The financial markets were enthusiastic about Mauricio Macri’s election as president of Argentina in 2015, glad to see a businessman in charge of a country they had long shunned. The Financial Times said it marked ‘the beginning of a new political era’. Davos had found a new star. Now Argentina is in crisis again, and asking for help from the International Monetary Fund (IMF). Macri sees himself as a victim of Argentina’s fate — ‘to fall down, get up, then fall again, over and over again.’
The pattern of economic growth is similar in most countries: peaks, troughs and occasionally a period of sustained growth. Argentina’s GDP graph looks more like a series of convulsions: a fall of 10.9% in 2002, peaks of 8.8% in 2003 and 7.7% in 2007, zero growth in 2009, another peak of 7.9% in 2011, and barely 1% growth in 2012. In 60 years, Argentina has had four defaults on debt, 26 agreements with the IMF and two periods of hyperinflation.
In 1983 the economist Marcelo Diamand analysed these erratic ups and downs, which began in the early 20th century, and concluded they were due to political conflict between two factions with irreconcilable policies. He saw Argentina as a pendulum: its swings would explain Macri’s election, the failure of his economic policy and the coming 2019 presidential election.
At one end of the swing were the agricultural oligarchs who had emerged under colonial rule and watched their herds multiply from a distance, growing rich on exports made possible by the extraordinary fertility of the Pampa. They lived in Argentina but thought European, importing clothes, furniture and ideas from Europe, and sending their children there to be educated.
With Perón, everything changed
At the other end were the urban working-class who had appeared in the early 20th century when manufacturing industry arrived. Argentina’s fertile soil gave its agriculture a natural competitive advantage; its industries were (...)
