Foreign Correspondent: Argentina


As I cleverly predicted in the October '71 issue of REASON, general elections shall be held in Argentina this March. Besides making me a wise prognosticator, these elections symbolize the failure on an experience typical of the 60's and early seventies: a military regime, with order, efficiency and economic development as main objectives. An experience successful in Brazil—thanks to the alliance of the Army with a group of intelligent and free-enterpriser "technocrats"—which could not be reproduced here in Argentina, due—in part-to deep political/historical/ideological divisions among Argentine people.

Who will be the next President? The hell if I know. But it certainly will not be the candidate of the "Nueva Fuerza" (trans. "New Force", hereinafter called NF) about which REASON questioned me last Fall. On September 29, I resigned my affiliation to the NF. I shall explain, I hope.

NF was recently founded as a coalition of several groups: 100% of the party of ex-Economy Minister Alsogaray, 50% of the old Conservative Party of the two major electoral districts (city and Province of Buenos Aires) and some refugees from others (ex-followers of late ex-President Aramburu, ex-rightist Christian Democrats, etc.). This may sound impressive but it is not, since Alsogaray never obtained more than 2% (yes, 2%) of the total votes and the conservatives even less in precisely those two electoral districts.

At present, NF is the Party of the Right. Big Business is obviously behind the great cost of its unique publicity campaign—unique both because of its size and its relative originality. It surely is the most vocal "free-enterprise" party, but orthodoxy is not one of its virtues: I am reading a pamphlet on the seven fundamental proposals of the Party, two of which are an unemployment and medical insurance, both to be paid compulsively by employers.

When it was founded, it seemed possible that it could become a wide-open party, with popular vocation and libertarian possibilities. Regrettably, today it is a well-oiled publicity machine, increasingly infiltrated by the so-called "gorilas" (staunch, old-fashioned anti-Peronists) and without any clear ideas on noneconomic matters (and, insofar as they propose something outside the economic area, they are generally "conservative" if not downright "reactionary", from a libertarian point of view). Apparently they are trying to represent the "silent majority", without realizing that here it is not a "majority" and showing a certain "anti-intellectual bias", not encouraging to many.

Its practical possibilities are difficult to discern, given the extremely fluid, flexible political situation we are living. All parties are more or less in crisis, there have been no elections in the past 8 years and many surprises may come out on election night. One of the possible surprises, might be a sizable vote for the NF in the first round of about 500,000/1 million votes (we shall use the "ballotage" system, by which if the winner does not obtain at least 50% of the votes, a new election is held, a fortnight after, but restricted to the two or three major contenders). But a minimum of 4 million votes are necessary to win, approximately; therefore, no serious chances exist for NF, besides that of being a major opposition party and/or helping decisively another candidate in the second round.

The basic fact of these elections is that ex-Dictator Peron still commands influence over approximately 3/4 million voters, with about 50% of them ready to go and jump into the Ocean if he says so. Because of his exile, he is not permitted, until today, to be a candidate; then, the most important single question is, who will Peron back? There is no doubt that if Peron's decision is clear and not entirely ridiculous, the result is obvious.


With that in mind, the following scenarios might be drawn:

(1) The Peronists, in alliance with ex-President Frondizi and other small neorightist groups, and behind a non-Peronist candidate, will easily win. Second comes, in this case, either the traditional Radical Party (nationist, interventionist, statist) or the NF or a coalition of the Left.

In this case, we can presume that the future Government shall be rhetorically leftist but mildly so in practice, perhaps even less statist than the present military one and selectively friendly to foreign investments.

(2) Disconcerting and/or contradictory orders from Peron, produce a dispersion of the Peronist votes. (a) In this case, the surprise could be that in a second round an independent candidate could win, ex-Minister of Social Welfare Francisco Manrique, who shall collect votes from many Peronists, a great portion of the independent middle-class, pensioners, a confederation of small provincial parties trying to regain national influence, and myself. The NF might have no other choice than support him in the second round. (b) A different surprise would be an alliance between the Radical Party and the Left, which might get a few more votes than Manrique.

