Jeremy AdelmanFallingdictatorshipsandtroubledtransitionstodemocracyinLatinAmericahavedominatedtheagendaofsocialscientistsoftheregion.Theseregimechangeshavelargelybeenappraisedwithinconjuncturesofsuddenlyshiftingpoliticalbalancesandeconomiccrises.Suchanapproachseemsallthemorevalidinlightofthecontemporaneousappearanceofevents:the swingtoelectedgovernmentsgatheredspeedintheearly1980sjustastheinternationaldebtcrisishitLatinAmericawithfullforce.InArgentina,thecrisisculminatedin1982 withtheMalvinas/FalklandsWar,thefallofthemilitary,debouchingintothetriumphofRalAlfonsninOctober1983,andmore recently with the victory of the Peronist Carlos Menem in 1989.Seenfromthisperspective,however,thetermsunderwhichArgentinasdemocracyisbeingforgedarenoteasilyunderstood.Asmuchastheimme-diateconjuncturalcrisisofthedebtandmilitaryfailureinreshapingArgen-tinaspoliticaleconomyarelonger-term,deeperresolutionstothefalloutPost-Populist Argentina65ofpopulism.Fromabroaderstandpoint,itisclearthatwhatisnowoccurringisthedefinitivedismantlingofasystemcreatedinthe1940s.Free-marketliberalization,privatization,restorationofem-phasisonexports,curbingtrade-unionpower,andlimitsonpoliticalparticipationandexpressionofpopulargrievancearenotjustmomentaryresponsestointernalandinternationalpressures,butthecrestofahistoricstruggletoshatterpopulistalliancesandtheireco-nomicprogrammes.Invaryingdegreesandpermutations,LatinAmericansarewitnessingthereconstitutionofhistoricblocsrepre-sentedbyneweconomicforcesundernew,andlimitedtermsofpoliticalaperture.InArgentinatheprocessofevisceratingpopulismhasbeenbothunsurpassedandshockinglysuccessfulforpropertiedinterests.ThisarticlesetsPresidentCarlosMenemsdmarcheintothecontextofahalf-centuryconflictovertheshapeoftherepublicspolitical economy.The Populist CompromiseTheSecondWorldWaranditsaftermathusheredinawaveofpopulistvictoriesacrossLatinAmerica,bringingnewsocialalliancestopower.Priortothe1943 coupdtatwhichbroughtPerntothelaboursecretariatandlatertothevicepresidency,theArgentinepoli-ticaleconomywallowedwithinanoldagro-exportsystemandtraditionaleliterulebasedonelectoralfraudandcorruption.TheSecondWorldWar,urbanizationandswellingranksofindustrialworkersthrewintocrisistheoldnostrumsofexport-orientedgrowth,closetieswithBritain,conservativeelectionriggingandtheexclu-sionoflabour.Bytheearly1940s,aneworderwasemerging:industrializationbasedonproductionfortheinternalmarket,andclamouramongmiddleandworkingclassesforrepresentationwithinthe state.OnepillarofthePeronistalliancewaslabourincorporation.Hitherto,unionslackedjuridicalbasesforcollectiverepresentationandbargaining,orpoliticalparticipation.AsPernsoughtalliestobuttressawobblymilitarygovernment,tradeunionistsofferedsupportinreturnforstrategicconcessions.ByOctober1945,Pernestablishedpensionschemes,housingprogrammes,andmostimpor-tantly,anobligatorysystemofcollectivebargainingandfulltrade-unionrights.Thislastconcessionledthemilitaryjuntatogaolitsvicepresident,anactwhichprovokedmassivelabourdemonstrations,culminatinginthetake-overofBuenosAiresandothercitiesbyworkers on 17 October 1945. Fearing social revolution, the military re-leasedPern,andpromisedelectionsinearly 1946.Unionists,havingflexedtheirmuscles,createdtheirownLabourPartyinlateOctober,whichservedasthefulcrumofacoalitionwhichnarrowlywonatthepollsinFebruary1946.Topreservelabourloyalty,Pernofferedmassivewelfareschemesandbargainingrights.Trade-unionmember-shipsoaredfrom520,000 to2.3 millionbetween1946 and1951.11DanielJames,ResistanceandIntegration:PeronismandtheArgentineWorkingClass,19461976, Cambridge 1988, p. 10; and October 17th and October 18th, 1945: MassProtest, Peronism and the Argentine Working Class, Journal of Social History 21 (1988),pp. 44161.66Induecourse,PernusedthemechanismsofindustrialrelationsprovidedundertheOctober1945 decreewhichhadledtohisarrest,to tighten slowly his grip over the unions.2Thesecondpillarofthepopulistcompromisewassupportfornewindustrialgrowthandmanufacturingmagnates.ThePeronistadmin-istrationusedseveraldevicestoaccelerateimport-substitutionindus-trialization(ISI):foreign-exchangecontrols,heavypublic-sectorborrowingtofinanceprocurement,highlevelsofprotectionforthemanufacturingsector,andgreatlyexpandedsupplyofcredit.Accord-ingly,anewindustrialeliteemergedundertheumbrellaofstatesubsidiesandprotection.ManyofthesefirmsestablishedlinkstothestateundertheConfederacinEconmicaArgentina(CEA),renamedConfederacinGeneralEconmica(CGE)in1952.ThemoretraditionalmanufacturersintheUninIndustrialArgentina(UIA)splinteredandwereabsorbedbythegovernment.Someoftheindustrialgiantsmadetheirfortunesoffhighlyprotecteddomesticprivatemarketsprimedbyforcedtransfersofwealthfromthetradi-tionalagro-exportsectorandpublic-sectorcredits.Anothergroupslowlyemerged,especiallyinconstructionandpublicworks,suchasPrezCompanc,Techint,Soldati,andreliedexplicitlyonpublic-sectorcontracts.Thislattersectorprovedmoreadaptabletofutureshiftsinstatepolicyespeciallywiththesubsequentsqueezeontheprivate domestic market.TheheydayofthisallianceofindustrialeliteswithtradeunionstorefashiontheArgentinepoliticaleconomylastedonlyafewyears.Paddedbysupportfromsomeideologicalnacionalistasandsomemembersoftheclericalestablishment,Pernappearedtohavegalvanizedapowerful,indeedinvinciblebloc.Butby1949,thegov-ernmentwasforcedtocurbitsspendingandprofligatecredit.Bythe1950s,theeconomywasinfullcrisis.Theweaknesseswerebothinternalandexternal.Externally,ISI neveraddressedtheunderlyingdependentnatureoftheeconomy:rapidindustrializationrequiredmassiveimportsofrawindustrialmaterialsandcapitalgoods,butrequiredexportrevenuesfromtraditionalstaples.By1952,dueinparttoanti-exportpoliciesanddomesticconsumptionofstaples,traditionalagro-exportsplummeted.Theyawningbalance-of-paymentscrisissymbolizedoneaspectofthelimitednatureofpopulist structural reforms.ThePeronistalliancealsocrumbledfromwithin.Relationsbetweenlabourandcapitalwerenevermorethansuperficialrecognitionsofeachothersformalpropertyrights.Realindustrialwagesrosebymorethan50 percentbetween1946 and1949,increasingthewageshareofnationalincometo49 percentthereaftercircumstancesstabilized, then worsened. Growing public-sector austerity and tightercreditpromptedstrikesinthecountrysmajorindustries.WhilePeronistleadersrespondedbytighteningthecorporatistscrews,employerswentontheoffensive.Facedwithslumpingproductivity,2Jeremy Adelman, Reflections on Argentine Labour and the Rise of Pern, Bulletin ofLatin American Research 11 (1992), pp. 24359.67andforcedtofinanceinvestmentbasedonretainedearningsratherthanpublic-sectorsubsidies,manufacturersturnedontradeunion-ists.DuringtheProductivityConferenceof1955,CGE employersinvokedunilateralrightstocontrolthelabourprocess,whileCGTunionistsdefendedshop-floorconcessionsmadeduringthePeronistheyday.Thedisputeillustratedtheexhaustionofthealliancebetweenafractionofindustrialcapitalproducingforanincreasinglysaturateddomesticmarketbasedonstatesubsidies,andalabourmovementweanedonstrongbargainingrightsandstatedistributionmechan-isms.Ashisalliespolarized,Perngrewincreasinglyrepressive.3Withpopulismcrumblingfromwithinandsqueezedbydireexternalpaymentsproblems,themilitarytoppledPernsgovernmentinmid1955.ThePeronistlegacypreventedcoalitionmembersfromacquiringfullautonomy from the state. Consequently, even after the fall of Pern in1955,hisfeudingbackersdidnotwieldthetoolsforself-defencewithinastructureofrelativelyautonomousinter-classbargaining.4Inotherindustrialsocieties,statessponsoredindustrialrelationssystemstoresolveday-to-daydisputesoverthelabourprocessanddistri-butionofthenetproduct.InArgentina,controloverstateresourcesshapedbargainingstrength,andnotviceversa.OnceISI andthebargaining system were thrown into full crisis in the mid 1950s, con-trolofprivilegesandrightsbetweenthefactionsofthepopulistalliance involved competition for exclusive control of the state. At thesametime,Peronismtappedintoandreinforcedmobilizedconsti-tuenciesofworkersandindustrialists.IncontrasttoBrazil,wherecivilsocietyremainedstillrelativelyunmobilizedintheearly1950s,Argentinecapitalistsandworkerswerehighlyorganized,precocious,andadeptatbrinksmanshipindealingwiththestate.ItwasatragicparadoxthatArgentinepopulismbequeathedapolarizedandmobilized civil society without conferring the means to resolve its own disputes.The Crisis of HegemonyForthenextthreedecades,civilianandmilitaryregimessoughttodismemberthevestigesofapopulistsystemwhichhadmobilizedlabourandfactionsofcapital.WithPerninexile,unionsandindus-trialistsfacedeachotherinincreasinglyopenconflagrations.Butthenakedcontradictionbetweenlabourandcapitaldidnotnecessarilytranslateintotheindependentstrengthofeither.Bothsidesmediatedthepowerstrugglethroughcompetingclaimsoverahobbledstate.Asaresult,bothsideswereabletodenytheexistinggovernmentlegitimaterightstorule,butneitherwasabletocreatearegimeofitsownliking.TheinternalcrisisofthepopulistallianceledtoahegemoniccrisisoftheArgentinestate,culminatinginthetragicdictatorship of 197683.3DavidRock,AuthoritarianArgentina:TheNationalistMovement,itsHistoryanditsImpact, Berkeley 1993, chapter 6.4JuanCarlosPortantiero,Lacrisisdeunrgimen:unamiradaretrospectiva,inJosNunandJuanCarlosPortantiero(eds),EnsayossobrelatransicindemocrticaenlaArgentina, Buenos Aires 1987, pp. 6770.68Thefirstattemptofindustrialiststoimposetheirauthoritywiththehelpofamilitarygovernmentendedindefeat.Thefirstjuntapresi-dent,GeneralEduardoLonardi,soughtadealwithunionstounder-mineloyaltytoPern,buthisinabilitytoquellspreadingstrikesledtohisdownfall.Underastoutlyanti-corporatistfactionledbyGeneralPedroAramburu,themilitarytheninitiatedafull-scaleassaultontrade-unionrightsandtheprivilegesoftheirbureaucraticleaders. In