The emergence of the government’s new Alliance with Menem’s former Minister of Economy, Domingo Cavallo, at his core, could be the last attempt at saving what is left of the régime of domination established in 1983, caught between the capitalist crisis and the workers’ and people’s struggles. But this very act of ’salvation’ inaugurated a régime with pre-Bonapartist characteristics. All the political institutions that the ruling class had used to preserve its hegemony and which have gone through a deep process of decomposition throughout the past 18 years, have now been discredited. Faced with the government’s weakness, the parliament has been unable to limit the dissatisfaction of masses and find a solution to the economic, political and social crisis gripping the country. This inability was most clearly expressed when the parliament granted Cavallo, the Minister of Economy, special legislative faculties.

This political crisis of bourgeois democratic regimes, is being experienced by a growing number of Latin American countries with their own peculiarities. Colombia, Paraguay, Bolivia, Peru, and Ecuador are the most evident cases.

Meanwhile, during and after the crisis, all the representatives of local progressivism -as usual- have begun to play their reformist role. Radical deputy Elisa Carrió, who denounced the legislators that ’have climbed aboard the Titanic’ by voting the delegation of faculties, and who proposed the ’refounding of the republic’, took back her accusation of ’infamous traitors to the country’ as soon as she could. How would this eloquent deputy ’refound’ who-knows-which enigmatic new republic, if she is not even capable of upholding a modest judicial accusation against the representatives of the ’old’ republic?. Other tendencies of the center left have raised hue and cry and proposed a referendum as a solution for the crisis. Others are busy building new political groups and new ’opposition’ fronts, in order to try their luck in the forthcoming elections, while right-wing Minister Cavallo will push ahead with his ’neoliberal’ policies before and after the October elections. Cowardly towards power, helpless in the present and fearful of the future, the new center left does not and cannot constitute an organic force able to save the poor and exploited nation from its ruin. As the political leadership of the petty bourgeoisie they kneel before the big bourgeoisie and pay tribute to imperialist capital, before which they bow servilely, thus being impotent to represent the genuine interests of the ruined middle class who can only find a solution to their needs in the only class and program that can lead society ahead, the working class.

Senile Keynesianism

The intellectual and political representatives and union leaders that turn to progressivism or the so-called ’new thought’ have seen their new attempt to achieve a ’social’, ’participative’ democracy or one of ’equal opportunities’ collapse after the complete failure of Alfonsin’s goverment (1983-1989). Since the crisis and downfall of Menemism, hundreds of articles, magazines and books have captured their growing dissatisfaction with the different economic and political initiatives implemented by the goverments of the time. Democracy as a ’procedural’ mechanism was associated with neoliberal policies and democratic restrictions.

"Democracy or cutbacks" says the Central de Trabajadores Argentinos (Argentinian Workers’ Union Federation, CTA) led by Victor De Gennaro. Sociologist José Nun, a regular in journalist Horacio Verbitsky’s editorials, has claimed in his book ’Democracia ¿Gobierno del pueblo o gobierno de los políticos?’ that what is needed is something like a ’Keynesian democracy’, based on ’people’s well-being and participation’ and which would ameliorate the social conflict1. Thus, he overlooks the fact that welfare States have only been possible in the imperialist States, particularly during the postwar boom, and that semicolonial and dependant countries like Argentina have at most achieved pseudoindustrialization by means of import substitution, being tied and subordinated to foreign capital. Center-left thinker Guillermo O’ Donnel came to similar conclusions, prescribing, against ’the authoritarian power of financial capital’, a ’productive alliance based on values of social equity and a reinvigorated democracy which would in turn lay the basis to rebuild the nation’2. But we insist, Argentina is a semicolonial nation, lacking sovereignty and linked by economic, political, military and cultural ties to imperialist domination.

All these people were supporters of Alfonsin’s régime, in which they sought to find a balance between parliamentary democracy and social justice after ’decades of military coups and populism’. Later they were joined by some who were disappointed with Menemism. Then they promoted ’transparency’ and the ’fight against ’corruption in opposition to Menem’s cutbacks. This accounts for the emergence of the Frepaso, after the ’Pacto de Olivos’ in 1994. This center-left group became part of De la Rúa’s ruling coalition in 1999 -a bloc made up of the Frepaso and the bourgeois Radical Party. Later on, they granted Cavallo the ’superpowers’ and were thrown into disarray. Those who first propped up the bipartisan régime, saving its parties from collapse, later fell down with them. The new center left that is emerging from the old, based on the spirit of class collaboration and the defense of the bourgeois State, will end up in the same way as its predecessors, torn apart by class struggles and the capitalist crisis.

