Foreign Correspondent: Argentina


From time to time REASON will feature a report on recent events overseas. Our first foreign correspondent is N. Guillermo Molinelli, a resident of Buenos Aires, who covers Argentine ideological and political trends of the past year locally and in Latin America generally.

REASON has a correspondent in Belgium and discussions are underway with potential correspondents in England and India. Subscribers in other countries who may wish to become correspondents should contact the editor. Libertarian ideas know no national boundaries, and REASON is interested in cultural developments anywhere on Earth.


From an ideological viewpoint, the main current of thought here, the one more aggressive and growing, with a deep and wide response among intelligent university students, is Marxism. Also, existentialism (Heidegger, Jaspers, Sartre, Marcel) is influential. Neo-thomism is in retreat. Objectivism, of course, does not exist. Latest fads: structuralism (Levy-Strauss, Chomsky), "the young Marx." Cohen and Natorp have some small influence, especially among some philosophers of law.

On a political level, we are living under a military regime. This is not to say that we are subjected to a tyrannical and corrupt dictatorship or a quasi-operetta system like the one prevailing in Greece. In general, at the same level of democratic regimes of "civilized" countries (with the exception of the USA) individual rights are more or less respected (meaning briefly "habeas corpus" does exist, independence of judicial power is a fact, and interventionist policies within economic conduct are no worse than those prevailing in those countries usually called civilized. We reached this stage because of a great division among the followers of a populist movement (Peronismo, after Dictator Peron) and its archenemies, who could not stand the possibility of a Peronist ever achieving political power again. Of course, Peronism was led—at times—by leftist leaders which caused justified fears of a return to a new dictatorship. In this fashion, democratic rules of the game ("If you win, I shall be the loyal opposition until next elections, etc.") did not work. At the same time,—and an essential element of this analysis—an inflationary economy prevailed despite two unsuccessful attempts to call it to a halt (due to the impatience of people to stand the consequences of a "recession"). This inflation, of course, made the political situation even worse, originating a deep social unrest and discouraging further investment, outflow of capital toward the U.S. and Switzerland, and, therefore, not contributing toward the development of this potentially wonderful country.

In this situation, the Army proposed to achieve "order" and "development." They abolished all political parties (a measure not much regretted by the people, because of their general lack of prestige), initiated a new effort to stop inflation, and planned a move toward economic growth. Plus—no elections for approximately ten years. Culturally, the regime suffers a certain (small) neofascist influence. Economically, it is predominantly conservative (not libertarian) and has almost succeeded up to now in decreasing the rate of inflation. At the same time, and this is a very good promise, Peronist vs. antiperonist frictions are cooling, due, in some degree, to a definite conversion of Peronist union leaders into a "bourgeois" mentality. Latest news: an internal coup d'etat has apparently erased the neofascist influence. On the other hand, it seems to be more interventionist, economically. I believe they shall call elections within the next three to five years.

Now, what is the role of libertarians in this analysis? None. We don't exist. There was a small group of businessmen who created a FEE-like organization. I say "was" because its influence, always very small, is almost dead by now.

The future, if there is any, lies, as seems also in the case of the United States, in youth. As I stated above, Marxism is the prevalent trend in this regard. Our only chance (and very long range) is to develop a small but coherent group of objectivist-oriented social scientists. I am in this course.

Now, I think the charges that U.S. investments are destroying Latin America, are dead wrong. There is nothing new about them, except a new presentation of the old theme of American Imperialism.

Speaking of private investments, the charge currently in vogue is that you repatriate more profits every year than the investments made the same year. They say, continuing the argument, that more money goes out of Latin America into the United States than the other way around. You are exploiting us, instead of helping us; we are providing you with raw materials—cheap—in exchange for expensive industrial products (this is also the core of the prevalent "damage in terms of exchange" argument). To arrive at the said conclusion, certain economists compared the annual rate of repatriated profit and the annual amount of investments. Strictly speaking, the former is more than the latter, but that does not mean anything relevant. What should be compared are the repatriated profits with the total value of U.S. private investments which originate such profits, and the conclusion is less than a 10% return, which is not so much. Also, U.S. investments help to promote exports (in 1965, U.S. investments on manufacturing activities originated $411 million in exports).

On the other hand, let's not be naive. Some private U.S. investments were adventures of a piratical nature, backed by coercion and cheating. The record, regrettably, is not clear in this regard. The American Government—especially in Central America—has not been a restrained power, the Big Stick being remembered you-may-imagine-how.

On the state-to-state-aid level, the Alliance for Progress being its monument, the issue should urgently be clarified both in Latin America and in the United States. The Alliance has been a failure, originating wild expectations, impossible to fulfill, which did not exactly contribute to social peace. On the other hand, some of its programs are not that bad for the United States, since the money lent is usually given with several restrictions in its use, requiring that it be used to buy American goods. This is not to say that it should be encouraged. On the contrary, it should be abolished, gradually. What is needed, fundamentally, is the end of the protectionist system of tariffs and quotas discriminating against Latin American goods. This would be more beneficial—to everybody, you and us—than millions and millions of dollars.