Profits and Terror in Argentina in the 1970s
Profits and Terror in Argentina in the 1970s
New data on the profitability of Argentina’s largest corporations help explain the origins of its last military dictatorship
by Joe Francis / February 20th, 2015
During Argentina’s military dictatorship of 1976-1983, up to 30,000 people were killed by the armed forces. Figure 1 provides an indication of why.
The thick line is a ‘profit margin index’ of the fifty largest private manufacturing companies during 1958-1985. These data were compiled from the rankings of Argentina’s largest industrial companies, which have been published in various business magazines since the late 1950s. The average profit margin (that is, profits divided by sales) was then calculated for each of the top fifty companies in each year from 1958 to 1985. The result is an unconventional but simple method of measuring profitability – necessary in this case because there is a lack of data on large corporations’ profits in Argentina.
Until the military coup of 1976, there was a close negative correlation between the profit margin index and real wages. The correlation began in the late 1950s – an era of low wages and high profits, during which numerous transnational corporations established themselves in Argentina. For the next decade and a half, however, wages rose and profits fell during a period of increasingly radical social unrest, characterised by simultaneous and conflicting movements to both democratise society and to establish a ‘corporatist’ order based upon the government’s regulation of the class struggle.1 Both social movements proved disastrous for big business, in that they led to large companies losing control of the prices that they both paid and charged. The result was the profitability crisis shown in Figure 1.
The tendency toward rising wages and falling profit margins was reversed decisively after the military coup of 24th March 1976. On the first anniversary of the coup, the journalist Rodolfo Walsh described how the reversal had been achieved:
In the economic policy of this government we must seek not only the explanation of its crimes but also a greater atrocity that punishes millions of human beings with a planned misery. In one year they reduced the workers’ real wages by forty percent, reduced their participation in the national income to thirty percent, increased the working day that is needed to purchase the family basket [of basic goods] from six to eighteen hours, resuscitating forms of forced labour that do not persist even in the last colonial redoubts. Freezing wages with the butt of a gun while prices are increased at the point of the bayonet, abolishing every form of collective bargaining, prohibiting assemblies and internal committees, increasing working hours, raising unemployment to a record ten percent, and promising to increase it even more with 300,000 new redundancies – all of this has brought productive relations back to the beginning of the industrial era. And when workers have wanted to protest they have been called subversives, with the kidnapping of entire groups of unionists, some of whom reappear dead, while others do not reappear at all.2,3
More:
http://dissidentvoice.org/2015/02/profits-and-terror-in-argentina-in-the-1970s/