The CTA, at one time claimed that a new ’antineoliberal democracy’ would emerge from the changed relationship between social forces, that is to say, from a State and government that would listen to the masses’ demands. ’Civil society’ could impose the people’s demands on the capitalist State. What De Gennaro and its center left co-thinkers have failed so far to explain is why the upswing of the people’s and workers struggles, as shown in the past four general strikes, the organization of the unemployed workers’movement and the mass opposition against the capitalist onslaught, have not led to unemployment benefits, ’participative democracy’ nor anything like it. Quite otherwise, they have nurtured something new, "Cavallism". Because for progressivism, the class nature of democracy is, in the best of cases, an incomprehensible hieroglyphic or else a demodé Marxist dogma.

Post-counterrevolutionary democracy

Actually, ’cutbacks’ and ’democracy’ are not incompatible, on the contrary, they constituted the framework in which the political régime has operated for 18 years. In the words of progressives, democracy was not meant to be Keynesian, but ’neoliberal’ through and through. And in this case, as in so many others, the aristocratic Schumpeter was more realistic than all the center left put together: "democracy is what it is."
The bourgeois democracy of 1983 emerged from the people’s struggles against the dictatorship, but was marked from the beginning by the defeat of the working class and its most combative vanguard under the military dictatorship on one hand, and by the country’s defeat in Malvinas before Anglo-American imperialism, on the other. It emerged from those historical defeats that allowed US imperialism to promote bourgeois democratic regimes in Argentina and in the rest of Latin America, all of them instrumental in their domination and much more secure and stable than the old worn-out and discredited dictatorships.

The democracy inaugurated in 1983 was thus a post-counterrevolutionary democracy. Under the cover of democracy and the Constitution the ruling class and imperialism carried out an extraordinary political, economic and ideological offensive against the masses. This capitalist offensive carried out under the banners of democracy took place in different countries and in different circunstances3, as part of the imperialist counteroffensive and as a counterrrevolutionary response to the uprisings that took place worldwide from 1968 to at least 1981. These policies of democratic counterrevolution were always combined with punitive military interventions as in Iraq, or support for self-coups like Fujimori’s.

The bourgeois democratic régime, whose most solid institution has been perhaps the universal vote, creates the illusion of sovereignty and autonomy in the decisions of the masses through voting. Representative democracy ignores the class antagonism in production relationships and treats citizens as free and equal before the law, beyond their belonging to a certain social class. This democracy, progressivism’s panacea, has been the most effective political instrument in pushing ahead with an unparalleled capitalist offensive and imperialist take over, with no precedent in any political régime in national history -except during the ’30s.

Without the capacity of the subordinated classes to seriously question private property and imperialist domination altogether, the exceptional stability of Argentinean democracy was the consequence of a new bloc of bourgeois power constituted throughout the recurrent crises in the 80s, and which was consolidated during the 90s. This process could be divided into three stages: 1) under the military régime the indebtedness and the differential interest rates that allowed for increased financial speculation along with the flight of capitals, the opening of markets and the nationalization of foreign debt in 1981-82 were the key weapons of the massive transference of resources away from the workers and the masses and into the hands of both local and foreign big capital. This continued under Alfonsín’s government. The State was a key lever in this exorbitant transfer of resources. The rapid increase of foreign debt that was later combined with a deep economic recession during the 80s fuelled the flight of capitals. It is estimated that, through these mechanisms, "the total transfer made from the state to concentrated capital in the 80s was worth 105 billion dollars"4. Of this amount it is believed that about 35 billion came from the surcharges paid by the state in purchases and contracts, directly benefitting companies like Pérez Companc, Techint, Siemens, etc., that is to say, the association of the so-called ’industry captains’ with foreign corporations. The world capitalist crisis, the end of the postwar boom, the exhaustion of the import substitution stage that cleared the way for the opening of markets according to the productive needs of imperialist countries, concentrating on agroindustry and raw materials, and a domestic market mainly limited to the upper-middle class, brought about a change in the social base and alliances of the classes. The new ruling bloc has no intention of playing a demagogical card. On the contrary, it is permanently pursuing the devaluation of the labour force, and rests upon the concentration of capital in a handful of large corporations, establishing a long-standing bond with foreign capital on which it depends financially and technologically. Alfonsín’s government, after the complete failure of his Minister of Economy Grinspun and the ’debtors’ club’, reached an agreement with creditors and imposed an economy of war against the workers. By issuing currency and devaluation, it favored the devaluation of salaries on one hand, and by means of exports promotion it was able to get the revenues to pay back the debt, on the other. Even so, big capital managed to take advantage from the sky-rocketing inflation and the Radical government’s impasse. 2) Menem’s government, after some hesitation came to impose this program. The inflationary crisis, while the working class was prevented by the union leadership from carrying out independent policies, was used to push ahead with big capital’s unfinished tasks. The results are well-known. Later, the defeat of the struggle against privatizations stabilized Menem’s government and gave it enough strength to implement the whole of the establishment’s political program. This coincided with the relaunch of the US offensive worldwide -as the war against Iraq showed.

