Foreign Correspondent: Relative Progress

Buenos Aires. If you recall my last column, on March 1976 our first woman president was deposed by a military coup, amidst an unprecedented scenario: urban and rural marxist guerillas in full action, an incredible inflation rate, widespread corruption at all levels of government, despair, fear. Today, we are not enjoying an ideal situation by far, we have not even gone back yet in some aspects to previous "normalcy," but we seem to be on our way to it. Things have improved dramatically, even though some people here do not realize it—due to a selective lack of memory—and despite a well-orchestrated international press campaign promoted by European friends of local terrorists and helped by well-wishing but naive commentators in the media.

During 1975 and the first half of 1976 everyone—including kids in high school—was speculating, day by day, in the foreign exchange black market or with indexed public bonds, in order to protect themselves against a daily two percent loss in the purchasing power of money. It has been an educational experience out of which, hopefully, we have been vaccinated against future temptations of easy fiat money.

The fact is that the inflation rate for 1977 will be approximately 150 percent, which is terribly high indeed, but is much better than the 1976 rate (350 percent) and the May '75-May '76 rate (830 percent). Despite some regressions, the tendency seems to be towards a lower rate for 1978, in order to reach "normal"—for Argentina—levels of about 30 percent by 1979. The main cause of this inflation was the budget deficit, which during the first quarter of 1976 was 13.5 percent of the gross national product and tending to increase, whereas for 1977 the budget deficit is being held within three percent of the GNP.

This relative but real success is due, predominantly, to the neo-free market policies of Economy Minister Martinez de Hoz—still in office since April 1976, an achievement in itself—who with a gradualist approach (too slow for impatient Latins) has been able to secure it and at the same time maintain a high level of employment with a substantially anti-statist, anti-interventionist approach: lower tariffs, a friendly attitude towards foreign investments and local private capitalists, an almost totally free exchange market, a predominantly free price system and much freer banking activity.

Of course, as always, the poor people are the most badly hit by inflation and the consequent anti-inflation policies. They are paying a high price through a generally low level of salaries, a sacrifice which we should understand and appreciate. But as money is again being saved primarily in the local banking system, and profit margins are being generated again, capital investment is rising, the factories are increasing their usable capacity towards normal levels and any student of von Mises knows that this is the beginning of the only existing road towards a better living standard for the salaried masses. In the meantime, though, "hard times" are here to stay, for some months at least.

These successes, though, could not have been obtained without the continued support of the Armed Forces which run the country and are fighting—and winning—a war. Because there was—and, up to a point, still is—a civil war in Argentina, against the marxist guerilla organizations which initiated it through treacherous means, such as kidnappings, bombings, killings of unarmed people, etc. And like any real war, it is a dirty one, with some deplorable excesses from some repressing authorities, regretted by almost everyone in this country, including the government itself.

The handling of guerilla forces by the Argentine government has been that typical and usual in a war: wherever an enemy is found, it is either taken prisoner—and held without trial—or shot on sight. We are not dealing with individual delinquents committing individual crimes, nor with gangs trafficking in drugs or protection. This is a hot war, with one party trying to change by force the government system into another—socialist and totalitarian—and with the other party resisting.

Bear in mind, to avoid misinterpretations, that the terrorists do not have any popular backing at all; in fact, the fight against them has had the consent and many times the active help of the common man, tired of barbarism and fear. Perhaps one of these organizations had a slight degree of popular sympathy back in 1972/3, but they lost it completely when they continued fighting against the then-brand-new constitutional government elected in free elections. They became, thereafter, totally isolated from the masses they claimed to act on behalf of. Neither was the terrorism in Argentina the answer of an oppressed minority—as in Ireland—or majority—as in South Africa. It was merely the result of ideological extremism at its worst: the selection, by an important portion of marxist groups—and, believe it or not, of neo-nazi ones converted gradually into marxists—of the violent road towards power.

As of today, terrorist violence has been diminished to 10 percent of what it was a year ago: guerilla groups have regressed to the initial stage of the classic revolutionary war, which means merely urban bombings and the like, no longer having the capacity they once had to deploy dozens of personnel and tons of equipment into a rural area or against a military unit. Nowadays, the majority of guerilla leaders and members have been apprehended or killed, or are out of the country, with the remaining cells isolated and demoralized. And we are enjoying here a much more peaceful life.

For the time being—and surely for the near future—there is no real alternative to the present military regime. All political parties—their activities suspended—more or less agree on the need of its continuance for some time. There exist, for sure, some pockets of supernationalist and statist influence within the Armed Forces. Excesses occur and a certain authoritarian streak is sometimes visible and operational. We are experiencing, in fact, a bad case of McCarthyism: many believe that any marxist—even those who are nonviolent—ought to be jailed and, for some people, any leftist or dissident is a marxist. You already know about this kind of situation.

Of course, I am not happy with the situation as it is, especially so in some aspects. Your motto: "Reason: consider the alternative," is a constant reminder of the sorry state we are still in, since the "alternative," that is, force, is our present. But it must be borne in mind that the guilty party is not the present military government but the initiators of this hell: the violent terrorist organizations. Yes, I am not happy, but neither—I am sure—is President Videla. Because the purpose of the Armed Forces is not the implementation of a neo-fascist dictatorship forever and for the benefit of a minority of whatever nature, but the foundation of a new democracy, without the curses of violence and inflation. This was precisely, by the way, what the Allied Forces did in Germany back in 1945/6. At that time and there, too, force was in command and—for example—anybody could be imprisoned without the benefit of a trial, for months.

This is why the antagonistic attitude of the Carter Administration toward Argentina is wrong and, worse, seems grotesque if considered in light of its present love affair with Cuba, the instigator and financer of all marxist terrorist groups in Latin America and newly self-proclaimed strike force in Africa, a la imperialist.

Meanwhile, we are still doing our best, working and trying to make a freer and more democratic Argentina for us and our children. In that task, we could use a little help from our friends, instead of a new kind of big stick. But if necessary, we are ready to make it on our own, against any kind of pressure, of whatever origin. Perhaps, this is why Vietnam was lost and Argentina is being won.