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CHAPTER 1
IN SEARCH OF SOCIAL REFORM
The most influential study published in Argentina in 1945 was a book few people read. Written by the nationalistic journalist José Luis Torres, it described the country's history from 1930 to 1943 as a period of fraudulent elections, social injustice, and capitulation to foreign economic powers. The distinctive label for the regime was oligarchy, a term that nationalists, leftists, and U.S. observers used to characterize both an unfair system and a backward society in which no modern sense of universal rights prevailed over wealth. The argument was appealing but not particularly original to the country. From then on, what reverberated as a symbol of the historical transition between a sordid past and a bright future were the three words of the title: La Década Infame (The Infamous Decade).
The book's title conveyed the sense of national purification that Colonel Juan Perón wanted to ascribe to the 1943 Revolution. Torres, an acquaintance of Perón, had put in writing the feeling of a rupture with the immediate past that nationalism conveyed. On 4 June of that year, a group of army officers overthrew President Ramón Castillo, putting an end to a period of electoral fraud that had started in 1930, after the military coup against the elected president Hipólito Yrigoyen. That day, Perón, an ascending but by no means powerless figure of the revolution, started the construction of a new relationship between the state, politics, and the massive working classes that became the single most important event in Argentine history.
In the nationalistic narrative, the past of simple exclusion and oligarchic domination had finally been left behind. Yet infamous as it was — "a thinly veiled conservative dictatorship," in the words of American scholar Robert Alexander at the time — the preceding decade had been much more complex than the blighted era against which Peronism fashioned its disruptive identity. Conservative governments, facing the effects of the Great Depression, had experimented with interventionist policies that helped Argentina's economic recovery. Agricultural exports to British markets made Argentina one of the richest countries on earth. In order to defend this relationship from the rising dominance of the United States, elites developed a set of cutting-edge arguments against the primacy of economic power over political sovereignty. The oligarchic landowners who benefited from trade with the United Kingdom were prominent, but in their shadows flourished a group of industrialists. In parallel, a modern working class emerged in the main urban centers. The state was as repressive as it was acquiescent to union demands. Many among the elites who controlled the country were aware of the fact that society was changing beneath their feet, and they explored, however ineffectually, the improbable gamble of integrating these new sectors without sacrificing their own power. As much as Peronism inaugurated a new era in 1945, it did so by recasting into a new vision the trends that preceded its arrival.
Argentina's relationship with the rest of the world was a central realm in which elites worked out their views of change. Argentine nationalists, liberal intellectuals, and the Church established their positions in domestic affairs by situating the country in a global context. They produced ideas of race, class, and nation through which they explained the country's enormous economic prosperity, Argentina's modern economy in relation to Latin America, the threat that the expansion of the U.S. economy posed for traditional values in the region, and the social formation of which they were the leading force.
This chapter examines ideas about Argentina's place in the world during the 1930s and early 1940s, and look at the Ministry of Foreign Affairs as the favored venue in which these debates coalesced into a dominant, fluid worldview. As a privileged space in which global debates took place, the Ministry of Foreign Affairs was an "institution of hegemony" for a narrow elite. This body was perhaps so narrow that the arsenal of rhetorical, political, and juridical tools of modern politics that it produced was easily appropriated by sectors then left out of power, which came to overthrow this elite years later. In particular, it shows the tensions within dominant groups concerning democracy, modernization, and reform. It examines how government officials tried to create a coherent worldview by discussing social rights and political citizenship as central to the country's foreign policy. While liberal and nationalistic sectors of the administration were unable to translate these principles into a domestic agenda, the study of the Infamous Decade's foreign policy demonstrates how elites were more attuned to the need for these changes than the later Peronist rhetoric suggested. Moreover, this chapter examines the ground that these elites shared with the sectors that overthrew them, ultimately revealing a productive space that connected domestic and foreign concerns. It shows how the regional competition with the United States was conceived — in legal, political, and philosophical realms — in terms of a challenge to the primacy of property rights, believed to be the driving force in the emergence of the inter-American system as promoted by the United States. This "Argentine challenge" predated the arrival of Perón and persisted, while he was in office, in a different and more threatening form.
