Argentina, and indeed most of Latin America, remains on the edge of a social cataclysm. There is not a day goes by without some major protest against the state of the economy. In June two more protestors were shot in cold blood by the police which has only led to more protests. These have now spread to neighbouring Uruguay. The economic and social crisis in Argentina is a living issue, not just for a continent in economic meltdown but also for the world capitalist system.

In the summer of 2001 we published an article from our South American sympathisers of the International Bureau for the Revolutionary Party on the economic crisis in Argentina. This concluded that the attempts of the De La Rua Government to follow the dictates of the IMF and make the workers pay even more for the crisis of Argentine capitalism would not only

bring the deepening of recession and pauperisation, but will also lead to the outbreak of class conflict ⁽¹⁾.

You did not have to be especially prescient to make this prediction, but the scale of the response when the Argentine Government announced the total bankruptcy of the economy in December was something new. Our comrades then wrote the article we are publishing here on the piqueteros movement in Argentina. It is, in a sense, a living document which responded to the immediate situation as it was then. The framework it uses remains valid but the details obviously need updating. Our starting point however is the significance of the situation in Argentina for the international capitalist system.

A Global Crisis

Argentina is not an insignificant "Third World" economy. Indeed in the first decade of the last century it was heralded as the country which was most likely to "take off" and join the advanced capitalist states. One British ruling class scion even called it "the United States of the southern hemisphere" ⁽²⁾. However this was also the period in which capitalism entered into its period of imperialism, the period of its "decay and parasitism" (Lenin), and in this imperialist epoch the path to forward economic development has been blocked by the leading imperialist powers. Far from being a model for capitalist development Argentina has instead become a model for the Marxist analysis of the global capitalist system today. Every expansion of the Argentine economy has involved greater dependence on the world economy. Even the glorious years of expansion from the 1860s to 1914 when Argentina's GDP expansion was at least 5% a year (one of the highest sustained rates for any country in history) it was founded solely on the export of grain and meat. Even then the export trade was massively dominated and controlled by foreign (mainly British) banks. Above all the export of primary commodities to the industrial heartlands of capitalism meant that Argentina was for ever at the mercy of the capitalist industrial cycle.

...the peso value of Argentine exports varied considerably during the period from 1915 to 1939; up during World War One, down during the 1920s, then up and down and up and down again when the Great Depression struck in the 1930s. This is one way in which Argentina, like other exporting countries of Latin America, came to be economically dependent on the industrialised centre of the world system. Through the reliance on trade, the condition of the economy was largely determined by trends and decisions outside of Argentina ⁽³⁾.

This in itself generated, as elsewhere in the world, a nationalist response from the rising urban middle classes (the bourgeoisie). However the bourgeoisie was itself weak and divided over the way forward for Argentina in the age of imperialism. Some wanted to protect the economy from the exigencies of world trade cycles. Others wanted to open the economy to international inward investment (so they could also export their capital to safe havens in the USA). Basically this dilemma is repeated in the present crisis.

Additionally the rise of workers in the meat packing and transport industries of Buenos Aires also posed another threat to social stability, particularly in the 1930s when the consequences of the Great Depression hit Argentina. The solution, as in Italy and Germany took the form in Argentina of a kind of state capitalist corporatism. Peronism arose out of a military coup but gradually transformed itself into a quasi-fascist movement which tried the impossible task of balancing the conflicting demands of capital and labour (in the interests of capital naturally). Peron was made Secretary for Labour in the 1940s military government. He told his ruling class colleagues that unions which were loyal to the state were needed in the meatpacking industry.

The working masses who are not organised are dangerous because they are not integrated ⁽⁴⁾.

The CGT became a Peronist fiefdom and numbers in unions doubled to 800,000 by 1953. Peron himself was overthrown when it was clear that he had moved from developing the power of the Peronist trades unions (as he had done in the 1940s) towards deals with multinationals like Esso. The struggles that broke out in the early 1950s over Peron's courting of foreign capital undermined the very rationale of Peronism for the ruling class. Peron was overthrown but the state capitalist idea of protection of national industry and the development of modern factories carried on into the Sixties (the Armed Forces owned so much of the economy that 90% of the military budget was spent on civilian enterprises) although now it competed with occasional attempts to carry out IMF and World Bank "stability plans". Argentina oscillated between hyperinflation and stagnation. Her growth rate at 0.5% between 1955 and 1965 was one of the lowest in the world. The rise in foreign debt and the collapse of parts of the banking system all occurred even then.