But the Menem’s government also modified the ’rules of the game’ by establishing a Bonapartist power that led to the crisis of the old bipartisanship that culminated in the ’Pacto de Olivos’. This pact meant a quantum leap. It codified the juridical and political needs of the establishment, i.e, to concentrate power in tune with the imperialists’ needs. The constitutional reform nurtured by the ’Pacto de Olivos, codified, among other things, the notorious provision 76 authorizing the legislative power to grant the executive special faculties.
Menem’s government went for a strong and centralized power, an open relationship between capitalist interests and State administration, to an extent never reached by the previous government. By means of the State Reform and Economic Emergency laws, the political party system and parliamentary debate were subordinated to the techno-bureaucratic efficiency of the state which concentrated the fundamental levers of capitalist reforms in its hands. Its decline, which began with the ’Tequila crisis’ in 1995, would later be reflected by the struggles of 1996 and 1997. 3) The onset of the world economic crisis in Southeast Asia in 1997, and the ensuing 1998 recession, the people’s struggle against Menem’s government and the rifts in the core of the bourgeoisie, were the essential elements of the crisis and exhaustion of the cycle that had begun in the 90s. The Alliance came to derail the masses’ struggle against Menem’s government, relegitimate the worn-away institutions of the bipartisan régime and nourish expectations; the Alliance’s government began with a certain ’reformist’ profile. But the Alliance was eroded by the crisis, the pressure from creditors, the bosses’ demands and the people’s struggles whose main characteristic was the reemergence of the working class with the past four general strikes and the development of the unemployed workers’ movement which has been the vanguard of the struggle. Cavallos’s ascent to power was the culmination of this process and at the same time the consequence of the decline of the régime of domination established in 1983.

Degraded democracy and Bonapartist tendencies

The fact that political democracy as a type of government, under the effects of the capitalist crisis and the workers’ and people’s struggles, is not widened or else becomes increasingly ’social’, as progressivism proclaims, is not only demonstrated by current experience, but by the whole contemporary society’s record. When Guillermo O’ Donnell and other representatives of native "progressive" sociology look for political solutions, they should not look for it in Max Weber’s postulates on the Weimar republic5, that sought to preserve and deepen democracy by controlling the State ’iron cage’ and ’inanimate machine’, in spite of a Socialdemocratic majority in parliament. They should rather look into Weber as an advocate of Cesarism, the one who understood that behind the reformist leaders were the German workers, and that the latter’s defiant power prevented the bourgeois parliament from acting freely, especially under the devastating effects of the postwar crisis, made worse by the draconinan terms of the treaty of Versailles. The one who believed that ’a nation’s interests are above democracy and parliamentarianism’6. This theoretician, the most lucid of the bourgeoisie of his time, leaned increasingly toward plebiscitarian variants, while the legitimacy of the Weimar republic was being challenged by the emergence of the proletariat. The ’democratic republican’ Weber of ’progressive’ sociology, is in fact the theoretician of a balance between parliament, the state bureaucracy and the Cesarist leader.
The heart of republican policies does not reside in the representation of interests and in ’participative democracy’, but in the effectiveness of power. "In mass States, this Cesarist element is ineradicable"7, he claimed, since politics are determined by the ’principle of small numbers’ and their room for maneuver. Hence a stable democracy, based on a parliamentary institution within which bourgeois fractions settle matters and achieve consensus requires, on one hand, an unprecedented economic prosperity and, closely linked to the first condition, the ability to grant the masses massive concessions. In Weber, the concern for democracy’s slow death under the weight of formal rationality goes hand in hand with the conviction that martial law is necessary in certain cases "in order to prevent the risk of going through what is happening in Russia". He is the advocate, therefore, not only of parlamentarianism, but also of the Cesarist-styled delegation of special faculties.

The State and national bourgeoisie

But Cesarist or Bonapartist tendencies in semicolonial countries like Argentina, in periods in which the crises worsen, are reinforced by a three-fold pressure: that of foreign capital and imperialism, which subjects the nation to its dictates, plundering the resources of the state and the society; that of the local big bourgeoisie, who, associated with foreign capital seek their own benefit by making the masses pay for their bad businesses during recessions; and that of the working class and the people that when resisting the capitalist offensive prevent bourgeois domination from being exerted by means of ordinary mechanisms, thus forcing the government to adopt extraordinary measures, in a dialectic of authoritarian measures and electoral deception.

