The United States might be the next Argentina

[Judi Lynn]

By Matt O'Brien

December 22 at 10:22 AM



Argentina could have been the United States.

Like the U.S., it was one of the world's 10 richest countries at the turn of the last century. And also like the U.S., that made it a New World magnet for Old World immigrants. But unlike the U.S., that was as good as it ever got. There was no Argentinian Dream. Just a nearly never-ending nightmare of either falling behind gradually or falling behind suddenly. All of which was self-inflicted.

Its fundamental problem was how unequal it was. About 300 families controlled most of the land, the economy, and the government. Everyone else was just a cog in their beef-and-grain-exporting machine. Or, as the Financial Times's Alan Beattie has put it, Argentina is "what North America might have looked" like "if the South had won the Civil War and gone on to dominate the North." Which is to say that it was a semi-feudal aristocracy dependent on a steady supply of cheap labor.

If this sounds like a good way to start a class war, that's because it was. Up until recently, Argentina had spent most of the last 100 years alternating between left-wing populists who promised to share the country's wealth, and right-wing military dictatorships that tried to stop that from happening. And, of course, with the stakes so high, neither side was willing to play by the rules. The Peronists tried to tip elections in their favor by locking up the opposition's leaders, shutting down their newspapers, and getting rid of unions that weren't loyal to the regime. The army, meanwhile, didn't bother with any kind of democratic pretense. It launched coup after coup after coup, outlawing the Peronist Party, and, in the 1970s, "disappearing" tens of thousands of activists and ordinary people too.

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https://www.washingtonpost.com/news/wonk/wp/2016/12/22/the-united-states-might-be-the-next-argentina/?utm_term=.1039a00b8d71

[raccoon]

1. Thanks for posting. This really makes it clear:

Or, as the Financial Times's Alan Beattie has put it, Argentina is "what North America might have looked" like "if the South had won the Civil War and gone on to dominate the North."

[tenorly]

4. Beattie's phrasing probably describes Brazil better than it does Argentina.

Brazil, like the Antebellum South, had a large-scale plantation economy and millions of African slaves.

To this day, Brazilian society is highly segregated according to race and class - and the two are very closely connected in Latin America.

Argentina did still have a lot of peonage - particularly in the north - until Perón outlawed it in 1944; but slavery itself never really took hold, even in the colonial era (i.e. before 1813, when it too was banned).

What they did have a lot of - and still do, though to a much lesser extent - is wage slavery.

These days, the median monthly full-time pay in Argentina is around $1,200 - compared to $4,600 in the U.S. (although Argentina's cost of living is about half as much). Real pay improved considerably during the Kirchner era (2003-15); but they still have a long way to go.

[sab390]

2. This is the norm

Most places today, outside of Western Europe, Canada, the U.S., New Zealand etc. have 1% wealthy, 6 or 7% middle class and the rest are poor. Up until the 20th Century that was the norm. Creating a middle class takes effort. FDR, the war, the GI bill, unions, the building of the interstate system and the rest of our infrastructure created ours. For the last 37 years we have been destroying it. Middle class is a virtuous cycle, the more you have the more you get. The lost is a viscous cycle, the more you lose, the faster the lost becomes. In all sciences everything reverts to the norm. Except biology. Let's root for biology, or we will be back to the norm, Argentina.

[tenorly]

3. True - but Argentina is somewhere in between.

While its middle class is smaller than those in most developed countries, it can safely be said to describe close to half of Argentine households (i.e. those with a decent income, house/apartment, car, savings, etc.). The rest are about evenly divided between the working class and the poor; those in extreme poverty (around 10%) are in fact mostly immigrants or their children.

Here's a link to World Bank (IADB) income bracket data for Latin America: http://www.iadb.org/en/research-and-data//poverty,7526.html

Since they use purchasing power parity (which translates local costs to U.S. prices in dollars), we can assume that households earning less than $12.40 per person per day ($18,000 for a family of four) are poor.

That would, according to the IADB, be 26% in Argentina - but 64% in Latin America as a whole. Its two neighbors - Uruguay (33%) and Chile (46%) - are the only other nations in the region with less than 50% poverty, using the above definition.

It's been improving (notably in Bolivia, Brazil, and Colombia); but developing a large middle class does indeed take a long time.