so doing, the military reunited the rank and file with theirleaders,givingnewlifetothePeronistmovementandusheringinaperiodknownasthePeronistResistance.Ledbythe62 Organiz-ations,abandofpragmaticyetcombativeindustrialunions,theseplayedadoubleroleastheprincipalpoliticalvehicleforPeronismandasacollectivebargainingagentwithemployers.Thisdualroleenhancedorganizedlabourspropensitytomediateclaimsthroughastruggle over state levers.Aramburusinitialattempttorevivethefortunesoftraditionalexportersboresomefruit:stapleexportsrecoveredfromtheirdepression,butthebackwardnessofprimarilyPampeanproductionpreventedtheagro-exportsectorfromrecuperatingitsroleasengineofgrowthofthepre-1930 years.5Industrialiststhemselvescollec-tivelyapprovingofharshmeasuresagainstunionswereincreasinglysplittwoways:betweenlargeandmiddle-rankedenterprises;andthosecommittedtodomesticmarketswithnorelationswithtransnationalcompanies(undertheCGE)versusthosewithstrongerlinkstoexternalmarketsandforeigncapital(undertheUIA).6ThemilitarybannedtheCGE,consideredaPeronistorgantoutcourt,andswungitssupportbehindtheUIA.Byrevivingexportsandcourtingforeigninvestment,itrekindledthefortunesoftheoldpre-Peronistconservative alliance.Buttoomuchhadtranspiredtorestorethepre-populistbloc.Aramburuseffortstocobbletogetheranaccordsoonfellapartwhenausteritypoliciesslasheddomesticmarkets.Labourfoughtback.In195657, over eight million working days were lost in strikes. FactoryinsurrectionsandrampantindustrialsabotageforcedAramburutostep down and restore civilian government.InadealcutwithPern,ArturoFrondizi(oftheUninCvicaRadi-cal)handilywontheelectionsofFebruary1958,restoringparlia-mentaryrule.Butparliamentaryrestorationwasrelativeatbest:Frondizisirenicgesturesgavehimauthority,butnotstrength.FrondiziinitiallysoughttorefashionanewgoverningalliancebyrevivingtheISI modelwiththehelpofmultinationalinvestment,thepromotionofnewexportsandmoreopenmarkets,butattheexpenseoftrade-unionrights.FrondizisownplansforrenewedISI quicklyranupagainstthesamelimitationswhichconfrontedPernin1950:5RicardoSidicardo,Estadointervencionista,grandesproprietariosruralesyproduccinagropecuariaenArgentina,194676,NovaAmericana5 (1982),pp.339432.6JorgeSchvarzer,Empresariosdelpasado:LaUninIndustrialArgentina,BuenosAires1991, pp. 11748.69abalance-of-paymentscrisisandlabouropposition.InDecember1958 stabilizationplansforcedasuddendropinwages.Havingsup-portedFrondiziatthepolls,the62 Organizationsdeclaredwaragainst his administration. In 1959 alone, ten million work days werelost in strikes in the federal capital alone. Repression in turn drove theresistanceunderground.ForeshadowingtheNationalSecurityDoc-trine,thegovernmentissuedthePlanConintesinMarch1960 tosuppress clandestine opposition.Frondizi,bereftofpopularsupportyetbelievingthathecoulddefeatalegalPeronistmovementatthepolls,allowedthePeronisttextileleaderAndrsFraminitorunfor(andwin)theelectionstothegov-ernorshipoftheprovinceofBuenosAiresinMarch1962.Thiswasaresoundingvictoryforthe62 Organizations-controlledCGT,andallowedtraditionalPeronistunionists,ledbyAugustoVandor(ofthemetalworkersUOM),torestoreitshegemonyoverthetrade-unionstructure.Theoutcomeoftheelectionwas,however,unpalatabletosomeRadicalpoliticiansandthemilitary.Frondiziwasdeposed,theelectionsannulled,Peronismremainedproscribed,andthewaywaspavedforthehaplessRadicalinterregnumofArturoIlla.Illa,likePern,AramburuandFrondizi,facedanimpossiblecourse:runningthegauntletbetweenanindustrializationstrategybasedonthedomesticmarketandnationalcapitalinincreasingalliancewithforeignenterprises,andtheneedtoensurelegitimaterulethroughpopular support.Prosperity barely masked the struggle at the heart of the state itself. Ifciviliangovernmentsurvivedfrom1962 to1966,itwasbecauseVandorexperimentedwithrevivingthenotionofadefactoPeronistmovementwithoutPern,leadingtoasplitwithinthe62 Organiza-tionsandCGT betweenVandoristasandloyaliststoPernledbyJosAlonso.StrikeactivitybyallfactionswitheredIllasmeagresupport.Still,likeFrondizi,IllabelievedthattheRadicalsmightdefeattheseeminglydividedPeronistmovement.ThefreeelectionsofMarch1966 onceagainbroughtvictorytonewlylegalizedPeronists,fore-shadowingtheprospectofPernsreturntosweepthepresidentialelections of 1967by now a thoroughly heinous prospect for the mili-tary and many industrialists.ThecoupwhichtoppledIllain1966 wasastrangemutationofunionistsrevivingthemythicallianceofthearmyandthepeople(alludingtothebenefitswonunderthedictatorshipof194345),right-wingpoliticians,andbigbusinessofnationalandtransnationalvintage.Convincedthatthejuntapresident,GeneralJuanCarlosOnganawouldupholdratherthandemocratizetrade-unionhierarchies,bothVandorandAlonsosupportedthecoup.Intheearlydays of military rule, the government and unions engaged in complexnegotiationandjostling.ButfollowingthefirstgeneralstrikeinDecember1966,Onganafavouredopen-marketandstarklypro-employerpolicies,anddirectappealstoforeigninvestment.Open-marketpoliciescreatedtwodivergenttrendswithinthelabourmovement:pragmatistsandaswellingrankofunionistscallingnotfortheresurrectionofoldpopulistcompromises,butamoremilitant70brandofsyndicalism,sooncalledclasismo.7Onganaspro-employer andopen-marketpoliciesfuelledrisinggrievancesamongtherank and fileswelling the potential power of clasismo.Bydividingtrade-unionleadersandweakeningnationalunions, Ongana aimed to strengthen the militarys power vis--vis the labour leadership.Inadvertently,thisloosenedcontroloverrankandfile, therebyremovingoneofthefewdisciplinarydevicesatthegovern-mentsdisposal:unionenforcementofdisciplinethroughavenuesof collective bargaining mediated by traditional leaders. It also dispersedpoliticalresistance:thetheatreofstruggleshifteddramaticallytothenewerindustrialcities.Amongtheautomobile(SMATA)workersfrom thegiantRenaultplant,andpowerworkers(LuzyFuerza)ofCrdo-ba,ledbythecharismaticself-taughtMarxistAugustnTosco,unrest explodedinstreetriotsinMay 1969.Thiswasfollowedbyoutbreaks inRosario,promptedbyrailwayworkersresistingrestructuringof railyards.8ThecordobazoandrosariazoforcedOnganatosackhis financeministerAdalbertoKriegerVasena,andabandonplansto refashionArgentinecapitalismfromabove.Symbolizingtheimpo-tenceoftheregime,whileOnganadeliveredanimpassionedspeech totroopsonNationalArmyDay1970,theMontoneroskidnapped General Aramburu, and later executed him.The Return of PernAs the military struggled to extricate itself from the self-imposed task tosavethecountryfromcivilianhaplessness,workersandstudents grewincreasinglyrestive.Sensingtheimminenceofafullsocial revolution,guerrillaforcesproliferatedinthecitiesandcountryside. Meanwhile,theMontonerosshotVandor,throwingtheCGT into crisis.Thenewleaderofthe62 Organizations,JosRucci(alsofrom theUOM)quicklysoughtanalliancewiththeemployersgroupCGEledbyJosGelbard,inanefforttofosterNationalReconciliation. The blueprint for a revival of the old populist alliance to restore stable government,militaryorcivilian,foundsupportwiththenew administration of General Alejandro Lanusse.From 1971 to 1973, Lanusse engineered a delicate process of rebuilding theoldpopulistalliance,culminatingintheelectionofHector Cmpora,theinterimleaderofthePeronistParty.Shortlythereafter, PernreturnedfromexileinSpain,sweepingtheelectionsof September1973.Indesperation,aflurryofpoliticalmanoeuvring channelledintoPeronistrestorationonthemostfragileoffounda-tions.Pernsreturnrevivedtheillusionthatmutuallycontradictory elementsofpopulismcouldbereconciledwithinthestateparty nexus.Butthepowerblocwhichbroughtthepackagetogovernment7Thisfragmentationhaditscorollaryinthelabourmarket.SeeAdrianaMarshall, LabourMarketsandWageGrowth:TheCaseofArgentina,CambridgeJournalof Economics4 (1980),pp.3760.Clasismo eventuallyattractedelementsoftheCGT in Crdoba.8JamesP.Brennan,TheLaborWarsinCrdoba,195576: Ideology,Work,andLaborPoliticsinanArgentineIndustrialCity,HarvardUniversityPress,forthcoming;Ernesto Laclau, ArgentinaImperialist Strategy and the May Crisis, NLR 62.71in 1946 was a mere shadow of its former self by 1973. Due to land at Ezeiza airport on return from exile, Pern learned by radio that shoot-ingbetweenright-wingthugsandthePeronistYouth,bothofwhom had gone to the airport to greet their leader, had converted the airport into an intra-Peronist battleground. His plane landed elsewhere.Pernreturnedtoavortex.Inpreparation,Cmporahadnegotiated aSocialPactamongbusinesses(theCGE),unions(theCGT ledby Rucci who would soon be gunned down by guerrillas) and the govern-ment.Butrockedbythefirstinternationaloilcrisisanddomestic inflation,theSocialPactsoonunravelled.Workersbeganoccupying factories:inthefirsttwentydaysafterCmporasvictory,176 factor-ieswereseized.9PernnonethelesskeptGelbardaseconomyminis-terwhobynowwasforcedtoimplementausteritymeasurestocurb inflation.Thisonlyfuelledrank-and-filedefectionfromtheCGTleadership,andfactoryandoil-fieldtakeovers.Asfactorycouncils flourished,right-wingdeathsquadspatrolledthestreetstakingaimagainststudentsandradicalworkers.Meanwhile,Pernsownhealth worsened, and on 1 July 1974, he died, taking with him the illusion of afeasiblepopulistalliance.10Thereafter,Argentinaplungedintonear civil war.The politics of the hegemonic vacuum of the years 1955 to 1976 polar-izedtheone-timepartnersinpopulism.Severalimplicationsflowed fromthisprocess.First,withtime,itbecameincreasinglyimpossible