The imperialist take over, the capitalist offensive against labor and the establishment’s extreme greed, leave no room for the progressives’ yearned-for redistributional policies, nor for policies of pressuring the bourgeois State, on which they depend. The Peronist union bureaucracy is also increasingly uncapable to wrestle major concessions to keep the working class in the grip of the bourgeoisie. This inability to grant important concessions is the wall all progressives come up against, no matter their belief that the state is not an instrument for capital’s rule (they hate Marxist definitions above all things), but an empty sack that can be filled with redistributional policies, beyond the real conditions of capitalist development. Peronism, as a bourgeois nationalist movement, tended to be overcome by the workers’ radicalization in the 70s. In the past few decades it has definitely become a political instrument of big capital. What the petty bourgeois center left needs is a bourgeoisie capable of recreating the past "glory days". Their theory of ’civil society’ as a social subject capable of transforming the State, just misses the point, showing that they have been unable to find any bourgeois sector able or willing to go for a ’different country’. The new center left has no other program than that which can be raised by some sector of the ruling class, nor any strategy other than class collaboration and bourgeois reformism.

Bonapartist tendencies in semicolonial countries

To be able to advance in their war against the masses’ standard of living, foreign and local bourgeoisies need to concentrate all the political instruments of power in the hands of their political representatives, denying the people any right to make decisions in order to impose their own will with no restrictions. The idea of ’Democracy for a hundred years’ turned into decrees of necessity and urgency, an injuction from a servile Supreme Court dictating the privatisation of the Argentine carrier, impunity for the military, dirty businesses worth millions, the sale and purchase of votes in the Senate, and a corrupt bond between the legislators and the large corporations. Even so, all these extraordinary measures, the widespread corruption and systematic violation of the reactionary Constitution, were not enough to put an end to the people’s discontent, save capitalists businesses and start a new economic cycle. Mr. Cavallo, a politician that had been bashed by all the representatives of progressivism, a name unaccepted by the population subjected to his policies, hated and rejected by the majority but faithful and responsible before financial organizations and local capital, was called to govern because of the impotence and paralysis of the republican institutions which were forced to turn to him. The State, controlled by monopolies and tied to international financial capital, is in constant contradiction with the population’s most basic needs, increasingly losing legitimacy in the eyes of the masses, which regard them a hollow shell. It is the presidency the one who adjudicates in favor of one bourgeois clique or another, rather than the ordinary parliamentarian proceedings. This tendency toward the degradation of democracy, to concentrate power in the hands of a handful of technocrats and ’saviors’ is not something exceptional but rather the most evident confirmation of the Marxist analysis on the class nature of democracy. The latter postulates its degradation and collapse under the hammer blows of the capitalist crisis and the uprising of the masses, giving the lie to the advocates of the so-called ’new thought’ and State ’neutrality’. (8)

Historical Exceptions

The fact that the democratic period of the past 18 years is an exceptional phenomenon is shown by Argentinean history. The period of liberal constitutionalism, at least from 1870-80 to 1920-30 was a relatively stable one -the exception being Yrigoyen’s period*- due to the fact that it rested upon the agrarian superprofits of the native oligarchy associated to an expanding English imperialism on one hand, and the relative immaturity of the proletariat on the other -a time when the masses were disenfranchised. But as the middle classes burst unto the country’s political scene, along with the emergence of the working class as a fundamental actor in national political life, the record of the different political régimes, from 1930 to 1983, was one of different Bonapartist-type régimes, either reactionary, like the openly proimperialist military dictatorships, or populist ones like Peronism. The latter rested on the labor movement in order to negotiate with US imperialism -to which it surrendered in the end- the share of national surplus value and the economic sovereignty over the country’s resources and the domestic market9.

These special conditions of State power are determined by the position of the bourgeoisie in backward countries, as exploiters of their own proletariat from which they obtain their capitalist benefit and as a semi-oppressed class, in a tug of war for the exploitation of its own market with foreign capital. In clear contrast with the proletariat’s social strength and iron grip of imperialist bourgeoisie, it stands as a weak social class, incapable of exerting its power in an independent way. This phenomenon fueled a great political instability during all of the twentieth century in backward countries.

The succesive political regimes since the so-called ’infamous decade’in the 30s, ranging from Peronism, the ensuing 1955 dictatorship that banned Peronism and the unions altogether, Peron’s comeback to power in 1973, right up to the 1976 coup, were a whole series of sui generis Bonapartist-styled regimes which included populist variants such as Peronism, or else military dictatorships and restricted democracies.
The exceptional current 18 year-long democratic period was thus ushered in by previous defeats that allowed for a relatively stable capitalist exploitation that went hand in hand with a post-counterrevolutionary democracy. But it is a democracy ridden with Cesarist features, one increasingly degraded because of the combined pressure of foreign capital and the exploited classes, paving the way for a further confrontation between revolution and counterrevolution.

The infamous pact of the XXI century

The onset of the cycle of military coups and institutional instability in the country started with Gen. Uriburu’s coup in 1930. The military régime that reinstated a fraudulent electoral system, led to the government of the ’Concordancia’, a coalition of conservatives, a faction of the Radical Party and ’independent socialists’ that supported Gen. Justo in power. The purpose of this infamous régime was to prop up the ailing superprofits of the crisis-ridden oligarchy. It was a régime of national subordination to imperialism that culminated in the Roca-Runciman pact, which established a real ’legal statute of colonial subordination’. This infamous pact was denounced by FORJA (Fuerza de Orientación Radical de la Joven Argentina), a group of young middle class intellectuals. In spite of FORJA’s class limits -which later led them to embrace Peronism- it took an anti-imperialist stand, something that today’s "progressives" do not even dare think about.