A Modest Industrial Revolution
Latin America reacted to the effects of the Great Depression of the 1930s in large part by using import substitution to deepen the industrialization process that other countries had started in previous decades. The three largest economies in the region — Argentina, Brazil, and Mexico — bounced back stronger than before and, in some aspects, sooner than the United States. In Brazil and Mexico, this process was accompanied by an at least partial adaptation of political institutions to lingering "social questions," such as those regarding the inclusion of disenfranchised masses into politics and the expansion of economic and social rights for the growing urban workers and peasants. However, in Argentina, this was not the case. In Mexico, President Lázaro Cárdenas (1934–1940) expanded the revolution by enacting agrarian reform, passing a progressive labor code, and expropriating U.S. oil companies. In Brazil, Getúlio Vargas led a military coup, in 1930, that put an end to the liberal republic and set in motion authoritarian and controlled social reform. Argentina went in the opposite direction. In September 1930, a military coup overthrew the populist government of Hipólito Yrigoyen, starting a thirteen-year political period in which, as the historian Barbara Weinstein says in relation to the last years of the liberal republic in Brazil, "regional oligarchies monopolized political power, [by] manipulating elections and minimizing popular participation."
The crash of 1929 badly hurt Argentina. It disrupted the basic functions of an economy grounded in its external sector by dependency on the exports of raw materials to Europe and the import of manufacturing and capital from Europe and the United States. Even if the GDP did not fall in Argetina as far as it did in most of the Western Hemisphere ("only" 13.2 percent between 1929 and 1932), exports dropped from one billion dollars in 1928 to $335 million four years later. The social impact was evident in an unemployment rate that soared above 25 percent. In 1933, the conservative government made a crucial step toward reestablishing exports by signing the Roca-Runciman Pact with the United Kingdom (named after the two signatories, Argentine Vice President Julio Roca Jr. and the president of the British Trade Council, Walter Runciman). Argentina resumed its pre-1929 status as privileged provider of beef for Britain. In exchange, Argentina exported 85 percent of its beef through British meatpacking firms, removed all tariffs for British manufactures, and gave priority to British products for purchases abroad, to be bought with pounds obtained from its exports to British markets. Historians have characterized this agreement as a form of neocolonialism, albeit one that provided a comfortable position for Argentina in the world economy at a critical moment.
Some critics of the Roca-Runciman Pact exaggerated the domestic limitations it imposed. But they rightly made the treaty a symbol of Argentine dependency by associating the imbalance of the foreign trade with the domestic inequality in income distribution. This accusation foresaw the basics of economic discourse in the decades to come. Since the late 1950s, developmentalist theories centered on terms of trade, in particular the relation of export prices to import prices, to understand the domestic dynamics of Latin American dependency.
Yet in the shadow of the policies that Roca epitomized, the economy evolved in ways that the government did not necessarily promote and that its critics did not expect. The pact implied an early reopening of the country's foreign trade and underpinned a recovery that was already under way. In the following years, the government made a series of decisions that appeared to be integral parts of an early Keynesian program. In reality, Keynes's ideas of public spending as a way to expand domestic demand had not yet been published, and the conservative administrations did not share their embryonic versions anyway. As free trade crashed again with the 1937 recession, Argentina made other bilateral agreements in addition to the one with the United Kingdom, which represented some 60 percent of its exports. In search of revenues, the administration built a large barrier against imports through high tariffs, protecting a frail industrialization and helping to rebuild the country's exports. By addressing infrastructural bottlenecks and the demands of local caudillos and by trying to absorb the available labor force to avoid unemployment, the government expanded its presence and fueled domestic demand. Against the laissez-faire that it promoted, the government spent more than it collected during the worst years of the Depression. By the mid1930s, the country had the second-largest industrial sector in Latin America, only after Brazil. Unlike its neighbor, Argentina had no steel industry, as observers noted. But Argentina's economic landscape had changed drastically. In 1936, the Economist estimated that "Argentina is still far from exporting manufactures ... but ... its dependence from imports has considerably decreased," which it explained by an "industrial revival of the last years." It was a surprising compliment for a country governed by an oligarchy of landowners and ranchers. Rather than an adherence to Keynes's ideas, the actions of Argentine elites amounted to what Pablo Gerchunoff and Lucas Llach playfully called a "passive Keynesianism." It showed how notions of modern industrialization, economic nationalism, and social inclusion had permeated the thinking of dominant groups and took those groups' political view farther than the term oligarchy suggested.