torearticulateanewpowerbloc.Ateachconjuncture,businessand labourleadersdisplayedgreaterantagonism.Anyattempttospurthe domestic market led to balance-of-payments bottlenecks and inflation. As a result, the struggle over the distribution of the net national pro-ductbecameazero-sumproposition.Wageincreasesimpliedafallin profits,whileproductivityincreasesimpliedunemploymentand workererosionofcontroloverthelabourprocess.Attemptstore-establishcontroloverunionssplinteredtheleadership,creating independentnucleiofworkerswhorefusedtoswallowtheausterity they were being asked to ingest. As the rank and file defected from the alliance,eachgovernmentstenuouslegitimacyvanished,forcingthe government to align with one side of the alliance against the other.Second,populismmayhavebeenthearchitecturewithwhichArgen-tineworkersenteredthepoliticalarena,butthetermsonwhichthis systemwasdesignedandsubsequentlycontestedwerenevermore thancontingent.11Importantly,thecontingenciesandcontradictions of populism were mediated within the sinews of the state: each faction of the alliance struggled to enhance its position, not through resources consolidatedwithincivilsociety,butinthesphereofthestate.As contradictionsintensified,thedisputesaccumulatedandpercolated upwards from the bottom to the top of the state structure. If there was9Ronaldo Munck, Argentina: From Anarchism to Peronism, London 1987, p. 188. 10Julio Godio, Pern: Regreso, soledad y muerte (197374), Buenos Aires, 1986.11Bycontrast,foraviewoftheincorporativemomentwhichcreatesbinding institutional constraints, see Ruth Berins Collier and David Collier, Shaping the Political Arena:CriticalJunctures,theLaborMovement,andRegimeDynamicsinLatinAmerica,Princeton 1991.72acrisisofArgentinegovernabilitytoborrowafavouredtermof modernizationistsocialscienceitwasduenottotheoverdoseof demandsissuedfromcivilsocietytothestate,buttothestatesown incompleteabilitytoserveastheexclusivemechanismforclass incorporation and mediation.Third,thepolarizedambienceofpoliticalbargainingraisedtension levelsandmaderecoursetoviolentactionanalmostinevitable responsetotheimpasse.Industrialsabotage,strikebreakingand latterlytheemergenceofruralandurbanguerrillamovementswere symptomslessofaninstitutionalfailure(apreferredcypherof modernizationtheorists)thanofthecollapsingsocialregimewhich undergirdedtheseinstitutions.Inthiscontextpoliticsbothofthe Left and Rightbecame militarized.The institutional legacy of 1940s populism yielded a structure of classcompromise,therebydilutingthesemblanceofaclass-baseddemo-craticregime,withinthestateitself.Thismeantonlyapartial,and ultimatelyflawedreconstructionofahegemonicorderafterthe SecondWorldWar.12Thecombinationofapolarizingpopulist allianceincapableofrearticulation,anditsexplosivetensionwithin thestate,hadtragiclonger-termconsequences.Whilethecountry sankdeeperintocrisis,theverynatureofthehegemonicvacuum impededtheemergenceofanewordersincetheelementsoftheoldretained sufficient command over state levers.The Military DictatorshipInMarch1976,GeneralJorgeRafaelVidelaoverthrewPerns widow,PresidentIsabelPern.Thousandsofworkers,studentsand otherciviliansperishedintherepressionwhichensued.Itisimpor-tanttonotethaturbanandruralguerrillashadbeenallbutdefeated bytherepressionandterrorduringIsabelitasfinalyear.Dissident studentsandMarxistswere,however,convenientbogeysinthe fustiandiscourseofthedictators.Usingthethreatofsubversionto justifyrepression,theprincipalaimofmilitaryrulewastoreorder society, cleansing it of the vestiges of populism. Named the Process of NationalReorganization,thedictatorshipsoughttosmashpopulism and restore an old model of open-market development, this time with thebackingofbigindustrialcapitalwithlinkstointernational finance,andsupportedbysectorsofthemiddleclassesworriedabout order and security.Themilitaryapproachtolabourrelationsposedatleastoneintrac-tablesetofproblems.LikeAramburu,FrondiziandOngana,Videla revivedtheanti-Peronistfallacythatbreakingtrade-unionleadership woulddrivetherankandfileintodocility.Instead,repressionforced oppositionunderground,andmadeanyeffort todivideandrulethe union structure impossible. Austerity took its toll. Between 1976 and12Onthisissue,seeCharlesMeier,TheTwoPostwarErasandtheConditionsfor Stability in Twentieth-Century Western Europe, in Meier, In Search of Stability: Explor-ations in Historical Political Economy, Cambridge 1987, pp. 15384.731980,realwagesfellbyhalf,whilestructuralunemploymentreached 23 percent.Furthermore,atendencyvisiblefromthe1960sacceler-ated:increasingnumbersofArgentineworkersceasedtobesalaried, becomingself-employedandcasual.13Whereassomeunionsectors mighthavebeenwillingtobargainwiththemilitarytheso-called dialoguistasthey wereforciblysilenced.Bytheendof1977,disap-pearances(theofficialreportofCONADEP,NuncaMas, estimatedthat halftherecordeddisappearancesduringthedictatorshipwere workers30 per cent blue-collar, 18 per cent white-collar, and 5 per centself-employed),arrestsanddismissalsevisceratedopenlabour bargainingandresistance.ThemilitarytookovertheCGT and arrestedprominentleaders.14Thisforcedtheremnantsofstronger industrialunionsintoatentativeandclandestineunitywithother relativelyweakerlabourleaders.15Thecombinedeffectofrepression anddismissalsdeniedthemilitaryabargainingpartnerintheeffort to reconstruct Argentine capitalism from above.Thesecondweaknessofthemilitaryspoliciescentredontheecono-mic front. From April 1976 to March 1981, policy was in the hands of Jos Alfredo Martnez de Hoz, head of one of the countrys oldest andlargestlandowningfamilies,presidentoftheGrainBoard,president ofthecountryslargeststeelcompanyAcindar,andclosefriendof DavidRockefellerinawordthestaminavitaeofanemergingelite whosedealingscrossedsectorsandboundaries.Whereastheolder elite had its feet firmly planted in the large landed estates, the arriviste elite, composed partly out of older traditional families, had its roots in finance and commerce, and was more intimately tied to multinational businessconcerns.MartnezdeHozoversawanambitiouseffortto restructurethefoundationsofArgentinecapitalism.Duringthe initialphaseoforthodoxstabilization,heslashedpublicsector spending,clampeddownonliberalcreditpolicies,andopenedthe Argentinemarkettoimports.InDecember1978,MartnezdeHoz initiatedhismostcontroversialmeasuretostabilizeprices:aschedule ofprefixeddevaluationsofthepeso,calledthetablita,whichwas supposedtoaligndomesticandinternationalprices.16Infact,it systematicallyovervaluedthecurrency,bringingthepricespiraltoa temporaryend,butatthecostofafloodofconsumerimports. Foreignexchange-ratemanipulationswerecoupledwithwholesale financialliberalizationandtheproliferationoffinancialgroupsto13MinisteriodeTrabajoySeguridadSocial,LaTerciarizacindelempleoenlaArgentina,vol.2,BuenosAires1986,p.13;JosNun,CambiosenlaestructurasocialenlaArgentina,inNunandPortantiero(eds),Ensayossobrelatransicindemocrtica; and Crisis econmica y despidos en masa, Buenos Aires 1989.14PabloPozzi,Oposicinobreraaladictadura,BuenosAires1988;andArgentina, 19671982: Labour Leadership and the Military Government, Journal of Latin American Studies 20 (1988), pp. 11138.15Militarymyopiapreventedaconvergenceofunionbureaucracieswiththe governmentdespitetheurgingsofthelabourminister,GeneralHoracioLiendo, AdmiralEmilioMassera(whocultivatedhisownambitionstobealatter-dayPern), andlaterjuntapresident,GeneralRobertoViola.AlvaroAbs,Lasorganizaciones sindicales y el poder militar (19761983), Buenos Aires 1984, pp. 3440.16WilliamC.Smith,AuthoritarianismandtheCrisisoftheArgentinePoliticalEconomy, Stanford1989,pp.23642;JorgeSchvarzer,LapolticaeconmicadeMartnezdeHoz,Buenos Aires 1986, esp. chapter 2.74channelthedelugeofforeigncapitalanddealonexchangemarkets. Theeffects,whileeventuallyhaulingdownthenearhyperinflationof thelastyearofIsabelsgovernment,predictablydevastateddomestic industry.By1981 totalindustrialproductionwas25 percentlower thanin1973,whiletheindustriallabourforceshrankby30 per cent.17MilitarypoliciesalsorecomposedArgentineindustry.First,industrial output(especiallyinthecaseoftransnationalcapital)shiftedaway fromspecializedfirmsmanyofwhichhadbeguncollapsinginthe 1960s.Inbothnational(publicandprivate)andforeignindustry, outputgrewinfavourofintegratedfirmsinpartduetotheir greaterresiliencytomacroeconomicshocks,butalsoduetotheirabi-litytoexploitmilitary-sponsoredpublicspendinginconstruction,oil andgas,andspecialitysteelsformilitaryhardware.Thelong-term consequencesforsocialalliancesweredecisive:bigdomestic,inte-gratedindustrialfirmsrealignedwithtransnationals,revivingthe fortunesofthemoribundUIA (whichhadbeensqueezedbetween foreigncapitalandtheCGE).18Thisshatteredoldindustrialalliances based on protectionism and local consumption.Twocasesareworthciting,andexemplifythesuccessfulmutationof nationalindustry.Thefirstinvolvestheengineeringfirmestablished in1947 byAgostinoRocca,Techint.Withthehelpofgoodpolitical linksTechintgrewonthebacksofPeroniststatecontracts.But Techintsfortunessoaredunderthemilitary:public-sectorcontracts during the dictatorship increased the value of the firm by 154 per cent, whileitsoonbecameaholdingcompanyforsome77 separate enterprises.MuchthesamehistoryappliestoArgentinaslargest firm:PrezCompanc.Thefirmsgenesisgoesfurtherback,butlike Techint,itsprosperitywasduetopublic-sectorcontractsunder Pern.Thedictatorshipmagnifiedtheprocess.Between1976 and 1987,PrezCompancwentfrom1oseparatefirmstoaholding