(3) Still another possibility is an apparently impossible alliance between the two major traditional parties, Radical and Peronist, promoted by the Armed Forces and with the banners of nationalism, interventionism, statism and social peace. If the alliance is made, it will undoubtedly win, with the New Force coming second strongly and third the Left. But I am sure that once in power, this arrangement would break down soon.

(4) Finally, a dreadful but possible development, might be the support by Peron of a leftist coalition. They could win easily, with the Radical Party or the NF second strongly.

Scenarios 1 and 3 are a guarantee of a mediocre-to-bad government; Scenarios 2b and 4 of a regime at which I probably would have to pack and leave (to the States, just wait for me) and Scenario 2a a possible HIT.


I call to your attention Manrique's candidacy, because it was one of the main causes of my resignation from NF. He has a strong anti-Peronist and anti-Communist background (the former considerably and positively erased), and a clearly democratic ideology. His social origins are middle-class and his economics have been, generally, pro-free market and private-property, although not totally coherent. He capitalized politically his passage as Social Welfare Minister during the present military government, to become the only popular, independent leader, besides, of course, Peron. He is certainly not an ideal candidate, but I have the suspicion that such a specimen does not really exist. I believe he is the best possible choice in a dangerous situation.


To turn to another subject, more directly related to you; during the last few weeks it has been developing what we may call a case example of many misunderstandings among USA and other countries, possibly explained by the "liberal corporate system" hypothesis used by revisionist authors of libertarian persuasion (such as Stromberg's piece in May '72 issue of THE INDIVIDUALIST).

At a factual level, the problem seems to be the following: as perhaps you don't know (as I didn't until now), the air traffic between USA and some or all of its neighbor countries is restricted to USA and the corresponding neighbor's country's airlines. That is, an Argentine airline whose planes fly from Buenos Aires to NY or California, stopping en route at Mexico City, is not allowed to sell tickets for the last portion of the flight: Mexico—USA. Americans—and, possibly, Mexican—airlines, have a legal monopoly in the area. This protection is apparently common and, as always, invites reciprocity. In effect, in a half-imitation vein, the Argentine Govt. decided to allocate quotas to foreign airlines in the traffic between Argentina and its neighbor countries. By this system, Braniff, for example, could only transport around 4,000 passengers from Santiago, Chile, to Buenos Aires in the whole year of 1972. Notice that the Argentinian policy was much less protectionist than the USA policy, since the latter implied total prohibition, while the former a simple limitation.

But by July of this year, Braniff had already transported more than the permitted quota. The local air authority did not sanction the transgressor, it merely advised the company that its quota was filled and no more tickets could be sold for the Chile-Buenos Aires stretch. This action apparently caused Braniff to present a protest or something at the C.A.B., which applied a sanction to the only Argentine airline that reaches USA, reducing its frequency by about 30%. Bear in mind the interesting fact that this company (Aerolineas Argentinas) was not, formally, a party to the problem between the local air authority and Braniff. At present, this authority has retaliated, reducing in the same proportion the frequency of Braniff and Pan American flights to Buenos Aires. Nobody knows how the reciprocal escalation shall end.

It is plain here that we have a protectionist policy of one government answered partially and mildly by the other. Of course, our local nationalists are happily using the whole episode, and I am afraid that this time they are closer to the truth. The policy of the C.A.B. seems to be: whatever USA can do, others cannot.

This small incident should not be disregarded as merely a conflict between two statisms. It touches larger issues.

In the first place, it should serve to caution whenever you read or hear about aggression against a foreign company. The reality might be altogether different.

Secondly, it sharply illustrates the way private and public interests are dangerously intertwined.

Thirdly, it is a brilliant example of how and why protectionist policies are not conducive to world peace but to artificial conflicts.

Altogether it is a real pity and it does not help a bit. Further still, it raises a discomforting question: have we libertarians become too naive?