizenship on which Peronism had been based. Demands for a certain business rationalization combined with resentments that were difficult to admit but were undoubtedly strong among those who had made common cause against Perón.

Here was the greatest obstacle. As Juan Carlos Torre noted, at issue was a now-mature working class, well defended in a labor market, approaching near full employment, homogenous, and with a clear social and political identify.

Salta's failure to thrive

[from El Tribuno, 25 May 2011]

The Salta Province, as viewed through social indicators, is among the most fragile in Argentina & generally has the highest unemployment, as well as typical shortages of underdevelopment: housing, drinking water, sanitary services, etc. Add to this an enormous educational deficit: many Salteños haven't even finished elementary school & many are illiterate, the qualitative deficit due to insufficient public schools. In terms of sanitation, the situation is no less dramatic, with the appearance or reappearance of purportedly eradicated illnesses & "minor" problems, of the respiratory type, for example, with chronic symptoms, suffered by a large part of the population. Not to speak of the incontestable advance of drugs among youth, which can be seen by looking around the bleakest neighborhoods & in some cases neighborhoods not so bleak. For example, the violence & insecurity that accompany these symptoms of underdevelopment can't be ignored, with daily news of robberes, murders, fights, etc.

barrio postergado

To raise your social awareness, read on . . .

Este problema está presente también, por supuesto, en ciudades “ricas”, como la Capital Federal, Córdoba, Mendoza o Rosario. Sin embargo, la magnitud del subdesarrollo de Salta probablemente no tiene parangón, y solamente es superada por pocas provincias argentinas, habida cuenta de la enorme proporción de habitantes de la ciudad capital de Salta y porciones significativas de población del norte provincial que padecen las condiciones de subdesarrollo descriptas.

La situación podría ser explicable si Salta fuera una provincia con limitaciones de territorio, rigurosidades de clima, o estructuras productivas de monocultivo o producción de un número limitado de bienes y servicios, como ocurre con otras provincias argentinas. Sin embargo, Salta tiene una enorme extensión, posee todos los climas y tiene una estructura productiva razonablemente diversificada. ¿A qué se debe entonces el subdesarrollo estructural de Salta?

Una probable explicación de la persistencia en el tiempo del subdesarrollo es la indiferencia absoluta que despierta el problema en la dirigencia política en general y en el gobierno en particular. En efecto, desde la esfera oficial no solo se niega el problema, sino que se apela a explicaciones que están a mitad de camino entre el ridículo y el racismo, como cuando se sostiene que las medias y desvíos estándares que se aplican en general para establecer el grado de desnutrición no son aplicables en Salta, como si nuestros comprovincianos pertenecieran a otra población, no humana o subhumana. Por otra parte, en las propuestas de los partidos políticos por lo general no se menciona el problema, excepto de manera vaga y elíptica y sin que se exhiban programas concretos para superar este endémico flagelo.

¿Cómo eliminar el subdesarrollo? Naturalmente, el problema es gigantesco y no se puede contestar ni pretender resolverlo desde un artículo periodístico. Sin embargo, debe ser claro que un inexcusable punto de partida para salir del subdesarrollo es la aceptación de que el problema existe. En segundo lugar, debe ser claro también que el subdesarrollo se perpetúa por la incapacidad del sistema educativo de Salta para contener a la población que debe ser formada y para brindarle herramientas que les posibiliten a los jóvenes salteños encontrar empleo genuino. En tercer lugar, y como forma más o menos inmediata para dar respuestas a la desocupación y hasta tanto se modifique el perfil de formación de los jóvenes, se debería contemplar un mecanismo generalizado de empleo que tendría que provenir, en gran parte, de un amplio plan de obras públicas, con el compromiso expreso de contratar mano de obra salteña, ya que las tareas requeridas no son de gran complejidad y se pueden realizar con el entrenamiento mínimo necesario.

Naturalmente, los detalles de cada una de estas premisas básicas son todo un tema en sí mismo que no puede abordarse aquí. Sin embargo, sí puede añadirse algo de importancia al respecto, y es que los recursos necesarios no son desproporcionados con relación a las posibilidades presupuestarias: en buena medida se conseguirían eliminando los gastos reservados -que se ha probado que son más que excesivos- y suprimiendo la gigantesca propaganda oficial.

Argentina's military-industrial complex by the early 1980s

[from Daniel Poneman's Argentina: Democracy on Trial, Paragon, 1987; photos from FM's current website]

Not surprisingly, over the years the Argentina military has become an economic powerhouse, in land, labor, and capital. The army is one of the biggest landowners in Argentina. By 1983, there were 153,000 soldiers in uniform, and military spending comprised 12 percent of the national budget. Each branch of the armed forces owns or controls a domain of large state enterprises. The air force writ runs to aircraft production, the national airlines, air insurance, and travel agencies. The navy presides over a complex including a merchant fleet, shipyards, weapons research and production.

