Foreign Correspondent: A Coup for Inflation


Buenos Aires. On March 24 there was a coup d'etat in Argentina. Whether it was merely another step in an apparently irresistible decline or the beginning of a new era of order and prosperity is, still, an open question. To tell the truth, the situation previous to the "golpe" (as we call it here) was sensationally disastrous, in every possible aspect: a rampant inflation of incredible proportions (from March 1975 to March 1976 the official cost of living index grew 566 percent), a growing Marxist guerilla threat (both rural and urban), widespread corruption at all levels of government including the President herself and her closest advisers, a high degree of social unrest, total lack of order even at the police level and, lastly, a political void—the government was too busy trying to retain power to really govern. The last hope went away when Congress—dominated by a Peronist majority—rejected a motion of impeachment, out of a totally misplaced consideration of party "loyalty." After this failure—and others—of the political system, the coup seemed unavoidable, whether you liked it or not.

In the end, the armed forces, massively—without a single defection within their ranks or a single shot—took control of the country in a swift and precisely planned move, arresting the President and dozens of labor leaders, officers, politicians, etc., deposing all national, provincial and municipal authorities and announced their determination to achieve order, both in the social-political and economic realms.

The new Economy Minister—Mr. Martinez de Hoz, lawyer, part-time professor of agrarian law, landowner, president of one of the major private enterprises of the country and—to top it off—member of one of the traditional families of the social elite—said, in his first presentation, that if inflation is not stopped, by the end of this year it will reach a 4,670 percent annual rate. The major cause is the budget deficit: in the first three months of 1976 only 20 percent of public expenditures were paid with funds from taxes, the rest being met with pure printing of money.

This incredible deficit is the consequence of many causes: an irresponsible and grossly inefficient management, corruption, grotesque deficits of public enterprises, enormous increases in government employees (24 percent in the last three years!) and no monetary discipline at all. Of course, this rate of inflation means no savings, no investments, fleeing of capital toward foreign countries or to foreign exchange, no expansion of business, less jobs relative to more population, greater social tensions, in short, a CRISIS.

The new Economy Minister has proposed and started to implement the following policies: drastic reduction of the budget deficit, through a decrease in personnel, readjustment of the tax system and general austerity; progressive disappearance of exchange controls; almost total elimination of price controls; expansion of oil exploration and production with the assistance of foreign investments; an end to state monopoly of grain and meat exports; elimination of abuses and excesses in labor legislation and practices, and a general reduction of the public sector, coupled with a more efficient management of it.

Generally speaking, it is a private property, free-market sort of program, difficult to apply given the wild inflationary expectations, the fact that it is not a popular plan, and that major portions of the army do not seem to be entirely convinced about it. But its strength lies also in the fact that there seems to be no better alternative and by being the exact opposite of the previous policies (super-nationalist and statist).

The most adequate label for the program and the whole military government would be "conservative:" its civilian personnel come—predominantly although not only—from the right, "social conservatism" values and attitudes are highly regarded and acted upon among the military (film censorship now applies not only to pornography but, also, to other—cultural and political—aspects) and a few days ago an army general proudly announced that he had burned a mountain of Marxist literature due to its opposition to our "national being," whatever this may be.

Personally, I believe the total lack of citizen participation in government is regrettable. We are, in fact, at the mercy of a small group of well-wishing people who are more or less pursuing an economic policy I consider adequate, but the composition and direction of this group could very well change at any moment, without any choice for us not pertaining to it, than to obey, without much criticism, if any. This is the problem when you put your destiny in the hands of a "good" dictator (or of a group of "good" dictators): when they cease to be "good," you can do nothing. Also, the effect of yet another coup at the popular level—from the point of view of citizenship education—is terrible, increasing the already prevailing high degree of cynicism and despair. That is why I said, at the beginning of this column, that the coup could be merely another step into decline or, even more definitively, into a classic revolutionary situation, mature enough for an all-out socialist, Marxist alternative.

That is also why I believe that, despite well-founded reservations, there is no other choice than to wish success to the new government, do as much as one can to help, and hope that a few years from now we may begin again the difficult but in the long range better road of a popular government in the framework of stable money, minimum order, expansion of the economy and respect for individual rights. But, there is something we can say for sure, whenever that day may come: after this experience, Isabel Martinez Peron will be the last woman president of this country for many years to come, to the disgrace of feminist movements and sympathetic observers such as your correspondent.