Economic collapse led to social war. The creation of a new industrial zone around Cordoba (heart of the Argentine car industry) also led to the growth of a militant proletariat. Between 1969 and 1971 this working class was part of the international wave of class struggle which signalled the end of the post - war cycle of capitalist accumulation. As the bosses tried to impose wage freezes and austerity workers took to the streets in riots and demonstrations. The solution then, as in most countries at that time was to once again resort to the printing press to print money. This led to hyperinflation and real wage cuts for the working class. Even bringing the Peronists back to power could not contain the wave of struggle of the early 70s. When Isabel Peron ("La Presidente" after Peron's death) tired to cut living standards yet another series of strikes broke out in June and July 1975. At the time the CWO wrote:

... during the wave of strikes in June and July two positive steps were made.
First the workers realised whose side the unions are on today. [The unions had agreed to wage rises only 25% of the rate of inflation - ed.] Whatever role unions played in the nineteenth century... in every country they are integrated into the apparatus of the state, acting as industrial policemen, by negotiating the end of strikes and dividing the working class by job, industry and country. In Argentine the fact that Peron felt that a unionised working class is less dangerous to his regime than a non-unionised one is clear evidence of the usefulness to the State of the unions. The Argentine workers realised this not only in their demonstrations against the CGT but also in their method of struggle.
By going beyond dependence on a professional leadership of union bureaucrats and electing their own strike committees the strike could not be beheaded. Thus each time the Army arrested strike leaders new ones took their place and the impetus of the strike was maintained ⁽⁵⁾.

However our optimism at that time did not take account of another development which was that of the rise of urban guerrillas who carried out a campaign of kidnapping and assassination. Giving themselves names like Tupamaros and Montoneros these groups of middle class students (some Peronists, some Stalinists and some Trotskyists) claimed to be acting in the name of the workers. But they did not have a communist programme but a state capitalist one and the methods they used were elitist and anti-working class. Only the mass of the working class acting in unison can defeat the bourgeois state apparatus and in the process start to build a society on a new foundation. In actual fact the guerrillas were carrying out a struggle within the ruling class and the victims were often the working class themselves. The violence of these terrorists against their own "parents" provoked a new "dirty war" in Argentina which led to the return of the military in 1976. Thousands were arrested and murdered and at least 20,000 "disappeared" in the next six years, sometimes by the Army and sometimes by their "death squads" like the AAA (Argentine Anti-Communist Alliance).

Argentina was a police state between 1976 and 1982 but even this did not stop anti-government protests from workers. (Indeed one such protest led to the invasion of the Malvinas/Falklands by the Galtieri regime in a desperate attempt to quieten social protest at home.] The subsequent debacle brought the military government down and the middle classes now united around their traditional main party, the Radicals. For the first time since 1945 the Peronists lost a general election to Alfonsin's Radicals. Alfonsin became the longest serving President for 25 years but Argentina's economy not only stagnated it shrunk by 0.2% in every year of the 1980s. To buy social peace Alfonsin also used the printing press and borrowed huge amounts of foreign capital. By 1989 Argentina's inflation rate was 5000%. Social unrest once again began to rise. The Peronists now returned under Carlos Menem in order to carry out the attacks on the working class which the Radicals had failed to get away with.

Under the influence of Harvard-trained economists like Cavallo, Menem now pegged the peso to the dollar, abolished exchange controls, privatised huge areas of the state-owned industries and basically removed any protection for Argentina's economy. At first it seemed like a miracle. Inflation virtually vanished almost overnight and as the dollar fell, Argentina's economy could still export. The economy began to recover slightly until 1995 when the dollar began its rise. But some problems did not vanish. Argentina's exports now cost more than other primary producing countries. The huge debts built up under the military meant that Argentina was a high risk borrower and foreign creditors demanded high interest rates. In the year 2000 Argentina paid out $32,000,000,000 in interest repayments alone. The spate of financial collapses in Mexico in 1994, in Asia and Russia in 1997-8 and in Brazil in 1999 should have warned the Argentine ruling class that trouble was on the way. They could have abandoned the dollar-peso link as Brazil had done in 1999 but the IMF gave them brownie points for staying with the anti-inflation policy. Instead they recommended cuts in the budget (had these people ever read anything about the post Wall St Crash Depression?) and the result was that the crisis got worse. When the country went bankrupt the whole Emperor's clothes logic of growth based on debt and speculation collapsed. Those who could got their money out of the banks before the collapse (7% of the country's total deposits vanished in 26 days in July 2001). Those who couldn't, lost out. Now the economy is contracting at the rate of 15% a year and 25% of the population is unemployed (a 40% increase in one year).19,000 people a day drop below the official poverty line.

What is the Government doing? Basically nothing. It is paralysed. It is still negotiating with the IMF as to how to get the banks re-opened. Five Presidents may have come and gone but six Finance Ministers have also done the same. The basic dilemma remains the same for the Argentine bourgeoisie. How to satisfy the demands of the IMF (and thus open up the possibility of fresh loans to pay off the interest on the previous ones) and the demands for the political system to be seen doing something to alleviate the distress of the population.

Meanwhile fresh demonstrations and riots break out daily, the latest involving state workers who have not been paid for months. At the same time those in the "middle class" (a term which can cover the petty bourgeoisie and the long term workers with savings) who have had their accounts frozen take to demonstrating outside banks (when they are not smashing them up) by banging pots and pans (the so-called cacelerazos). Many of these have joined with elements of the piqueteros to form People's Assemblies in different neighbourhoods. In Buenos Aires there are about 80 of these, usually in areas where the two main political parties of the system (the Radicals and the Peronists) are weakest. There is no doubt that the main agenda in these assemblies (unlike in the piqueteros movement which is described accurately in the article which follows) is the middle class or petty bourgeois one. Calls for penalties against foreign banks, for the removal of the IMF and economic nationalism in general dominate most (though not all) these assemblies. However, this crisis has not yet been resolved. As one commentator put it:

History suggests that the combination of a dispossessed middle class and a working class with nothing to lose is a catalyst for revolution ⁽⁶⁾.

