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Fourth International, August 1942


Terence Phelan

The Real Situation in Argentina


From Fourth International, vol.3 No.8, August 1942, pp.236-238.
Transcribed, Edited & Formatted by Ted Crawford & David Walters in 2008 for the ETOL.


There is growing increasingly in the US a belief, nurtured by the apologists of Yankee imperialism, that the Argentine Republic is a mere tool for the Axis. It is necessary to scotch promptly this misleading notion, in which oversimplification and downright slander are skilfully blended.

The anti-imperialist struggle in any colony or semi-colony inevitably is directed against the imperialist power or powers which have the greatest stranglehold on its economy. Since, in the case of Argentina, those powers are Great Britain and the US, it follows automatically that they are the main targets of anti-imperialist sentiment. All other factors – racial, linguistic, geographical, or even parallelism of internal regimes – though admittedly existent, are secondary and subordinate to the inescapable central relationship: imperialism vs. semi-coloniality.

It is almost equally axiomatic that the semi-colonial bourgeoisie will seek aid against its principal imperialist exploiter from that imperialism’s rivals. This is nothing novel: for many years one sector of the Argentine bourgeoisie has sought – and obtained – Yankee imperialism’s support against British imperialism. It is, then, only natural that at the present conjuncture Argentina’s ruling class sees no advantage in alienating the Axis imperialisms who are potential allies against British and US imperialisms; but rather attempts for the moment, following the fluctuating fortunes of the war, to play one imperialist bloc off against the other. The more so inasmuch as the economy of the US and Argentina (principal exports: beef, mutton, wheat, linseed, oats, maize, rye, barley – of which only linseed is needed in the US) are largely competitive and not complementary – as in the case of certain specialized tropical Latin American countries. For its rich agrarian exports, it is not at all to the US that Argentina must look, but to Europe; and until the Argentine agrarian oligarchy is certain who is going to be the eventual master of Europe, it has no desire to offend the Axis.

Yet it is only by contrast with the collapse of almost all the other Latin American nations to the ultimatum of Washington that Argentina’s very limited resistance can be made, by interested bourgeois propagandists, to appear even anti-Yankee, let alone pro-Axis. In point of juridical fact, Argentina’s status is not even that of a neutral, but of a pro-US non-belligerent. The one practical governmental action taken to date has been the formal declaration opening Argentine ports without time-limit to US war-vessels while closing them to the comparable ships of the Axis. It is a demonstration of the success of Washington propaganda that Argentina’s refusal to enter the war at the command of Yankee imperialism is widely considered as “an unfriendly act” toward the US, or as a proof that Argentina is a mere Axis tool.

No, the ruling sector of the Argentine bourgeoisie is merely seizing – and with rather prudent timidity – on Anglo-Yankee imperialisms’ preoccupation elsewhere to liberate itself as far as possible. How far possible we shall proceed to examine.

Argentina’s Industrial Expansion – And Its Limits

The momentary conjuncture is without doubt relatively favorable. The Argentine bourgeoisie shrewdly observes that el imperialismo yanqui has its hands so full with the imperialist war that it can for the moment attend only to the consolidation of its hegemony over those Latin American nations which collapsed under its first offensive, and must postpone a settlement of accounts with the hold-outs, such as Argentina – for whom, however, it is carefully placing some particularly unpleasant rods in pickle. This opportunity the Argentine bourgeoisie is now seizing on, to make what hay it can, while watching with extremely cautious attention the course of the war to see just how long it can get away with it.

Nobody can deny that its efforts are determined and, from Washington’s point of view, disquieting. Despite raw material shortages, despite the US unofficial embargo on machinery replacements, Argentina’s important light conversion industries are not only making every effort to keep going, but are seizing on Yankee imperialism’s momentary absence to steal certain small sectors of its markets in bordering countries. As for heavy industry, for decades one of the “basic” assumptions about Argentina, carefully propagated by British imperialism and its native tools, was that Argentina, the Heaven-blessed land of shoulder-high rich grazing grass and eight-foot deep wheat-growing top-soil, lacked the prime essentials for the development of a heavy industry, coal and iron deposits; and that in consequence it must necessarily import all its coal, iron and steel products from industrial Great Britain, in return for Great Britain’s providing a market for its agrarian production. Now that British imperialism can no longer fulfill its half of the bargain, the Argentines have “discovered” and begun feverishly to exploit the rich coal and iron-ore deposits of the Argentine provinces of Salta and Jujuy.

