Socialist Argentine History: Part 1 of 2 - Granite Grok

Socialist Argentine History: Part 1 of 2

Socialism is present in many South American countries. Americans need to know the results of socialism. We need to understand how it has become imbedded. It is important to deal with the facts of a political system that has known and profound consequences. Let’s start with Argentina.

It happened in Argentina… It can happen here in America.

In 1916 Argentina was one of the richest countries in the world. Great Britain’s maritime power and the Commonwealth, made her the number one economy in the world. It was between the U.S. and Argentina for which nation was the second largest economy in the world.

Like the U.S., Argentina had abundant agriculture, vast amounts of rich farmland. She has plenty of navigable rivers and an easily accessible port system. Argentina had oil. Its level of industrialization was higher than many nations of Europe. Railroads, automobiles and telephones were commonplace in Argentina.

Enter Fundamental Change

In 1916 Argentina elected a new president with 45% of the popular vote. His name was Hipolito Yrigoyen. He was from a party called the UCR or the Radical Civil Union. He ran under the banner of “Fundamental Change” with an appeal to the middle class. The UCR ran on a program that called for the redistribution of wealth. Among the changes of the Yrigoyen administration were: mandatory pension insurance, support for low income housing construction to stimulate the economy, suffrage and union support including right to strike and minimum wage.

During the early 1920s there came a rise of the anarchist movement. This movement was fueled by the arrival of recent émigrés and deportees from Europe. It spawned a new generation of left-wing activism in Argentina. The new left, mostly anarchists and anarcho-communists, rejected the incremental progressivism of the old Radical and Socialist elements in Argentina in favor of immediate action.

In 1928, Yrigoyen was re-elected as president and began a series of reforms to increase workers’ rights. The state assumed economic control of a vast swath of the country’s operations. It nationalized the oil industry. It also began assessing new payroll taxes to fund its efforts.

With an increasing flow of funds into these entitlement programs, the government’s payouts soon became overly generous. Before long the outlays began to surpass the value of the taxpayers’ contributions. The entitlement programs became underfunded; much like the U.S. Social Security and Medicare programs.

The end of prosperity

Argentine prosperity ended after 1929 with the worldwide Great Depression. In 1930, a military coup forced Hipólito Yrigoyen from power. The military coup was initiated during the period known as the Infamous Decade. It was characterized by election fraud, persecution of the political opposition and pervasive government corruption.

The death knell for the Argentine economy came with the election of Juan Peron from the Labor Party. Peron had a fascist and corporatist upbringing. Perón established censorship. He and his charismatic wife Eva aimed their populist rhetoric at taxing the nation’s rich. They increased the number of unionized workers and government programs.

His government became isolationist and Perón expanded government spending. His policies led to inflation. The targeted group, the rich, quickly expanded to cover most of the propertied middle class. They became the enemy; to be defeated, humiliated and often disappeared.

Under Peron the government bureaucracy exploded. He implemented massive programs of social spending and encouraged growth of labor unions. These programs provided government jobs. They attracted peons from the countryside. The agricultural labor shortages led to declines in beef and wheat production.

High taxes and economic mismanagement continued to take their toll. They continued even after a coup drove Peron from office. His populist rhetoric and contempt for economic reality continued to live on. Argentina’s federal government continued to spend far beyond its means. Through the 1950’s and 1960’s politics were tumultuous. But regardless who was in control the socialist policies remained largely intact.

Conclusion:

It is good to know the stories of socialism. We have plenty of them in our hemisphere. South America has one of the largest concentrations of States in the world that call themselves socialist. There’s Venezuela most recently. Cuba and Argentina are among them, as are Bolivia, Brazil, Chile, Columbia, Ecuador, Guyana, Panama, Paraguay, Peru, French Guiana, Suriname and Uruguay. Tune in tomorrow as Paul Harvey used to say, “For the rest of the story.”

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