By means of this pact the local landowning oligarchy, in exchange for keeping a quota of 350 thousand tons of meat in the British market, handed the levers of the Argentinean economy over to the British rulers, i.e., the control of foreign currency, transport, oil production and the English and US meat-packing trust, among other things. Today, as in the 30s, this new "infamous" régime seeks a new legal statute of colonial subordination through the FTAA (Free Trade Agreement for the Americas), by means of which US imperialism seeks to obtain a captive market for its products, the control of raw materials, and all the resources of the continent. It is an ambitious project in its interimperialist competition with Europe and Japan in which it uses the continent as a game preserve. Can ’a project for a new nation’ and ’participative democracy’ still be built without breaking with imperialism altogether?

Political régime, imperialism and working class

Well-known center left journalist Horacio Verbitsky has made a seemingly deep but actually superficial analysis in one of his editorials. Explaining Cavallo’s role in the government, he describes him as a arbiter between ’dollarization-prone multinationals and the pro-devaluation lobbies’. Both during the 1982 crisis when Cavallo chaired the Central Bank, and later on his appointment as Minister of Economy in the 90s, he is regarded by Verbitsky as an arbiter between the different capitalist fractions. The relationship between the working class and the different bourgeois solutions to the crises remains mysterious, in a picture where the working class is always either a victim of exploitation and deceit or else subjected to State terrorism, inflation or unemployment. But the various types of political regimes that have been established are directly related to class struggle. Cavallo’s rise to the top has not only highlighted that the Alliance’s government failed in putting back together the bourgeois front that split up in the wake of the world crisis that started in 1997 and the Argentinean recession. It has also exposed the inability of the executive power in pushing ahead with cuts to state spending that threatened spark off a mass rebellion. This led to the ousting of ’arch-neoliberal’ Minister of Economy Lopez Murphy and the inauguration of Cavallo promising the ’revival’ of the Argentine economy. Thus, the government’s current position is far from stable, since it does not rely on the defeat of the masses. The big bourgeoisie was able to solve the crisis in a reactionary way because the official leaders of the mass movement, especially those that claim to be ’antineoliberal’ have failed to deliver a solution, that is to say, they have been a stumbling block in the road to the revolutionary downfall of the government.

Verbitsky’s analysis has an even bigger flaw. For him, imperialism boils down to ’transnational capital’, encompassing some Argentine companies within it. Therefore, he overlooks the fact that the democratic régime established in 1983 has been profoundly reactionary because it has been the vehicle for the imperialist take over of the nation, to an extent not even dictatorships like those of Onganía could achieve. But the word imperialism is alien to the "progressives", to the extent that they prescribe a ’model’ of ’participative democracy’, of ’inclusion’ and ’well-being of the people’, an independent and sovereign country, a ’new republic’, without touching even one of imperialism’s or capitalism’s interests, and breaking with multilateral agencies such as the IMF and the World Bank.

Imperialism and national Hegemony

There are different strands within the "progressive" camp. Certain ’sophisticated’ intellectuals propose a ’people’s bloc’ or a ’counter-hegemonic bloc’, -some of them stand by bigfrontist projects. They wrongly cling to Gramsci’s concept of hegemony, one that isolates class hegemony within a nation-state from the influence of the world economy and the state system in the imperialist stage. ’National demands come together in the concept of hegemony’, he had claimed, although these demands and their ’combination of national forces’ are modified by international conditions, very sharply at times of crisis, wars and revolutions10. The "Gramsci-styled" advocates of the ’new bloc’ and the ’new thought’ carry this mistaken view to new, undreamed-of heights, especially when they apply it to semicolonial countries. To what extent is the bourgeoisie in backward countries capable of building a ’historical bloc’, a long-lasting hegemony in those societies? The term "hegemony" should be at least be used conditionally. This theoretical limit is important in backward countries, which are dependent on foreign capital, and the State has no sovereignty, in which ’the sovereign majesty of Bismarckism’ is not enough, its institutions of rule being inextricably tied and subordinated to the relationships between the national bourgeoisie and the foreign classes. It is for that reason that the bosses’ particular interests can never become the general interests of the nation. Marxists take heed of the pecularities of national development, but we explain these by analyzing the relationship and the shifts in its social and political structure, always subjected to the influence of foreign classes and powers.

By making a hotch-potch out of Gramsci’s postulates, be them mistaken or not, they seek to explain away the nature of both the national State and the political régime isolating them from the key influence of imperialism. They try to portray an infantile and deeply reactionary picture that a ’new bloc of power’ and a ’project for an independent, democratic and even socialist (!) country might be created without waging a revolutionary struggle against imperialism.