companyof84,anditsvalueroseby740 percent.19Inaword,the dictatorshipconcentratedindustrialassetsanddisconnectedthem fromthefortunesofthelocalmarket.Bytheendofthedictatorship, theownershipofindustrialassetsinArgentinamadeanyprospectof populist rearticulation laughable.The last component of military policy which altered the configuration oftheArgentinepoliticaleconomywasforeignindebtedness.The origins and complexity of debt-making cannot be rehearsed here. Two points deserve emphasis: first, much of the bank lending to Argentina17Mostaffectedweretextiles,metalandmachineryindustries.INDEC,Industria manufacturera: anlisis de los establecimientos y del personal ocupado, 19741981, Buenos Aires1982, p. 30. GDP growth rates per capita during the decade 197080 slowed to 0.9 per cent,whileindustrialoutputpercapitaregisteredaslightlyhigherrecordof1.6 per centperannum.SeeUNECLA,StatisticalYearbookforLatinAmericaandtheCaribbean,1991, Santiago 1991, pp. 69 & 89.18Schvarzer, Empresarios del pasado, pp. 20944.19PierreOsteguy,Loscapitanesdelaindustria, BuenosAires199o;GabrielGrinberg andMarceloZlotowiazda,Capitanesdeindstria, Pgina 12,29 August1987;Maria Seoane and Oscar Martnez, Argentina S.A., Noticias, 3 January 1993, pp. 7687.75wasusedtorectifytheyawningmerchandisetradedeficit.Theover-valuedcurrencyandArgentinemiddle-classconsumerindulgence floodedtheportswithdurablegoods.Worriesaboutitsunfeasible long-termimplicationsalsofuelledanincalculableamountofcapital flight.Lastly,thenewindustrialmagnatesseizedtheopportunity toexpandbyborrowingabroad.By1982,Techintaloneowed$352milliontoforeignbanks.Theninelargestfirmsaccumulatedforeign debtsreaching$2,683 million.Ina coupdemain, theCentralBank director,DomingoCavallo,nationalizedallprivate-sectorforeign debtsin1982,ontheeveoftheexplosionoftheinternationaldebt crisis in August. The full details of this bail-out of Argentinas largest capitalistsremainobscure,butitsconsequenceswouldbelong-lasting.Freedfromforeignobligations,Argentinasholdingcom-panieswerepoised(butdidnotyetstrikeout)toleadanewhistoric bloc to restructure Argentine capitalism. On the other hand, the mili-tary,whenitwithdrewin1983,bequeathed$45 billioninforeign obligations to civilians.Thedictatorshipunravelledrapidly.Mountinglabouropposition resurrectedtheCGT inNovember1980 ledbythegroupof25and relicsofLorenzoMiguels62 Organizations.TheCGTsnewleader wastheemotionalPeronistfromtheranksofthebrewersunion, SalUbaldini.CGT audacityculminatedinamassivegeneralstrike on30 March1982.Threedayslater,inabelatedefforttodrape themselvesinanationalcause,themilitaryorderedtheoccupationof theFalkland/MalvinasIslands.Britishvictory,andtherevelation ofscandalousconductofthewar,tarnishedtheillusionofmili-taryrectitude.HavingfailedtocompletetheProcessofNationalReorganization,theinterimjuntasetelectiondatesandhandeda crippledstatetoRalAlfonsnsUninCvicaRadical(UCR)inlate 1983.Militarypoliciesbrokeuptheremnantsoftheoldpopulistalliance.National industry withered, giving way to a new coterie of large inte-gratedfirmsassociatedwithtransnationalfinancialcapital.Thestate, ratherthanbeingthepumpforthedomesticmarket,becamethe hobbledandindebtedenforcerofdomesticausterity.Andwhilethe industrial working class drifted to the permanent exile of the informal sector,unionssplinteredbetweencorruptandensconcedlabour bureaucrats,andstructurallyweakbutadamantlydefensiveleadersof collective bargaining rights and a waning social wage. While a death-blowtotheoldpopulistcoalition,thisdidnotleadtorecomposition ofanewdominantbloc.HerethedifferenceswithPinochetsChile arestark.TheChileanmilitaryprofoundlyreshapedsocialalliances, sothatwhatelectedPresidentPatricioAylwininheritedwouldhave beenunrecognizablein1973.TheChileandominantblocwaslucid, robust, and capable of drawing clear boundaries to limit future civilian regulation.SuchcoherencewasnotthebrainchildoftheArgentine military,whichbroketheimpasseofthe1970s,butfailedtorescueArgentinecapitalfromitsowndecrepitudeandgalvanizeanew governingalliance.Indeed,thenewdominantallianceowesasmuch toelectedcivilianpresidentsAlfonsnandMenemastothemilitary.76The Failure of ReformAlfonsninheritedadisaster.IntheearlyeightiespercapitaGDP fell by an annual 8 per cent, from $3,209 in 1980 to $2,719 in 1985. The inflation rate meanwhile soared from 100 per cent in 1980 to 344 per centin1983.Debtburdensinturnwerecrushing:totalnetfactor income paid to the rest of the world rose from $1.6 billion in 1980 to $6 billion in 1983. Longer-term evidence also shows a clear pattern of deindustrialization.Theannualgrowthrateforindustryaveraged3.4per cent in 197075, while 197580 saw annual negative growth of -0.2per cent, falling to -3.7 per cent in 198085. During the three decades from 1950 to 1980, the share of manufacturing employment fell from 25 to21 percent,whiletertiaryemploymentrosefrom44 to55 per cent of total jobs.20Thedictatorshipshreddedtheligamentsofnationalcapitalism,and establishedsomebasesforanewregimeofaccumulation.Butithad noteliminatedtheoldactors,norhaditsucceededingalvanizinga hegemonicblocaroundanewleadingsectorofcapital.Inthedecade since1983,civilianshavebeenforcedtoadapttoconstraintsbe-queathed by the military.Argentinas foreign debt ($45 billion, roughly 80 per cent of GDP) was risingquickly.ThecombinationofReaganThatchermonetarism sentinternationalinterestratessoaring,redirectingincreasing amounts of public spending to service the debt. Meanwhile, European protectionism,theUS decisiontosubsidizegrainexportstotheUSSR, andtheglobalrecessionconstrainedArgentinasexportcapacity. Cavallosdecisiontonationalizeprivate-sectordebtmeantthatover 90 percentofdebtservicepaymentsweretheresponsibilityofthe government.Whatismore,Argentinastraditionallyinefficient,re-gressive,andatrophiedtaxsystemwasunpreparedforthissudden burden.Theshortfallwasmadeupbyprintingmoney.Themilitary (inpartduetocapitalflight,dollarizationoftheeconomy,andthe tablita) passedonamonetarybaseofmerely5 percentofGDP (a normaleconomysmoneybasehoversaround40 percent).Thescale ofmonetaryemissionstocoverdebtpaymentsinsuchademonetized economy electrified inflation rates. In 1983, inflation reached 350 per cent,in1984,627 percent.Alfonsnsstruggletocontrolinflation cannot be understood without reference to foreign debt.But it was Alfonsns efforts to reshape a governing alliance to rebuild democraticinstitutionswhichsealedhisfate.Itisimportanttobear inmindassumptionsmadebytheRadicalsintheireffortstocobbletogether a new bloc. It was felt that in the task of rebuilding a demo-craticregime,theciviliangovernmentcouldrelyonpartnerswho wouldbargainingoodfaith:unions,industrialists,andnewmilitary authoritieswouldsubjectthemselvestouniversalprinciplesoflegal-ity,andarbitrationofdifferenceswithoutquestioningthesanctityof civilianrule.Moreover,Radicalsassumedthateachfactionaccepted anotionofstateautonomyfromanysinglesector.Theseprecepts30UN EconomicCommissionforLatinAmericaandtheCaribbean,Anuarioestadstico de America Latina y el Caribe, 1986.77informedtalkofaconcertacin, areheatedagreementbetweenbusiness andlabourinthespiritofthe1973 SocialPact.Thedrawbacksof these assumptions became clear in the management of each partner.To be fair, the Radicals might have achieved a greater measure of suc-cesshadtheybeenabletodelegatemorecommandovercollective decisions to civil society. This brings us back to the problem of labour relationsandinflation.Collectivebargainingindevelopedindustrial societies,whileenjoyingthepatronageandsupervisionofthestate, operates in a relatively autonomous sphere. Not so in Argentina, where collectivebargainingabsorbsthestateasacentralactor.Unions insistedonwageincreasestorecoverlostground,whileemployers grantingsalaryhikesmadeupforlossesbyraisingprices.Sincean increasingshareofnationaloutputwasproducedbyfewerandfewer firms(whowatchedeachotherssettlementsandmovedinlock-step), largeemployerscouldraisewages,andtherebyprices,withimpunity. The Argentine market was also largely immune to import competition after1982,whenthepesocollapsed,drivingupimportprices,and protectionistbarriers(tariffandquota)werere-erected,inpartfor fiscalreasonsbutalsotocatertooldermanufacturersandwintheir support.Thisforcedthestatetointerveneanddecreeceilings(which wentunrespected)onwageincreasestopreventpricehikes.Attempts to control inflation drew the state into direct intervention in collective bargaining.Thisperversesystemofindustrialrelationswasasource ofperpetualdisequilibriumoverwhichtheRadicalsnevergained control.Worse,failedinterventioninvariablyconverteddiscordant bargaining partners into enemies of the government.Alfonsnsfirstmajorpieceoflegislationwonhimthedistrustofthe unionhierarchywhichhadresumeditscontroloverdelegatestruc-tures.Thefirstlabourminister,AntonioMucci,calledforimmediate openelectionswithinunions.Thisthreatenedtounseatplutocratic labourbosses,wholobbiedintheSenate,wheretheRadicalshadnot wonamajority.There,theideaofunionreformdied.Thisepisode tiltedunionleaders,ledbyUbaldiniandthevitalizedCGT, against any notion of concertacin.In the end, inflation and decreed wage ceilings over collective bargain-ingpittedunionsopenlyagainstAlfonsn.ChargedbyUbaldinis witheringemotionalstyle,theCGT aimedthirteengeneralstrikes against the Radical administration. The political effect of this mobiliz-ationrevivedaPeronistmovementstainedbyrecollectionsofthe debacle of the 1970s and the embarrassing conduct of the 1983 elect-oral campaign. For the