Argentina was the poster child of U.S.-sponsored globalization in the 1990’s. As Dani Rodrik pointed out in the New Republic, “The country undertook more trade liberalization, tax reform, privatization, and financial reform than virtually any other country in Latin America.” So why were finance minister Cavallo and president de la Ru’a forced out of office […]
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Popular Uprising in the Barrio’s of Argentina May Spell Hope for Argentinean Proutists

Argentina was the poster child of U.S.-sponsored globalization in the 1990’s. As Dani Rodrik pointed out in
the New Republic, “The country undertook more trade liberalization, tax reform, privatization, and
financial reform than virtually any other country in Latin America.” So why were finance minister Cavallo
and president de la Ru’a forced out of office in December? The people had had enough. Enough joblessness,
enough austerity, enough service cuts, enough.

Cavallo and de la Ru’a were all about cow tow-ing to the international finance community, particularly the
IMF. They cut jobs, pensions, and government salaries. After massive protest in the waning days of 2001,
Cavallo and de la Rúa had to resign. Since then [**three] more presidents have resigned.

The current president, President Eduardo Duhalde, has made several moves that “appall Washington's orthodox
economic policymakers,” says the Washington Post. “Duhalde has blamed the U.S.-backed freemarket approach
for his nation's troubles and proclaimed it a ‘broken model,’ raising the specter that Latin America's
third-largest economy may turn away from globalization and spark a movement toward protectionism in a region
where President Bush had hoped to forge a hemisphere-wide free-trade zone,” said the Post in a January article.

In truth, the Argentine economy has been tumbling since 1997. In order to service national debt, public
enterprises were sold to foreign and domestic capitalists, and the new owners fired thousands of workers.
Unprofitable mineral and energy operations were closed, essentially eliminating the economies of entire
towns. Public workers were laid off or just not paid. Education, health care and other social services were
cut way back. Ironically, but not unsurprisingly, the Argentine bourgeoisie moved billions out of the country
following the crash that followed rampant foreign investment in the country. By 2001, unemployment surpassed
50 percent in some parts of the country, and the majority of households fell into poverty.

Clearly, the neoliberal model of globalization, that requires countries to maintain high international credit
ratings no matter what the domestic expense, was not working. It seems that Cavello and de la Rua had
bought in to a paradigm that the people of Argentina now know is flawed: that by allowing capitalist elites
to get rich off Argentina, Argentina also would benefit; that the deluge of capital into the country would
float all boats; that the profit potential of investors must always come before the needs of common people.

In the Barrio’s, the unemployed had had enough, both with austerity programs designed to appease the IMF,
and with party bosses and union bureaucrats who had done nothing to change their plight. The Unemployed
Workers Movement (MTD) started as a grass roots movement in the urban and suburban barrios. The
organization has a horizontal structure: the assembly makes decisions, and even negotiations with the
government takes place in front of assemblies. The MTD began organizing roadblocks in 2001 to have their
voices heard. Thousands of men, women, and children participated. The blockades had great popular support,
making it difficult for the gendarmes to arrest their leaders. The government had to negotiate.

The MTD demanded locally administered state-funded jobs, food relief, the freeing of political prisoners,
and investments in roads, water, and health facilities. The MTD didn’t want temporary jobs, but stable
employment at living wages. In General Mosconi, for example, the leaders of the MTD movement came up with
over three hundred project ideas, some of which have been implemented. These include a bakery, organic
gardens, water purifying plants, first aid clinics, and more.

The local unemployment committee in fact runs this town. In some suburbs, the unemployed movement also has
displaced the local government, setting up a parallel economy and offering a vision to the nation of the
capabilities of the unemployed to take command of their own destinies.

Interestingly, while the IMF--essentially an agent of U.S. capital--required Argentina to give up
sovereignty on fiscal matters, the US government itself is at this moment exercising the right to deficit
spending. George Bush sites the recession as justification for giving a Keynesian boost to our economy,
but when Argentina was in much worst economic straits, it was Washington’s position that budgets must
be balanced, never mind that unemployment was through the roof and Argentines and the domestic Argentine
economy were starving for lack of domestic spending. How does the U.S. government expect the Argentine
middle class to react to this kind of hypocrisy? One of the causes of economic depression and recessions in
capitalist economies is the reduction of the money flow due to its concentration in the hands of a few.
Since the majority under such circumsance has no purchasing capacity, the syndrome is self re-enforcing:
the rich have no incentive to invest in an economy that promises no returns. This clearly happened in
Argentina, which witnessed not only the flight of foreign capital, but also the withdrawal of billions of
dollars from the country by the Argentine bourgeoisie. Now common Argentineans can’t even get back the money
they’ve deposited in banks.

Argentine Proutists have responded to the situation with proposals of their own. Perhaps now more than ever,
disenfranchised Argentines are willing listen.

David Griffin is a freelance writer from Minneapolis, Minnesota, a copyeditor, and a member of the
Prout Journal editorial board.

References:
James, Petras, The Unemployed Workers Movement in Argentina, Monthly Review, 2002

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