But it is too late. To exploit these “new-found” riches on a capitalist basis, Argentina must either slowly build up its steel and heavy capital-goods industry out of its own production, step by step, as England took half a century to do when industrialism was young; or it must import ready-made the heavy machinery, equipment and special steels for the purpose. The onrush of the historic process grants no time for the first method; as for the second, England is obviously unable today, even if it were willing, to provide its semi-colony with the weapons for winning its own industrial independence; the US, if it provided the materials at all, would be willing only on terms of such grossly imperialist exploitation, plus demands for such political concessions – as it has already been forcing on Brazil, Mexico and Venezuela – that Argentina, far from being “liberated,” would be more dominated than ever.

Still, the national bourgeoisie, within the limits of its possibilities, is driving hard ahead. “YPF” (Yacimientos Petroliferos Fiscales), the government oil corporation, which already produces 65 per cent of Argentina’s oil, is expanding as fast as material can be obtained, though naturally the US government backs its imperialist companies by limiting export of such material or refusing it altogether. An indication of the present spirit of the Argentine bourgeoisie is a recent incident where in the US oil companies, who had long tried to argue the YPF out of existence, claiming that only corporations of their long experience and technical resources could adequately develop Argentina’s petroleum riches, were sharply warned by the government that it was “disgusted with the pretended failure of these companies to profit by the concessions that had been granted them,” and ordered them to stop stalling and increase production forthwith – at least to the YPF level of efficiency. Meanwhile, road and rail construction is being rushed to bring in Bolivian oil.

The Argentine government is utilizing its blocked sterling credits in England to repatriate its own bonds or those of nationally-owned companies. Between November 1941 and March 1942 alone, the total of such repatriations reached a sum of more than $16,000,000, despite all the obstacles placed in the way by British imperialism. A trade treaty with Spain, involving the exchange of Argentine cotton and wheat against a similar amount of “Spanish” (German?) heavy machinery and other industrial products, is now in negotiation. An Argentine mission is in Chile trying to work out a system, by the reciprocal lowering of customs barriers, to complement and as far as possible fuse Argentine-Chilean economies; meanwhile trade between the two countries has trebled, An enormous program of road building (aimed secondarily at the British railroad semi-monopoly) is now in progress, the new roads leading principally either to fast growing mining and oil regions or to the bordering countries with which Argentina is making a concerted effort to increase its trade. With other Latin-American countries, indeed, Argentina’s trade has increased more than 60 per cent in the last year as a result of the government’s deliberate policy. Argentina’s trade with Brazil is now second only to that with the US, the once mighty pace-setting England having fallen to third place. Argentine purchasing missions bid, and sometimes successfully, against Yankee imperialism itself, for the natural rubber from the smaller Latin American countries. As a sort of saucy maraschino-cherry on this cake, Argentina has been exporting, of all things, machine-tools to the hard-pressed US arms-industry.

The Growing Economic Crisis

But despite these strenuous efforts, Argentina’s position is difficult and at moments approaches the desperate. The war, closing markets and lessening shipping, has sown broadcast through the important agrarian sector of Argentina’s economy a crisis which contrasts sadly with the boom during the first World War, when the submarine blockade was so much less severe. France and Italy were sure markets and prices ran high and handsome. Then it took all the prudent obstinacy of President Hippolito Irigoyen to hold off the popular demands that the republic throw in its lot with the Allies by an open declaration of war. In this war, the situation is reversed, and the Castillo government’s refusal to get sucked into the maelstrom by the US has won widespread support among all classes of Argentines.

The intervening agricultural crisis of 1929-36 the agropecuary bourgeoisie and its finance-capital allies “solved” on the backs of the rural proletariat by slashing to about half the wages of farm-workers – from the simplest oilers and water-tenders of the threshing-machines up to the crack engineer drivers of the havester-combines. But in the present crisis, of even greater intensity, cut wages though they may, there is little margin left there. And the banks are in bad shape. Due to a speculative increase which between 1886 and 1929 lifted land values more than 3,000 per cent, the mortgage debt on land had reached already by 1930 the enormous sum of about three and a half billion pesos (about $900,000,000). This bond structure is beginning to totter dangerously. More and more the government must intervene; and its schemes, such as that for crop purchases at guaranteed prices, have reached a stage where bankruptcy threatens. In desperation the bourgeoisie is trying once again its often-failed attempt to turn the clock of history, backward by creating artificially a class of semi-proletarian petty peasant proprietors, whom its advanced large-scale capitalist methods, by the laws of competition, have heretofore wiped out as fast as they were set up.