moment, however, opposition lay in the trade-unionwingofthePeronistmovement.Asinthe1960s,thismeant thatthearenaforcontestationshiftedfromparliamenttothestreets and shop-floors.21ToworsenmattersforAlfonsn,legalizationoftrade-unionaffairs becameaweaponuponwhichtheRadicalsimpaledthemselves.The21PeterRanis,ViewfromBelow:Working-ClassConsciousnessinArgentina,Latin AmericanResearchReview26 (1991),pp.13356;andArgentineWorkers:Peronismand Contemporary Class Consciousness, Pittsburgh 1992.78Mucciproposalhavingfailed,newelectionsforuniondelegateswere heldunderthecorporatistguidelines,restoringtheoldguardto power.22In the end, Law 23,351, approved in early 1988 to restore full collectivebargaining(whichhadbeenhanginginquasi-legality) consolidatedthepowerbaseofold-guardunionists.Ironically,rather thandilutingopenconfrontation,thelegislationactedlikeatonic: strikesincreasedasunionistswieldedfulllegalrightstowalkout.23ThroughouthishandlingofPeronistunions,Alfonsnmadethemis-takeofassumingthatinstitutionallegalnormscouldactasthebasis forsocialconsensus,whentheverylogicofdemocratictransition meantthatthesenormsexistedonlyimperfectly.Theyservedmore oftenaslegalcudgelswithwhichbargainingpartnersstruggledto enhancetheirrelationshipwithandcommandoverstatepowerin order to weaken their adversaries.The second arm of Alfonsns efforts to refashion a coalitionthe failed embrace of democratic unions being the firstwas the resort to distri-butionistpolicies.Ifneo-Keynesianmacroeconomicpolicycemented populisminthe1940sand1950s,increasinglyrunningupagainst balance-of-paymentsbottlenecks,theburdenofthedebtinthe 1980s posedevenstricterlimitations.Initially,AlfonsnseconomyministerBernardoGrinspuntooklittleheed.BetweenDecember1983 and February 1985 Grinspun tried to assert control over the economy with the backing of a Production Front dominated by the so-called Captains of Industry. He sought to revitalize the domestic market, but avoided the urgent need (in part as a concession to the Captains) to revamp the states revenue machinery. The fiscal deficit rose, and with it monetary emis-sionsandinflation,reaching1,000 percentinearly1985.Belatedly, Alfonsn dropped his minister in favour of a brilliant team of economists headed by Juan Vital Sourrouille in April 1985. Their Austral Plan, a clutch of heterodox measures to reduce inflation, worked for almost two years, but in the end only postponed disaster. Without a comprehensive restructuring of the debt burden, without a boost to taxation, and with-out an assault on the inertial inflation caused by perverse collective bar-gaining,Sourrouillesstop-gapscouldnotlast.Thedebtburden, measuredastheratioofservicepaymentstototalforeign-exchange earnings, reached 80 per cent, forcing the government to pay most of its hard-earned reserves to foreign banks. Tax evasion was a constant plague. In the middle of the Alfonsn term, it was estimated that only 0.4 per cent ofArgentinesliablefortaxesonprofitspaidtheirdues,whilethe shareofprofittaxes(ofGDP)sankto0.5 percent(comparedto13.5percentintheUS,and25 percentinDenmark).Theburdenofser-vicing the fiscal and foreign debt fell largely on regressive sales taxes.2422RicardoGaudioandAndrsThompson, Sindicalismoperonista/gobiernoradical:losaos de Alfonsn, Buenos Aires 1990, pp. 12132.23El Bimestre 38 (March 1988), pp. 1416.24For an especially depressing reference to Alfonsns fiscal woes, see the draft of the 1987budget: Camara de Diputados de la Nacin, Direccin Secretara, Tramite Parlamentario no. 150 (1987); Argentina: Economic Recovery and Growth, World Bank Report no. 6467-AR (19 May 1987), pp. 1011; Juan Alemann, El problema tributario y la evasin impositiva en la Repblica Argentina, La Nacin, 4 January 1988. Throughout the 1980s,onlyNicaraguapaidmoreprofitandinterestasashareoftotalexportstoforeigners.From 1982 to 1990, Argentina sent over half its total export earnings to internationalcreditors. See UNECLA, Statistical Yearbook, 1991, p. 160.79Unabletopaytheinterestontheforeigndebt,arrearsaccumulated, adding$24 billiontotheoriginalstockowedtocreditorsby1988.25Nor could the Austral Plan halt the downward spiral of the economy: between 1981 and 1988, the GDP shrank by over 5 per cent, or 15 per centpercapita.26Inthesecircumstances,Alfonsnsroomfor manoeuvre quickly tightened.MattersworsenedwhenAlfonsnfacedopenconfrontationwiththe military.Oneofthehighlypopularpromisesduringtheelection campaign in 1983 was to bring the military to justice for human-rights abuses.Inaspectacularseriesoftrials,federaljudgessentencedjunta leaders.Theproblemrestedwiththeofficercorps,wholobbiedto remain untouched. By late 1986, in an effort to limit litigation against officers, Alfonsin set a cut-off date beyond which no more cases would bebroughtbeforethecourts.Ratherthancurbthenumberofcases,human-rightsgroups,theMothersofthePlazadeMayo,anda numberofstrategicjudgesbroughtforthhundredsofdocumented cases. If the government was taken aback by the response, the military washorrified.Atthesametime,Alfonsnanticipatedarecrudescentalliance between officers and the old-guard dialoguistas of the dictator-ship. Fearing a coup backed by such a coalition, Alfonsn brought one oftheunionists,CarlosAlderete(oftheLightandPowerWorkers) intohiscabinetaslabourminister.ThisimmediatelythrewSour-rouilleseconomicreformsintomayhemwhenAlderetebeganpro-misingimmediatewageincreases.Theofficersmeanwhilewerenot satisfiedbyRadicalstonewalling,andledthefirstofthreeuprisings duringEasterWeekin1987 (which,itbearsmentioning,wassup-portedby dialoguistaleadersJorgeTriacaofthePlasticsWorkersand ArmandoCavalierioftheCommercialWorkers).Todefusethecrisis, Alfonsnsecretlypromised,anddeliveredinthewinterofthatyear, thereleaseofallofficerschargedwithhuman-rightsabuses,butwho had simply followed orders of their superiors.As the Radical administrations fortunes sank, its last six months were adramaticdisplayofArgentinasdemocraticimpasse.InAugust 1988,SourrouilletriedtorescuetheadministrationwithaSpring Plan,arejigoftheAustralPlan,butwhichlefttheaustralover-valued.27Asspeculationonafuturedevaluationintensified,the CentralBankspentallitsreservesdefendingthecurrency,having earneditsdollarsbypayinghighinterestratesonshort-termbonds boughtbydomesticfinanciers.Thispolicywasnothinglessthanan indirectmassivesubsidytolocalfinanciers.Largeagrarianexporters complainedthattheovervaluedaustralwasanunfairtaxontheir income,andlobbiedferociouslyforadevaluation,warningthatthey wouldwithholdtheirexchangeearnings.28Inearly1989,theCentral Bank could no longer thwart the flight into dollars and in the first four25El control monetario y desequilibrio fiscal, El Cronista Comercial, 20 January 1988.26Intotal,ArgentineGDP percapitasankfrom$3,010 to$2,324 (in1980 dollars)between 1980 and 1990, the worst years of decline being 1988 and 1989. 27Hay que pasar la primavera, Pgina 12, 14 August 1988.28MarioLattuada,ElgobiernodeAlfonsnylascorporacionesagrarias:unavisin deconjunto,inJosNunandMarioLattuada,ElgobiernodeAlfonsnylascorporaciones agrarias, Buenos Aires 1991, pp. 14452.80monthsoftheyear,theaustralfellby936 percent.Inturn,such sharpdevaluationdroveupconsumerprices.Argentineslivingon salariesandfixedearningswatchedtheirwagesandsavingseva-porate.Purchasingpowermorethanhalvedinthefirstsixmonthsof 1989. Almost ten million Argentines could not meet their basic needs, andintheregionofgreaterBuenosAires,some44 percent(over threemillion)livedinconditionsofabjectpoverty,while69 percent wereconsideredstructurallypoor.29InMay,inacountrywhich historically was one of the worlds bread baskets, food riots erupted in Rosario,spreadingtoothercities.Alame-duckAlfonsndeclareda stateofsiegeandorderedgendarmesandnavypolicetosuppressthe riots.Thelootinglastedforweeks,leavingdozensdeadandhundreds arrested.Twoeventsdecisivelycrippledthegovernmentandrevivedthe fortunesofthepoliticalRightontheeveofthe1989 electioncam-paign.ThethirdandmostdramaticmilitaryuprisingagainstAlfon-sn,ledbyColonelMohammedSeineldnatthemilitarybaseofVilla MartellioutsideBuenosAires,forcedthegovernmenttoincreasethe militarybudget,replacetheArmychiefofstaffwithanofficerofthe rebelspreference,andwonpromisesthatfurtheraccusationsof human-rightsabusesduringthedictatorshipwouldcease.Thiswas followed in January 1989 with an attack by a left-wing group (of about forty civilians) Movimiento todos por la Patria (MTP) on the military base LaTablada.Thedetailsofthisepisoderemainobscurenotleast becausethemilitarypulverizedthebarracksleavingthirty-nineMTPcharredbodies.Twoleaders,FranciscoProvenzanoandPabloRamos, wereexecutedafterhavingsurrendered,whilethreeotherleaders disappearedafterbeingcaptured.30Thisfuelledrumoursthatthe securityforcesthemselvesorchestratedtheattackinordertojustify therestorationofmilitarypowerstowageacampaignagainstthe Left.InpartrespondingtoVillaMartelliasaconcessiontothe military,andtoimmediateright-wingcallstorestorefullsecurity powers,AlfonsncreatedtheNationalSecurityCouncilinwhichthe chiefsofstaffwouldsit.Worse,Alfonsnrescindedtheprincipleof excludingthemilitaryfrominternalsecurity.Militaryintelligence wonunlimitedpowersofsurveillanceoverdomesticmatters,and anti-terrorist legislation was sent to Congress.Alfonsnseffortstorefashionagoverningcoalitioncrumbled.Never havingthesupportofPeronistunions,andfailingtodriveawedge betweenbureaucraticleadersandtherankandfile,thecombination ofeconomicausterityandinflationdroverank-and-fileworkerstothe