The army has the big kid on the block, drily denominated the General Directorate of Military Factories, known as FM. FM was Argentina's first state-owned heavy industry, born of the vision of General Manuel Savio, who saw Argentina's industrial incapacity as a grave weakness that the army could greatly reduce. The Great Depression cut Argentina off from its traditional source of capital imports, Great Britain. The Second World War confirmed that the British would no longer be in a position to supply Argentine needs for arms or capital investments. This development could lead to disastrous consequences if Argentina were drawn into the war, especially since the Government's pro-Axis sympathies led the United States to embargo arms shipments to Argentina while generously supplying archrival Brazil.

Although free-market conservatives controlled the Congress, by 1941 Argentina's disquieting isolation earned their consent to the creation of FM. The law creating FM called for research and development of Argentine industrial and mineral capabilities to ensure the ability to mobilize industry onto a wartime footing. Once established, Argentina's newly developed strategic industries would be divested to the private sector.

Location of FM factories & establishments

Somehow expansion, not divestiture, became the norm. For all their talk of free enterprise, the military governments after Perón had little desire to reduce their own economic influence by giving away FM installations. Philosophically, officers felt more at home with the statist solution; vital tasks should be left to the government on national security grounds. This began in the military sphere, with arms factories, but in time it spread throughout the economy, sometimes on the flimsiest grounds. "Telephones. Yes. Lines of communication. Better let the army have a hand in the National Telephone Company." And so on. The boards of directors of state enterprises provided an excellent source of retirement income for ex-officers.

Vested military interests in continued state ownership became an enormous obstacle to privatization plans. Even Martínez de Hoz, the great free marketeer, could not cajole (let alone force) the military to surrender to the free market. "We couldn't privatize," complained one former economics ministry official from the Process. "As they say, the army has everything on the ground, the navy everything in the water, the air force everything in the air." Civilian governments generally lacked the free market instinct, as well as the political clout, to attack this bastion of military privilege.

So military enterprises grew and grew. By the 1980s, they employed over 40,000 and billed some $1.5 billion in sales annually. In its strong years, FM comprised 5 percent of gross domestic product. It operated fourteen military factories directly, producing weaponry, explosives, chemicals, steel, electrical conductors. It maintained a hammerlock on the mining sector. But FM's direct activities tell only a part of the story; it also holds large shareholdings in other companies and mixed state-private enterprises, especially in the fields of steel and petrochemicals production. That included 99.9 percent of the shares of Somisa, Argentina's largest steel company.

FM progressed far beyond Savio's wildest dreams, perhaps beyond his wildest fears. Its mandate grew apace with its scale. In addition to supplying for war, FM became charged with the task of stimulating industrial development in low profit or long lead-time industries. FM historians cite Robert McNamara to justify this approach; the former secretary of defense had said that "security is development and without development there can be no security." So FM expansion into the private sector helped prepare military factories for quick wartime mobilization, by keeping them fully-occupied producing consumer goods in peacetime. With this strained logic, FM became a producer of armchairs, subway cars, hunting arms, and ammunition. Seventy percent of total sales went to the private sector; 98 percent of the receipts of the giant Zapla steel furnaces in Jujuy Province came from the private sector.

Through their own companies and influence over other state enterprises, the armed forces squatly occupied an important segment of the internal market. This afforded enormous influence over Argentine economics and politics. Through this complex, the military controlled budgets and jobs; it could favor some concerns by investing in them and squeeze out others by competing with them. Its weight in the corridors of political power gave it a leg up in getting a hold of government funds. Since the state contributed half of the national total in fixed capital investment, it became prudent in private companies to appoint a well-connected, retired officer to the board of directors. The military companies themselves also directed substantial revenues to the armed forces.

Inevitably, military production ran up the diseconomics of scale typical of unwieldy state enterprises. Until 1980, FM received substantial government subsidies and tax breaks. This favoritism encouraged inefficiency in FM enterprises, while stacking the deck against private enterprises who could not successfully enter the market due to the monopoly competition. According to National Deputy Alvaro Alsogaray, FM poured "hundreds of millions of dollars" into Hipasam S.A. to mine iron ore in northern Patagonia, an investment "that will never produce any benefit." Duplication of effort is the rule; the army and the navy each produce their own gunpowder, as well as a host of other products.

Vigilance & Air Control Radar Project