Meanwhile even the most cursory study of the Argentine price structure indicates the existence of a still small but dangerously increasing inflation, a situation which has been nowise helped by the “panic capital” which until recently poured in, and is still trickling in, from Europe.

There are serious undercover rifts in the bourgeoisie, one sector being determined to hold out until the European market for agrarian products is reopened, meanwhile attempting to expand the internal and Latin American markets; another sector, already terrified of ultimate collapse or reprisal, urging a modus vivendi with Yankee imperialism as soon as possible; while a small but noisy third sector, persuaded that the Allies, especially England, are already beaten, wishes to push the government to take measures openly in favor of the Axis, which to date it has prudently refrained from doing.

The National Bourgeoisie Cannot Free Argentina

The growing crisis expresses the established semi-coloniality and dependence of even advanced “independent” Argentina; economic liberation under the leadership of the national bourgeoisie is excluded as a practical possibility.

For a clearer understanding of this fact, it will be useful to point out that imperialist exploitation of Argentina operates rather differently from imperialist exploitation of the Indo-American countries of Latin-America, where imperialism directly super-exploits both the country’s natural wealth and the labor-power of its backward native races. In Argentina, on the other hand, with the vast majority of the national wealth in the hands of the national bourgeoisie, and no backward native races to exploit, it is through public-service companies, conversion industries, the “luxury” trades connected with the living standard of the national bourgeoisie, and complex banking tie-ups, that imperialism operates; and national equivalents either parallel these imperialist enterprises or – even more frequently and significantly – are interlinked with them in so inseparable and complex a structure that it is practically impossible to separate them.

In the abstract, this would be the moment for the Argentine national bourgeoisie to free itself with one bold stroke from all imperialisms, while they are elsewhere locked in life-and-death struggle. That stroke – the only real method – would be by expropriation. But – and here is the nub of the matter – the Argentine capitalists cannot bring into question imperialist rights in private property in the means of production without simultaneously bringing in to question their own. It is significant that, when one talks to a frigorifico-worker at Swift’s or Armour’s great plants at Berisso about the crimes of Yankee imperialism therein, he is more than likely, without denying those crimes, to expatiate on how much worse conditions are in the great plants of the Argentine-owned CAP. At the time of its rise to power the European bourgeoisie went so far in its purely theoretical thinking as to oppose private property in land and propose the nationalization of the soil but, as Marx pointed out, “in practice, however, it lacked the courage to carry out this measure, since this attack against one form of property would be very dangerous for the other form.” Similarly with bourgeois “national liberation,” as advocated by the Argentine fascists. The “radical,” fascizing sector of the bourgeoisie may launch demagogically anti-imperialist slogans as if there were no class struggle. But the Argentine bourgeoisie cannot expropriate imperialist enterprise without setting in motion a train of action such that they would end by being themselves expropriated by the Argentine proletariat. By their very nature and position, therefore, the Argentine capitalists are condemned to limit their anti-imperialist struggles to teetering, zigzagging maneuvers. An instantaneous flashlight portrait now shows them dramatically tearing off in what seems to be a principled and permanent direction. But another shot, taken a historic moment later, would reveal them equally determinedly off on the contrary tack. It is only those who think such snapshots are a complex portrait of character who can be taken in by the bourgeois apologists who claim that Argentina is unmitigatedly an Axis stooge. Let the fortunes of war take tomorrow a sharply contrary turn, and the Argentine bourgeoisie will be seen scampering back to safe cover under the wing of el imperialismo yanqui. It will “resist” as long as it is safe to do so, and not a minute more.

But the Argentine bourgeoisie is, fortunately, not the only factor in Argentina. There is the heartening reality of the Argentine industrial proletariat, a million strong, slowly learning, slowly gathering its forces, groping for leadership. Except for an occasional petty-bourgeois “revolutionary” crank lost in a vulgar rage against everything North American, the genuine revolutionary forces in Argentina look to the US proletariat as their surest ally, for understanding and solidarity. Those American workers who gullibly swallow the propaganda of the journalistic trained seals of the US bourgeoisie to the effect that Argentina’s limited-enough resistance to el imperialismo yanqui make all Argentines automatically Axis agents, are failing their Latin-American brothers. Cuidado, hermanos!

Quito, Ecuador
July 10, 1942

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