opposition.Likewise,effortstostabilizetheeconomyfragmentedthe businessallies,creatingawingofpowerfulforeign-exchangeearners andspeculatorswhothrivedoffacrippledandindebtedgovernment. With little vested interest in stability, these groups colluded implicitly29WilliamC.Smith,Democracy,DistributionalConflictsandMacroeconomic Policymaking in Argentina, 198389, Journal of Interamerican Studies and World Affairs 32 (1990), p. 30.30AmnestyInternational,TheAttackontheThirdInfantryRegimentBarracksatLa Tablada (March 1990), pp. 12.81with trade-union bosses by ratcheting up the pricewage spiral. While Alfonsnhadthoughtvoluntaryreformandinstitutionalchange wouldconferlegitimacyonaprogrammeofguidedreformofArgen-tinecapitalism,hispackageexplodedwithinthecoreofthestate.In thislight,CarlosMenemsassaultonthelastremnantsofpopulism, muchmorethanamereopeningofmarketforcesandliberalization, canbeseenasthecreationofaforcemajeurecementinganewsocial regime of accumulation.Menems Concentration of PowerTheelectionsof14 May1989 broughtthePeronistsbacktopower. Menemsparliamentarystrengthwasfargreaterthananything Alfonsnenjoyed:heboastedmajoritiesinbothhousesofCongress, andinthecontextofhyperinflation(Junesinflationreachedan annualrateof400,000 percent),Menempushedthroughemergency legislationgivinghimsweepingpowers.Thiswasfollowedbya stackingoftheSupremeCourtwithsupinefollowerstomakethe judiciaryastanchionforhisplans.Inafewshortmonths,Menem concentrated power in the hands of the executive, thereby eliminating theverychecksandbalancesofaproperlyfunctioningdemocratic apparatus,ashadplaguedAlfonsnduringthedemocratictransition. Executiveconcentrationandimpunityisalsoanadvantagedeniedto Brazilianleaders,whetherthedeposedFernandoCollordeMeloor thecurrentItamarFranco.They,likeAlfonsn,facedthechecksand balances of functioning presidential regimes.Menemalsodisarticulatedmilitaryopposition.Frommid1987,the ArgentinemultinationalBunge&Born(thepowernexusbehind menemismoinitsearlydays,andtowhichIwillreturnbelow)estab-lishedlinkswithdisgruntledofficerswhohadledtheuprisings. Menemhimselfhadcultivatedanideologicalandpersonalaffinity withtherebels,especiallySeineldn.31MenemwasconspicuousinhisrefusaltocondemntheuprisingatVillaMartelli,andwasaloud voicecallingforrestoredmilitaryauthorityoverdomesticsecurity afterLaTablada.InthenameofnationalreconciliationMenem lavished praise on officers and showered them with media attention atmarchesandpublicceremonies,promisingthemaprivilegedrolein thewaragainstnarcotraffickers.Furthermore,heconcededtobud-getary demands. According to the 1993 projected budget, the military isentitledtospendthreetimesthebudgetforeducation,andmore thanallspendingoneducation,health,culture,andjusticecom-bined.32Lastly,Menemissuedafullamnestyforallofficersand junta membersaccusedandchargedwithhuman-rightsabusesduringthe dictatorship.Notapopularmove,manyArgentinesfeltsucha concessionwasapricetobepaidforendingmilitaryuprisings.In earlyOctober1989,over200 pardonedofficersandjuntamembersagainstwhomsentenceshadbeenleviedonthebasisofmassive irrefutableevidenceoftortureandmurderwalkedoutofprison.As itwas,SeineldnopposedMenemsanti-nationalistpoliciesand31Gabriela Cerruti, El Jefe: Vida y obra de Carlos Sal Menem, Buenos Aires 1993.32Eduardo Blanco, El poder militar, La Maga, 6 January 1993, p. 3.82restorationofrelationswithGreatBritain,andwagedthefinal uprisingagainstaciviliangovernmentinatragi-farcicalshootoutin variousbarracksofBuenosAiresinDecember1990,ontheeveof PresidentBushsvisittoArgentina.33Thishadtheeffect,however,of dividingmilitaryoppositiontocivilianauthority,sincemuchofthe officercorpsremainedloyal.UnlikeAlfonsn,Menemdifferentiated sectors of the military, pandering to some, coopting others, and in the end crushing the most volatile and least controllable groups. By sacri-ficingAlfonsnstenuousvictoryofcivilianautonomyanddue processappliedtomilitaryabusesduringthedictatorship,Menem hasrestoredmanypowerstotheelaboratesecuritynetwork.While praetorianruleiscertainlynotimminent,Argentinasmilitaryand securityestablishmentisretoolingitscapacitytoinvigilatecivilian rule.Asdramatic,andwithnolessprofoundlonger-termimplications, Menemneutralizedunionpowerwhichhadthwartedcapitalist restructuringsinceitsfirsteffortunderAramburuin1955.Inpart,MenemsstrengthreflectedasuddenpowershiftinPeronismitself after the 1989 elections. Since 1955, the interlude of 197375 notwith-standing,themainvehicleforPeronistoppositionresidedintrade-unionleadersandoflate,UbaldinisCGT,whosepowerdevolved fromtheirdualroleasbargainingagentswithemployersand lobbyistswithnon-Peronistregimes.Menemsvictoryredistributed powerwithinthemovementtothoseclosesttoexecutiveauthority, andoutofthehandsofunionleaders.Furthermore,Menemlearned thelessonlostonthedictatorsandAlfonsn:anyvictoryoverthe unionsdemandedfirstadivide-and-rulepolicybetweensectors,and second a wedge between union bosses and rank and file. The fact that MenemwasaPeronistinsider,whounderstoodtheinternalmachina-tionsoftheuniondelegatestructureandthepatternofcollective bargaining,madeallthedifferencehere,andthegovernmentworked on both courses simultaneously.Menemfirstclearlydistinguishedbetweentheolddialoguistas, now calledtheGroupof15,ledbyCavalieri,Triaca,andLuisBarrio-nuevo(ofthefoodworkers).ThelattertookovertheSocialWorks Administration(INOS)whichoverseesthebenefitsinhealth,recrea-tionandworkercompensation.Traditionallyabottomlesswellof slushmoney,unionbossesusedaccesstoINOS fundsforboundless corruptionandgraft.(Subsequently,MenemsackedBarrionuevo afterhispublicdeclarationthatnoArgentinemakesmoneyby working.)Triaca,oneofthefewPeroniststobeincorporatedinto Menemscabinet,wasfirstmadelabourminister,andafter complaints by dissident unions was appointed to direct the giant state steelcompanySOMISA,andtoprepareitsprivatization(Triacatoo wasdumpedafterchargesofcorruptionwerebroughtagainsthim). Cavalieri,headofthecountryslargestunion,preferredtoremaina backroomoperator.Alignedagainstthegovernmentweretwo strands:theUbaldinistas,supportedbythemainpublic-sectorunions who were bearing the brunt of fiscal austerity, and the ortodoxos led by33Nunca Ms, Pgina 12, 4 December 1990.83LorenzoMiguel,seasonedheadofthemetalworkers,andbackedby thelargeindustrialunions.Ubaldinistaspushedforsustainedagita-tionagainstausteritypoliciesastrategywhichhadnotonlykept them in the limelight during the 1970s and 1980s, but which had made theunionmovementtheprincipalfulcrumofopposition.Theorto-doxos were willing to cut sectoral deals with the government in return fordiffusingoppositiontotheentirepolicypackage.ForthefirstfewmonthsMenemandTriacajuggledthesefactionsoftheCGT,waiting forenablinglegislationtoissueemergencydecrees,andforinflation to come down.Indiscussionsoverwageandpricecontrols,thegovernmentskirted theCGT altogether,preferringsector-by-sectordeals.Withinflation reaching200 percentinJuly,public-sectorunionswononly170 per centincreaseswhilemechanicalengineeringworkerswon225 per cent,wideningthedifferencesbetweenandwithincamps.Having fragmentedPeronistunionleadership,Menemannouncedsweeping privatization plans in mid August. Massive dismissals loomed, especi-allyinthetransportationandcommunicationssectors.Theannounce-ment provoked a rip-tide within the CGT, and eventually open haemo-rrhagingduringtheCGT ExtraordinaryCongresswhendelegates brawled on the floor and clubbed each other in the streets outside the SariMartnTheatre.TheCGT splitintwo:theUbaldinistasincom-mandoftheharassedpublic-sectorunionsaswellassmallerand weakerprivate-sectorunions,whileortodoxosanddialoguistascarried the bulk of trade-union power.Unhitchedfromthemorepowerfulunions,thedissidentswere increasinglyharassed.Thissometimestookformsreminiscentofthe dictatorship.DuringabitterstrikeattheCelulosapaperplantin Zrate after 817 workers were sacked, the police gave the management twentyFordFalconcars(thesamevehiclesusedbythesecurityforces tokidnapdisappearedduringthedictatorship)tofollow,monitor and intimidate union delegates. Similar instances were recorded at the cement plant belonging to Loma Negra, and the ceramics plant of San Lorenzo.34Inthemeantimeindustrialrationalization,thegreater casualizationofthelabourforce,andacceleratedintegrationofenter-prisesalteredtheentiremechanismofcollectivebargaining,tradi-tionallyconductedacrosssectorsandinpracticebindingallfirms. Increasinglysinglefirmsnegotiatedwithseveralunionswithina singleplant,orwithdifferentunionlocalsacrossanumberofplants. Especiallytheweakerunionsliketheconstructionworkers(UOCRA), andthoseinvolvedinstatecompanies,failedtokeepwageconces-sionsupwithinflation.Afragmentedandconfusedlabourmovement wasthenconfrontedwithtwolegislativebroadsides:flexibilization whichslashedindemnitypaymentsfordismissals,andabillpromis-ingtomakeillegalanywageincreaseabovethegrowth-rateof productivitywithinanygivenfirm.Unionsfloutingproductivity limits in collective bargaining would be stripped of legal rights. Both proposals,whileincreasingconcernamonglargesectorsoftherank and file, widened the gaps between union leaders.34HctorPalomino,Cambiosenelcomportamientosindicalenempresasargenti-nas, Report to the International Labour Organization (JulyAugust 1991), pp. 223.84ThePeronistlabourmovementlostitscapacitytomusteraunified opposition.JustasthepopulistISI schemeimplodedduringthe dictatorship,nowabroadworking-classfrontcallingforredistribu-tivepoliciesvanished.Forfourdecadesthechampionsofunity,a