The nature of that revolution however depends on the working class themselves. As time goes by experience teaches us that a mass movement dies down. Less people are involved but those that remain are politicised and begin to understand the real nature of the problem. Currently the radicals and the Peronists are trying to use the piqueteros and Popular Assemblies in their own battle to control the political system. On the other hand what little contact we have had with those in the piqueteros movement shows that they have little political experience and very different and confused agendas. The piqueteros remain, as the article which follows this shows, a form of organisation which has arisen spontaneously out of the class structure and the capitalist crisis in Argentina. These are not the dispossessed peasants who cannot be integrated into the workforce but those who for generations have been within the working class but have over the last decade or so swelled the ranks of the unemployed. In some cases they have made links with workers still in work but in a corporate society like Argentina where the Minister of Labour has usually been the boss of the General Confederation of Labour (CGT), the main Peronist trades union, this has been difficult. Argentina's trades unions are even more gangsterist than those elsewhere in the world and any attempt to directly break this down is met with violence. However we now have a proletariat determined to struggle and the evolution of the piqueteros into a clearer class-wide organisation which unites all workers cannot be ruled out. It is unlikely that this will happen in this wave of struggle since a period of reflection on the current experience will be needed to draw the lessons of the present crisis.

However even a correct form of organisation is not enough. As the experiences of the German Revolution and the Russian Revolution show us (in different ways) the workers' councils, the class-wide bodies of those revolutions were only the framework in which the class struggle was carried out inside the working class. Without the domination of a revolutionary programme which has a clear recognition that the capitalist state must be crushed, that is standing army be defeated, that only an international revolution can lead to socialism, these forms remain empty shells. In Germany in 1918-9 the workers councils were dominated by the Social Democratic Party which simply imposed its programme and got the councils to dissolve themselves in favour of a re-formed bourgeois parliament. As the article below makes clear, this is what the Argentine bourgeoisie is attempting to repeat and the piqueteros are still not yet a class-wide movement in the real sense.

In Russia the opposite happened when the only party unequivocally supporting soviet power finally gained the support of 80% of the working class in October 1917. Here though there was a political party which stood on a working class terrain. As we have made clear from the beginning this is what the Argentine situation so clearly lacks. So far, despite the great combativity of workers in strikes and demonstrations, despite the real attempts at coordination which have taken place the struggle has still not produced a really autonomous political expression of the working class real interests. This does not mean that it will not do so. The period of reflection which follows a significant class movement is often the time for revolutionary vanguard workers to come together as a result of that experience. However in the situation of Argentina there is no shortage of traps and cul-de-sacs. Most of these are being put forward by the traditional parties of the left such as the Communist Party and the Trotskyist, Poder Obrero and PTS (Socialist Workers' Party) or the trades union federations like the CTA (Central of Argentine Workers) They, as elsewhere call for the class movement to be liquidated into a "people's movement". They call, for example for a Constituent Assembly to replace the organisations that the workers are themselves forming. This would allow the bourgeoisie to reconstitute their discredited state apparatus on a supposedly more democratic basis. As our South American comrade stated in a letter to the IBRP,

There has never been a moment of cataclysmic convulsion and crisis in which the importance of the Left to articulate mass movements for the benefit of capitalist domination has been more important ⁽⁷⁾.

The Left will offer a false solution based on some compromise with the bosses. It maybe that they will even offer some false, short-term hope, as "Lula" and the Workers Party are currently offering the workers of Brazil. However there can be no solution on a capitalist basis which does not mean even more misery for the Argentine proletariat. This will be the basis for the development of an autonomous political organisation of the working class in Argentina. Only once we have more solid class wide organisations and a political party to guide them will the Argentine workers have produced the fundamental organisational bases of their own liberation. And only when these organisations are linked to an international movement to end the global capitalist system will those basic premises have the capacity to transform the wretched condition of life that is the lot of most of humanity not only in the Southern Hemisphere but also for workers all over the world.

(1) Revolutionary Perspectives 22 p.25.

(2) Viscount Bryce, quoted in Peron and the Enigmas of Argentina, Robert Crassweller [Norton, 1987].

(3) Modern Latin America, Thomas Skidmore and Peter smith, OUP 1989, p.72.

(4) Quoted in Victor Alba, The Latin Americans, p.147.

(5) 'Argentina: The June Days' in Workers Voice 16 (First series) Dec 1975.

(6) 'Do Cry for Us' Larry Elliott 7.6.02 The Guardian G2 p.4. ⁽⁷⁾ From 'Communication from a Sympathiser' in Revolutionary Perspectives 24 p.6 (retranslated).