Colonized ’progressives’

One should just look behind the facade of these representatives of ’Keynesian democracy’ (who seek to eliminate unemployment, poverty and all the calamities affecting the exploited nation by means of a petition and a good legislation), to uncover the democratic servants of capital and imperialism, the theoreticians of class collaboration, the humanist imbued with a bourgeois spirit, one that gets good money and reputation from their quangos, and also the bureacrat living off State favors.

It is no coincidence that the progressives in our country extoll the virtues of ’US democracy’, as center left deputy Elisa Carrió, who portrayed it as an example of transparency and decency. They also praise European democracy, France’s in particular, the same that bombarded Iraq and Serbia, and is responsible for the genocide in Africa. Bernard Cassen, Le Monde Diplomatique editor-in-chief, claimed on local television soon after his visit to Argentina, that contrary to the USA, France has no tariff protection system at all, except for its cultural industry. But both the local chief of Le Monde Diplomatique, and their partners from the CTA have remained silent about France’s agricultural policies, not to mention the French lobby in defense of the monopolic positions of its service companies in the country, or else Renault’s dirty businesses. Does such view respond to the need not to divide ’the anti-American front’ or to the Maoist theory of ’principal and secondary contradictions’? When the center left speaks out against corruption and bribes, they should consider the case of arms trafficking, in which an entire sector of the State, Fabricaciones Militares, army units, etc., was used to produce weapons and smuggle them into Croatia (a NATO-controlled zone), and thus counted with the go-ahead of imperialism. It was the complicity and impunity of the ’carnal relationship’ with the USA that encouraged the government to do this. Other notorious cases of dirty business and money laundering scandals (Moneta-Citibank; IBM-Banco Nación) show that corruption is inherent to the parasitic characteristics of a declining world capitalism, and that imperialist monopolies and governments alike use it as a tool for domination and looting.

Those that yesterday praised bourgeois nationalism as the solution to free our ’grand country’ (like most leaders of the CTA), today want ’a social democracy’ subordinated to imperialism. And all this under the banner of ’globalization’, the ’new thought’ and the ’antineoliberal bloc’. It is evident that the bourgeoisie holds sway over the petty bourgeoisie and the labor movement leaderships alike, which have no alternative to defeat and submission.

The solution to all problems is in the hands of ... the bourgeois state

Both the trade union federation CTA and Verbitsky have been raising the need of an ’employment and training insurance’ scheme. This project has been presented not as a temporary relief to strengthen the working class in order to achieve the sharing out of working hours between employed and unemployed workers, but rather as a universal panacea, and even as a measure for reviving the capitalist economy! They claim a Keynesian budget would kickstart the economy. It is a program designed to help the government put an end to recession. They consider that ’assigning 11.4 billion pesos for consumption shoud lead to the recovery of demand, multiplying two and a half times that amount.’ The companies’ revenues would lead to new wage levels and increased demand, creating a new consumption level worth 28 billion which would sustain the cycle of production and consumption. This way, there would be a ’productive shock’ which would revive the country’s industry and growth. Horacio Verbitsky explained this a few days ago. Rejecting the official proposal, he claimed that ’it eliminates the items of income redistribution, the expansion of domestic demand and the relaunching of a productive and reindustrializing strategy and of regional balance, which could be provided for by the Employment and Training Insurance, that would work as a minimum wage for the whole economy, bringing about a ’consumption shock’11.

This train of thought is fallacious. There is no way to be sure that the companies’ extra income should be reinvested in new wages and fresh capital goods. This depends on the capitalists’ profit rate, the level of labor productivity, the international and national interest rate that would render productive investment more or less profitable. When in the 90s the country grew at an annual rate of 6 or 7%, national capitalists sold their companies but they did not reinvest their capital here. The multinationals deposited more than 70% of their earnings overseas, they did not reinvest them in the country, thus worsening deficit of the balance of payment. But this is not the most important point, after all, nobody can complain if those who seek a ’humanized’ capitalism try to contribute to the better functioning of capitalism itself and good businesses for capitalists.

Verbitsky enthusiastically considers that funds from the following can be used for the CTA’s insurance:

1 - ’the 2.6 billion that are being used for family benefits and other assistance programs’. With this measure, Verbitsky does the same as the government, taking funds from one program to use for another, this way creating greater division within the working class.

2 - ’this rise in demand of around 7 percent would make the amount of tax income increase by about 800 million per each point. Only through this revival by means of more consumption, can the current tax system become more productive. The additional amount of tax revenues would be 5.6 billion.’

However, when demand increased along with the GDP in the 90s, the additional tax revenues never rose in that proportion. Also, these are funds that would presumably (doubtfully) be obtained after a period of boom. Meanwhile Verbitsky can get a loan from the private pension funds or else negotiate with the World bank in order to finance the project.