diminishingclusterofunionsnowtiedtheircollectivestrategyto populist vindications. No longer were common wage demands a suffi-cientbasisforcollectiveresistance.Sensingthecentrifugaldispersal ofunionpower,theunder-secretaryforlabour,EnriqueRodrguez (the minister charged with executing the project), drafted a bill which would shatter the principle of union organization which had catalysed Pernsrelationswiththeunionsin1945:legalrightstoindustrial organizationandbargaining.Whereastheexecutivedecreeof2October 1945 laid the groundwork for a union genotype principled onindustrialorganization,Rodrguezproposestoreinforcethecreation oftradeandenterpriseunionsasbargainingentities.35Withmajori-tiesinbothhousesofCongress,littleobstructsthemenemistadesign for a post-populist approach to working-class politics.36Withasupinejudiciary,ahobbledopposition,andfragmented labour movement, Menem is seeking to conclude his drive for undilu-tedexecutiveauthorityoverstatemachineryandcivilsocietywitha campaigntoreform the1853 Constitution.LatinAmericasoldest magna carta, this specifically prohibits re-election of the President for a second term. Like Fujimori in Peru, Menem insists that full recompo-sitionofArgentinecapitalismrequirescontinuityinpowerboth arguingthatelectioncampaignsderailotherwisesoundausterity policies.Furthermore,jockeyingforpresidentialsuccessionandthe moneyspentoncampaignsallegedlyforceprospectivecandidatesto abandonthereformist(read:austerity)ship.ButbecauseMenem, unlikeFujimori,enjoysthebackingofapowerfulPeronistPartyin CongressandastackedSupremeCourt,hehasbeenabletosethis agenda without resorting to Mexican-style fraud or Peruvian autogolpes (self-promotedcoupsdtatusedtounderminelegalopposition). Having fared well in the October 1993 elections (taking 42 per cent of the votes, over the UCRs 30 per cent), but still short of the two-thirds ofCongressionalseatsrequiredtomodifytheconstitution,Menem threatenedtoholdaplebiscitetobrow-beatundecidedlegislators.35Rubn Furman, Un proyecto que har olas, Pgina 12, 27 March 1991; Edi Zunino, Encasadeherrero . . . ,Noticias,3 January1993,pp.667;OmarMoreno,Lanueva negociacin: la negociacin colectiva en Argentina, Buenos Aires 1991, pp. 151231.36At the time of writing the constellation of labour forces is shifting. The CGT has re-fused,orthodoxunionleadersseeingthatunityenhancestheirbargainingposition oversomeissues,likeparticipationinprivatizedpensionfundsandatakeinshare issuesofnewlyprivatizedstatefirmsbothofwhichbolsterthepowerofupper-echelondelegatesvis--visrankandfile.Dissidentunions,ledbyMarySnchez (teachers),VictorDeGennaro(stateemployees),andAlbertPiccinini(leaderofa branchofradicalmetalworkersinVillaConstitucin)haveformedtheCongressof ArgentineWorkers(CTA),whosemembershipisquitebroad,butwhoseaffiliatesare amongtheweakestinthecountry.LorenzoMiguelhasrefloatedthe62 Organizationswhichmaintainsanarms-lengthandprudentrelationshipwiththegovernment.The bulkoftheunionmovementhasalignedbehindtheCGT andembracedtheself-styled businessunionstyle,ledbyortodoxosanddialoguistas, Jos Pedraza(railwayworkers), OscarLescano(lightandpower),andofcourse,theubiquitousArmandoCavalieri (commercial workers).85Fearinganotherhumiliatingloss,someUCR leadershavealignedwith Menem in the call for constitutional reform: local UCR governors want toensuretheirownrighttoreelection,andsuprisingly,ex-President RalAlfonsn,whobelievesthatfull-fledgeddebateoverthe constitution might pave the way to a shift from a heavy presidential to aquasi-parliamentary(alongFrenchlines)democraticsystem.37This willbeenoughtoassureMenemsvictoryinCongressforconstitu-tionalreform,andthereforepracticallyguaranteeshistenureuntil 1999 (atthetimeofwriting,nodatehadbeensetforthe Congressionalvote).Menemisthuspreparingthefinalpieceofhis rebuilding of concentrated and unchecked executive authority.Asset-Stripping the StateIfMenemsparliamentaryandlabourstrategiesborequickfruit,and to date have thwarted any collective agitation, with the exception of a single half-hearted general strike in December 1992, his relations with anemergingnucleiofcapitalistshasbeenrockier.Inthelastdaysof Alfonsnsrule,whichwassupposedtoendinDecember1989,but stokedbyrisinginflationwhichinturnwasfuelledbyirresponsible outburstsfromMenemhimself,Menemcobbledtogetherhisalliance foreconomicmanagement.Yearsearlier,aroundthesametimethat Bunge&Bornreachedouttodisgruntledmilitaryofficers,Menems advisorsbeganmeetingwithagroupofcapitalistsdominatedbythe Argentine multinational. Upon taking power on 8 July 1989, Menem introduced a cabinet stacked with executives from Bunge & Born, the reallocusofpowerrestinginthehandsofthefirmspresidentJorge BornIII.Thedraconianmeasures,massiveincreasesinpublic-services charges, freezing all public-sector contracts, and the elimination of the remnantsofArgentinascreditsystemforsmallerbusinessesbyhik-ing real interest rates, slashed the countrys spiralling inflation.ButseveralfactorsunderminedBunge&Bornstripotagewithdirect statepower.First,especiallyaftertheprivatizationschemewasun-veiled in August 1989, many larger firms worried that Bunge & Bornwould use its privileged access to public influence to become the main beneficiaryofthesell-off.Sodespitepublicproclamationsofsupport, largefirmsandespeciallyexporterswithdrewtheircollaboration, sabotagingtheCentralBanksabilitytokeepupreservesusedto defendastableexchangerate.Second,Menemhimselfappeared equivocal.Manystillfearedapotentialvolte-face,andreturntohard-corenationalistPeronisminalliancewithsectorsofthemilitaryand unionbureaucracy.ByDecember,monthlyinflationwasbackupto 100 per cent, the austral plummeted, and long queues formed outsideembassies as millions of Argentines anticipated Armageddon.But the Achilles heel was undoubtedly the governments reluctance to managetheproblemofviscidforeign-debtpayments.Duringthe firstfewmonthsofhisterm,MenemseconomicsministerNestor37The UCR is in a shambles after the weak October showing. Dissent within the ranks, andunresolvedleadershipcompetition,obstructsanycoherentopposition.SeeLa Nacin, 8 November 1993.86Rapanelli(aBunge&Bornexecutive)struggledtorenegotiate arrangementswithcreditors.Twointerrelatedproblems,however, underminedhismelioristgestures.First,foreignpaymentscameout ofthepublicpurse.Andsincethepursewasbare,thegovernment resorted to short-term monetary issues. Printing money in the context ofsuchademonetizedeconomyhadanimmediateinflationary impact.Anynotionofrevampingthetaxstructureandlevying property owners buckled under the threat of capital flight and embar-go on foreign-exchange deposits in the Central Bank. Second, bankers exploitedtheapparentweaknessofthegovernmentbyintensifying pressurestoincreasedebt-servicepayments.Withalreadythreadbare spendinginotherareas,andnoroomwithinnormalfiscalchannels, thegovernmenthadtoraisefundsthroughalternativemeans.Inthis context,privatizationofArgentinasmassivestateandpara-statal apparatuspresentedbothashort-termcounter-inflationarymeasure (bygeneratingreservestodefendthestabilityoftheaustral),anda longer-termstrategyfordebtmanagement.DespiteMenemandthe Rights hortative claims that privatization would enforce market-place competitionandreducewaste,theseconcernswerefarfromtheir minds.Thefulldetailsofthisstunningtransferofwealthfromthepublicto thelimitedprivatedomaincannotberehearsedhere.Theoriginal blueprint,announcedinAugust1989 byPublicWorksMinister RobertoDromi(againstwhomchargesofcorruptionhavenowbeen laid),tooksometimetoironout.Astheeconomycareenedtowards its second round of hyperinflation in early 1990, the urgency to sell off stateassetsintensified.Panicking,Menemproclaimedthefirstpriva-tizationinMarch,offeringthestatetelephonecompany(ENTel)to bidders.InitiallycourtingBellAtlanticandSouthernBellofthe UnitedStates,thecombinationoftherushtosellandtightening recessioninEuropeandNorthAmericaforcedthegovernmentto loosenthepursestringsforanybidder.Intheend,ENTelwasdivided intotwoseparateprivatemonopoliescoveringdifferentareas.Inboth newcompanies,oneledbytheSpanishTelefnica,andtheotherby theItalianSTET,therealpowerbehindtheconsortiacamefromthreenationalcapitaliststheerstwhileCaptainsofIndustry:PrezCom-panc,Techint,andSociedadComercialdelPlata.Bornandcoddled duringPernsfirstadministration,theyreapedtherewardsofthe dismantling of the old Peronist state.Themethodoffinancingthesaleillustratesboththeweaknessofthe Argentine states ability to exact a fair value for its assets, and the role ofdebtinreshapingtheprofileofArgentinecapitalism.Forthe purchaseofENTel(soldfor$7,272 million)only$2,272 million wasraisedincash,while$5,000 millioncamefromCitibankinthe formofalmostworthlessbonds.