Only in 1940 did the government present an economic plan that advanced interventionist aims, a proposal that came to be known as Plan Pinedo, after the minister who wrote it. But even then, the proposals were transitory exceptions in light of a coming global conflict. The plan was never implemented as such, but it offers a picture of how ideas about anticyclical public intervention pervaded economic debates in Argentina (and the rest of Latin America) by the early 1940s.
Social Reform
FACTORIES PLUS CITIES EQUALS WORKERS
At first glance, the elites' realization of how much the country had changed under its rule did not affect its old habits. Electoral fraud and limited political participation for workers continued. Doubtless, the most outstanding feature of this large reconfiguration of the Argentine economy was the emergence of an industrial sector and a modern working class, which occurred mostly but not only in the expanding urban centers. Vast textile factories, symbolic of the industries that British imports had suffocated, appeared in Buenos Aires and its main industrial suburbs. British and U.S. meatpacking factories grew and diversified. Imports that had once defined Argentine dependence on the British empire were increasingly supplanted by local production. In 1929, Argentina produced just 7.7 percent of the cotton textiles it consumed. A decade later, that number had climbed to 57.6 percent. Some national factories produced capital and intermediate goods. The factory funded by Torcuato Di Tella Sr. came to symbolize national industrialization. The closest representative of an Argentine national bourgeoisie, Di Tella found a way to obtain protective tariffs from the government and to supply the domestic market with goods that were either more expensive or unavailable abroad before and after 1929. As his son, the renowned sociologist Torcuato Di Tella Jr., demonstrated decades later, the 1930s witnessed a notable growth of the textile industry, metallurgy, and the steel industry.
These transformations brought along others. Even if elites preferred European fashion, most people wore nationally produced clothing. The expanded domestic market consumed food produced in national factories and harvested in national fields and, in some cases, with national machines. Workers, consumers, and products traveled throughout the country in a transportation system more extensive than those of countries three times the size of Argentina. But the most visible changes could be seen in the streets of Buenos Aires, in the expansion of factories in the main industrial suburbs of the country, in the frantic activity at the ports of Rosario and Buenos Aires, in the wineries of Mendoza, in the wheat fields of Lincoln in Buenos Aires Province, and even in the sugar mills of the remote Chaco territory.
The industrial economy became increasingly diversified but remained grounded in processing raw materials. It was in this setting that the future worker attachés found their first jobs as young industrial workers. Before Pedro Otero became a city employee, in 1937, and well before becoming a Peronist labor diplomat, he carried two-hundred-pound bags as a worker on the Buenos Aires docks in the 1930s. In 1936, a decade before Agustín Merlo became the representative of Peronism in Washington, he worked at the U.S. meatpacker Swift, in the industrial suburb of Berisso, later known as the birthplace of Peronism. In Las Palmas, a company town in the Chaco territory, León Segovia, the future attaché in Paraguay, was hired as a welder in the local Ingenio, the largest sugar factory in the northeast in the 1930s. In the Province of Buenos Aires, the railroad worker Modesto Alvarez was transferred to a post in a small, countryside town that, like other such municipalities, depended on both the country's export performance and the trains' reliability. While there, he joined the Socialist Party, an involvement that informed his political future as attaché in Bolivia. In the late 1930s, César Tronconi, who would later become an attaché for Perón in Cuba, led a series of food-industry strikes in Entre Ríos Province. By 1941, Tronconi migrated to the Buenos Aires working-class neighborhood of Pompeya and found work at Tronconi Sausages and Cold Cuts, an expansive meatpacking factory owned by a distant relative.
More and more diversified jobs appeared. But the social costs of that economic reconfiguration were similar to those of any period of original accumulation since the Industrial Revolution. During the Depression, unemployment reached some 25 percent, and even though that number dropped after a decade, salaries remained stagnant at 1929 levels or below as inflation eroded purchasing power. Workers had grown as a percentage of the total population, yet their share of the national wealth had shrunk. In the mid-1930s, migrants from the interior arrived in the city of Buenos Aires. The city's working-class suburbs and poor villages grew. Decades later, the social writer Bernardo Verbitsky called them villas miserias. These shantytowns, similar to Hoovervilles, emerged on a massive scale. In the meantime, electoral fraud guaranteed that the workers' and peasants' votes hardly mattered. To a large extent, government and politics still functioned mostly as a club of notables that included wealthy landowners, liberal educated professionals, nationalistic military groups, and the Church.
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Excerpted from "Ambassadors of the Working Class"
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