3 - ’Another 1.5 billion could be obtained if the employers’ contributions be reinstated in the case of big taxpayers such as the service sector, non-export oriented and therefore not subject to international competition, like the privatized companies, banks and hypermarkets’. But with this measure he is just walking in the footsteps of Menem’s Ministers Cavallo and Roque Fernández. When service companies and banks had not yet been exempted from paying employers contributions, they nevertheless obtained superprofits out of charging the world’s highest tariffs , royalties and captive markets, increasing their earnings by the embezzlement of the people’s savings. Banks today enjoy tax breaks on the sale-purchase of stocks and bonds and foreign loans. This can only lead to caving in to the privatization rip-off, without raising the need for the expropriation of these companies under workers’ control, refusing to demande a progressive taxation on the rich.

4 - ’the much announced elimination of income tax exemptions, for which the Congress has now granted the Executive Power its faculties, would increase tax revenues by at least 10 billion." Although no one can be certain this amount would ever be collected, companies will most probably find ways to make consumers pay for the loss of this privilege.

5 - ’Lastly, the reassignment of the National Public Sector’s current social schemes would contribute with another 3.7 billion’. That is to say, take the funds from one office to another, although in the process some specific groups, like the disabled, can lose benefits.
Verbitsky considers the non-payment of foreign debt an expression of the "populist right, the Paleo-left and the Roman Catholic Church", and tries to demonstrate that it is possible to eliminate unemployment, start a process of industrialization and redistribute the country’s wealth without going against imperialism’s interests or capitalist property in the least. How to save farmers and shopkeepers from economic ruin, how to grant them cheap loans, how to reduce the cost of public services for consumption and production, how to prevent the flight of capitals and customs maneuvers, how to prevent a group of parasites from destabilizing our currency by one single transaction throwing millions into poverty, how to carry out a plan of public works to eliminate unemployment, how to prevent the dictatorship of a handful of corporations that control half of the country’s economy, is a complete and insurmountable mystery to these progressives.

A process of genuine industrialization requires, in the first place, the control of the key levers of the country’s economy, its raw materials, oil, energy, transportation, iron and steel industry and telecommunications at least. Only under these conditions can a rational plan of production and public works for the benefit of the exploited majority be carried out, creating jobs for hundreds of thousands of unemployed workers. But today these companies are in the hands of a small group of capitalists that accumulate extraordinary profits, take their capital abroad and generate a chronic deficit in the country’s balance of payment, blocking the road to an authentic industrialization. But the center left deems expropriation a curse, and so they can propose no other solution than to ’regulate’ the privatized companies and reinstate the employers’ contributions. And this is how they plan to industrialize the country! They propose the same solution for the flight of capitals and the possibility of financial capital destabilizing the local currency, instantly ruining millions of workers and consumers. Corruption, money laundering and bribery, have all been the tricks that big banking and the local bourgeoisie have resorted to take control of the country’s resources. Citibank has been caught red-handed in a laundering operation worth 4.5 billion dollars. Tax avoidance stands around 14 billion yearly. International private loans have been a good way to bring capital back into the country, avoiding taxation in the process, an opportunity to get juicy profits out of a differential interest rate. The AFJPs (the private pension funds), controlled by a small number of banks, blackmail the nation with usurious rates using the people’s retirement funds. In other words, large banking has seized the nation by the neck, and our progressives demand... they should be controlled. Quite otherwise, the nationalization of banking under workers’ control would do away with those calamities, and serve as a means for supporting small businesses through cheap loans and a production plan nationwide. Horacio Verbitsky has ended with a conundrum, unable to explain where the funds for his plan will come from, although he forgets to mention that the State annually spends above 11 billion to pay back the interests of the foreign debt. Not surprisingly, he brands it ’public’, no matter the negotiations take place in Manhattan’s plush offices.

In other words, the progressives’ immagination comes up against the wall of private property and imperialist domination. They have been insisting on a campaing to lobby the the corrupt Parliament into passing their welfare scheme. The Regulation school -of which our native progressives are extremely fond of -misused and distorted Marxist concepts, postulating that since capitalism’s laws are inexorable and cannot be overcome, the class struggle would play a major role, not in overthrowing the capitalist régime, of course, but in ameliorating its hardships, holding back its more destructive tendencies, and avoiding the crises and disproportionalities between supply and demand in the process. The CTA and Verbitsky do not even go that far, because the class struggle is alien to them. They prefer to canvass for a referendum and lobby the legislators. Anyway, the union federation CTA and its chairman De Gennaro would most unlikely put an end to ’neoliberalism’ and build ’a new Argentina’, since they were unable to defend the workers from the wage cut implemented by De la Rua’s beleaguered government.