(Theoperationiscalleddebtequity swapping,andisnowacommonwayforinternationalbankersto exchangetheirworthlessbondsmostofwhosevaluehadbeen erasedfromaccountbooksforundervaluedassets.)Intheprocess ofprivatizingstateassets,thegovernmentagreedtotakeonallthe debts of ENTel (valued at $1,600 million) and to guarantee profit rates of 16 per cent for the first two years (in the first year the two companies87togetherrecordedprofitsof$369 million).Thepaltrysumofcash raisedfortheTreasurywasenoughtocoverfivemonthsimportsintoArgentina.Thismethodofprivatizingsetthetoneforafusionoftransnational financialcapitalinvolvingArgentinasbigcreditors,foreignfirms, andtheCaptainsofIndustry.Citibank,Argentinaslargestcreditor, nowownssizeableassetsinbothtelephonecompanies,naturalgas, electricity,meat-packing,paper,ironandsteel,andanetworkof resorts.38Multinationalshavebeenespeciallypresentintheprivati-zationofpetroleumproduction.ThestateoilfirmYPF,producerof 97 percentofArgentineoilin1990,producedonly42 percentin 1992.39Inanotoriouscaseoffinancialmismanagement,theSpanish stateairline,Iberia,tookoverArgentinasAerolneasArgentinasfor only$260 million(thoughaccountantscalculatedthevalueofAAroutesalonetohavebeensuperior).IberiahasbeenusingAAsfleet forspareparts,andAA nowfacesimminentinsolvency.40(Atthe timeofwritingtheMenemgovernmentisnegotiatingatake-backof thealmostdefunctairline.)Noneofthisobscenedatashouldobscure theimportanceofnationalcapitalinthetransferofwealth:40 per centofstateassetswenttoArgentineinvestors,15 percenttoSpani-ards,and12 percenttoUnitedStatescompanies.Ofcourse,onlya small number of Argentines benefited. In addition to the biggest three firmsinvolvedintelephones,threemoreparticipatedintheplunder: Astra,Sideco,andBridas.PrezCompancsgroupalonetook14 per centofallstateassets(paidmainlyinforeigndebt).Thetopsix Argentinefirmsaccountedfor80 percentofallArgentineinvest-ment.41EstimatesfromtheUndersecretariatforPrivatizationsuggest thatnearly50 percentofArgentinasGDP (some$82 billionofthe IMFstotalGDP calculationof$164 million)isunderthecontrolofsix holdingcompanies.TheaggiornamentoofArgentinecapitalismhasleft the commanding heights of the economy in the hands of a few privatenationalholdingcompaniesinassociationwithforeignfirmsand international banks.42IfMenemcanfindsolaceanywhere,itisinthetemporaryalleviation ofpressurebybankers.Theplunderwiped$12 billioninforeign obligationsoffthetotalprincipal,restoringthevalueofArgentinas foreigndebttoabout$50 billionroughlywhereitstoodmidway throughAlfonsnsterm.MoreimportantlyforMenem,thecash receipts, some $6,018 million, give the Central Bank plenty of reserves withwhichtodefendthenewlylaunchedpeso.Onlyinthiscontext canweunderstandtheapparentlymiraculousabilityofMenems38Marcelo Zlotogwiazda, La sarten por el mango, Pgina 12/Cash, 20 December 1992; Menem y la deuda externa, Pgina 12/Cash, 25 August 1991.39Seoane&Martnez,ArgentinaS.A.,p.77;SalRabinovich,Seaproximalapri-vatizacindeYPF,ElEconomista, 16 August1991;Eldecretopetrolerosalipifiado, Pgina 12, 4 September 1991.40Zlotogwiazda, La sarten por el mango, p. 2.41SeoaneandMartnez,ArgentinaS.A.,p.80;Privatizaciones,LaNacin, 3January 1993.42DanielNaszewski,Laindstriaargentinaenlosaos90,ElEconomista,27 July 1990.88chiefeconomicarchitecttobringannualinflationbackdownto20percentwithoutafulloverhaulofthefiscalmachinery.Theeco-nomics minister, Domingo Cavallo, is the self-same economist who, as president of the Central Bank during the dictatorship, bailed out large domesticcapitalistsbystatizingtheirforeigndebt.Cavallohasnow beenthecustodianofaprocessinwhichthesamefirmshavebought state assets with the help of foreign banks, using the financial leverage ofbondswhichthesefirmswereoriginallyresponsibleforaccumulat-ing.Intheshortrunthen,thecashfromprivatizationhasgiventhe CentralBankresourcestomeetthefiscalshortfall,debtservice payments,andawidemarginwithwhichtodefendthepeso.43In March1991,atriumphantCavalloinauguratedthelastpieceofhis stabilizationplan:legislatedfree convertibilityofthecurrencywith thedollaratafixedrateat10,000 australs(nowonepeso).Ineffect, theAmericandollarhasbecomelegaltenderinArgentina,removing allmonetarypolicyfromthehandsofArgentineeconomicmanagers, andcompletingaprocessofdemonetizationwhichbeganinearnest during the dictatorship.The Funeral of PopulismMenemsplansfortheArgentinepoliticaleconomyhavebroughtthe countryfullcirclereopeningtheclassnatureoftheArgentinestate whichPernhadsoughttoelidewithapopulistalliance.Thecondi-tionsofPernsriseandthedurabilityofthepopulistcoalition,how-ever, no longer exist. The dictatorship of 197683 wiped out the terms ofanational-popularalliance,butdidnotassembleanewcoalition. By trying to recompose an alliance partly based on members of the old populist coalition as a basis for legitimate democratic rule and capital-istrevival,Alfonsnsealedhisfate.Thepillarsofimport-substitution industrializationandKeynesianredistributionistpoliciesproved powerfulagentsforcobblingthealliancetogether,butnotforits survival.Fromthemid1950stolate1980s,Argentinecapitalismhovered betweenamodelwhichwouldnotquitedie,andamodelwhich refusedtobeborn.Consequently,statistswerecontinuouslytempted toreformthepopulistmodelfromwithin(Frondizi,Illa,Pern,and Alfonsn),orforceitsextinctionfromwithout(Aramburu,Ongana, andVidela).Noneofthesesucceeded.Instead,theseculardevelop-mentsofdeindustrializationandforeignindebtedness,processes whichacceleratedinthecourseofthelastdictatorship,creatednew partnersforanalliancewhileweakeningothers.Butitwasthrough the trauma of the last years of the Alfonsn government and the first of Menems that the constellation of a new alliance emerged.EchoingtheregimeofaccumulationpriortoPern,thecurrent directionfortheArgentineeconomyrestsonitscapacitytoproduceexports. The two-track policy of economic integration with Brazil and MERCOSUR,combinedwithpressureinWashingtontoensurethat43All this was done without either changing the underlying tax structure or reforming the financial system. El Economista, 9 August 1991.89theNorthAmericanFreeTradeAgreementdoesnotstopatGuate-mala, is the diplomatic recognition of the end of populism. Emaciated middle-classandworking-classincomespromisetoabsorbashrink-ingshareofthenationaloutput.Butthisalsomeansareconfigured alliance between social classes. It is becoming clear that certain sectors oftheworkingandmiddleclasseswillsufferlessthanothers.Inthe context of general casualization of the labour force, those employed in exporting firms and allied with the financial sector, a not insignificant segment of the population based primarily in the city of Buenos Aires, arelikelytofindthisnewmodelmoreappealingthanareturnto hyperinflationarypopulism.Thecollapseofthedomesticmarketalso promisestoredefineallianceswithinthepropertiedsectors.Whereas Pern,loosely,wasabletopitindustrialistsagainstprimaryexpor-ters,thereisnownolongerahomogeneousphalanxofindustrialists. Rather,ajuniorsectorofdomestic-market,smallerspecializedfirms, islikelytobeovershadowedbyaclutchofintegratedgiantswith stronglinkstomultinationalsandforeignbanks.Whatismore, traditionalagrarianinterestswholobbiedforopenmarketsand unobstructedaccesstodollars,havebeenjoinedbytheCaptainsof Industry,cementinganewdominantblocwhichhadeludedstatists since the 1950s.RecenteventsinArgentinahavewontheaccoladeofbankers,both domesticandinternational,aswellasadministrationsofallstripesin Washington.Menemsaccomplishmentsstandasapotentialmodel fortherestofLatinAmericaperhapsmoresothanChileor MexicosinceArgentinaonceemblematizedtheoldshibbolethin LatinAmerica:populismandpopularnationalism.Foritschampions and detractors, populism was a more powerful force than the threat of socialism.WhatseemsmostparadoxicalisthatPeronism,asrefash-ionedbyCarlosMenem,shouldbetheauthorofpopulistdismant-ling. In a recent survey of Latin America in the Economist, this paradox ispresentedasahappy-endingstoryinwhichArgentineshavefinally come to accept what is in their best interests, thanks to far-sighted and wilful leaders.44Suchaview,quiteasidefromitsundisguisedpoliticalmessage, obscures the course of events. What Latin Americans are witnessing is theoutcomeofaseriesofpoliticalcrisesthemselvesproductsofa continentalhegemonicvacuum.Privatizationandliberalizationare last-ditchmeasuresandnotforethoughtvisions.Remember:Argen-tineselectedMenemonatraditionalistpopulistplatform,andthe firstyearofhisadministrationbroughtthecountrytothebrinkof anarchy.Moreimportantly,asthisarticleargues,therearenotable continuitiestoMenemssuccess,notleastofwhichishisdistastefor dueprocess,civilliberties,andopposition,butjustassignificant,his useoftraditionalcorporatistmechanisms(especiallywithregardto labourcooptation)tofragmentanddivideanycounter-alliance.In otherwords,post-populistArgentinaisahybridofinherited institutionsandresponsestopoliticalcontingencies,butwhich nonetheless marks a sea-change in the countrys development.44Economist, 13 November 1993.90Intheprocess,menemismohasreopenedthedebateaboutclassrulein Argentina.Therearticulationofclassalliancesis,however,onlyone part ofthisproblem.Theotherispresentedbydevelopmentsata purelypoliticallevel.Themockerymadeofjudicialpowers(through thepostfactoamnestywhichannulledsentencesalreadyissued against military officers, and by stacking courts with clearly inept and biasedjudges)raisesdoubtsaboutdueprocessandbasiclegal equality.Furthermore,therubber-stampCongresshasdestroyedthe imageofa pluralistpolitywithinstitutionalchannelsforlegislative dissentandcontemplation.Wrappinghimselfinapoliticaldiscoursewhichpresentsdemocraticchecksandbalancesasobstaclesto capitalistreformandpoliticalstability,Menemhasthrustapowerful executiveauthoritytothecentreofthestatenexus.Finally,Menems single-mindeddrivetoreformtheconstitutionandfacilitatehisown re-election has splintered the opposition and tightened the Presidents gripoverexecutivepower.Menemandhisbrother(thevicepresident) have stripped the state bare of impartiality. If Peronism and populism aimedtoobscureclassrulebyabsorbingcontradictoryinterestsof civilsocietywithintheambitofthestate,menemismoexpungesthis legacy.AsArgentinesgropefornewinstitutionalmeanstomediate socialandeconomicdifferences,thecurrentdesignleaveslittledoubt about the allegiances of state power.91