Conclusion

Only by going against capital’s property rights, (the expropriation of large corporations, the nationalization of banking under workers’ control, etc.), breaking away with imperialism are we going to implement a plan in tune with the needs of the people, the producers and consumers, doing away with the anarchy of production based on capitalist greed. This program for the benefit of the exploited masses could be achieved by means of a workers’ and socialist revolution alone, with a workers’ and people’s government. Such government, based on direct democracy and the self-government of the masses will bring millions of citizens into the administration of the country. On the contrary, bourgeois democracy (not to mention Latin America’s) to which the progressives render a religious respect, systematically excludes them from decision-taking on political, economic and social issues. Thus, a workers’ republic will prove to be a thousand times more democratic than the most perfect of bourgeois democracies.

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Footnotes

1 ’From this follows the importance of the participative way that I’m referring to, which, among other things, could give democratic direction to the latent and open revolts and social conflicts which the situation makes unavoidable, which threaten to become increasingly radicalized and always turn out to be breeding grounds for self-proclaimed saviors of the country’, José Nun, ’Democracia, ¿gobierno del pueblo o gobierno de los políticos?’(Democracy: government of the people or government of politicians?), October 2000.

2 Guillermo O’ Donnel, ’El capital financiero y el futuro de la Argentina.’(Financial capital and the future of Argentina)

3 For an analysis of the different types of democratic transitions see ’Transiciones a la democracia: un instrumento del imperialismo norteamericano para administrar el declive de su hegemonía’ (Democratic transitions: an instrument of US imperialism for administrating the decine of its hegemony), Estrategia Internacional N°16.

4 Eduardo Basualdo, ’Acerca de la naturaleza de la deuda externa’ (On the nature of foreign debt).

5 See their proposal for political reform in Argentinean newspaper Página/12, 15-10-2000.

6 Max Weber, ’Parlamento y gobierno en una Alemania reconstuida’ (Parliament and government in a reconstructed Germany), included in some editions of ’Economía y Sociedad’ (Economy and Society).

7 ibid.

8 According to Claudio Lozano, chair of the CTA’s ’Instituto de Estudios y Formación’(Institute of Studies and Training), the ’theoretical universe’ bequeathed by Marx, erroneously led to ’the idea of democracy as mere institutional fiction or formality’. For the most complete misrepresentation of Marx’s legacy and also its reformist and socialdemocratic interpretation see ’Democracia, estado y desigualdad. Consideraciones teóricas. Segundo Encuentro Nacional por un nuevo pensamiento (Democracy, State and inequality. Theoretical considerations), Second national meeting for new thought, p. 15.

9 In relation to the political regimes of semicolonial countries, Trotsky claimed that ’in industrially backward countries, foreign capital plays a decisive role. This explains the relative weakness of the national bourgeoisie compared to the country’s proletariat. This leads to special characteristics of State power. The government wavers between foreign capital and national, between the relatively weak national bourgeoisie and the relatively powerful proletariat. This gives the government a sui generis Bonapartist character, of a particular nature... In fact, it can govern either becoming the instrument of foreign capital and subjecting the proletariat under a police dictatorship, or maneuvering with the proletariat, even making concessions, in this way achieving certain freedom from foreign capital’. León Trotsky, 1938. In ’Escritos Latinoamericanos (Latin American Writings), Ediciones Ceip.

10 Gramsci was correctly opposed to Stalinism’s ultra-leftist policies of the period between 1928 and 1935, appealing to the united front policies inspired by the Third and Fourth congresses of the Communist International. But he was unable to understand the struggle of the left opposition against the ’theory of socialism in one country’ formulated by Stalin, whom he supported by resorting to the concept of national hegemony; therefore, the basis for his opposition to Trotsky was the need for an alliance between workers and peasants (that Trotsky denied less than anyone else) without understanding the limits of the revolution, and of the alliance itself in backward Russia compared to world capitalism. Gramsci claimed that ’... the international situation should be considered in its national aspect. The ’national’ correlation is the result of an ’original’, unique combination, (to a certain extent) that should be understood and conceived in this originality and uniqueness in order to rule and lead. It is true that the development tends toward internationalism, but the starting point is a ’national’ one, and it is in this starting point that we must position ourselves. But the perspective is international and cannot be otherwise. Therefore we must study the combination of national social forces that the international class will have to lead and develop according to the international perspective and guidelines. The leading class is only such if it appraises this combination exactly, of which this class is itself a component and precisely as such can give the movement a certain orientation according to certain perspectives. This is the heart, to my understanding, of the fundamental disagreement between Leone Davidovici (Trotsky) and Bessarione (Stalin) as a representative of the majority. The accusations of nationalism make no sense if they refer to the heart of the question. If one studies the effort made from 1902 up to 1917 by the majority, it is clear that their originality consists in purifying internationalism of all vague and purely ideological (in the pejorative sense) elements in order to give it a realistic political content’. Antonio Gramsci, ’Notas sobre la política y el Estado moderno’(Notes on modern politics and State).

11 Horacio Verbitsky, ’Daño moral’, Página/12, 8-4-01.