Cover image for The Politics of National Capitalism: Peronism and the Argentine Bourgeoisie, 1946–1976 By James P. Brennan and Marcelo Rougier

The Politics of National Capitalism

Peronism and the Argentine Bourgeoisie, 1946–1976

James P. Brennan, and Marcelo Rougier


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The Politics of National Capitalism

Peronism and the Argentine Bourgeoisie, 1946–1976

James P. Brennan, and Marcelo Rougier

“This is an excellent, challenging volume by two distinguished scholars. It addresses perennial, pressing issues in contemporary Argentinean development—the formation and stance of the national bourgeoisie. Central to this story is Peronism, a subject that the authors have made their own. The book provides a timely revision of a period that, although once much studied, has been neglected in recent years. It also offers insights into contemporary post–Second World War industrialization projects essayed elsewhere in Latin America and formulates a distinct framework—the new business history—that is relevant for the analysis of peripheral capitalist classes elsewhere in a rapidly globalizing world economy.”


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In mid-twentieth-century Latin America there was a strong consensus between Left and Right—Communists working under the directives of the Third International, nationalists within the military interested in fostering industrialization, and populists—about the need to break away from the colonial legacies of the past and to escape from the constraints of the international capitalist system. Even though they disagreed about the desired end state, Argentines of all political stripes could agree on the need for economic independence and national sovereignty, which would be brought about through the efforts of a national bourgeoisie.

James Brennan and Marcelo Rougier aim to provide a political history of this national bourgeoisie in this book. Deploying an eclectic methodology combining aspects of the “new institutionalism,” the “new economic history,” Marxist political economy, and deep research in numerous, rarely consulted archives into what they dub the “new business history,” the authors offer the first thorough, empirically based history of the national bourgeoisie’s peak association, the Confederación General Económica (CGE), and of the Argentine bourgeoisie’s relationship with the state.

They also investigate the relationship of the bourgeoisie to Perón and the Peronist movement by studying the history of one industrial sector, the metalworking industry, and two regional economies—one primarily industrial, Córdoba, and another mostly agrarian, Chaco—with some attention to a third, Tucumán, a cane-cultivating and sugar-refining region sharing some features of both. While spanning three decades, the book concentrates most on the years of Peronist government, 1946–55 and 1973–76.

“This is an excellent, challenging volume by two distinguished scholars. It addresses perennial, pressing issues in contemporary Argentinean development—the formation and stance of the national bourgeoisie. Central to this story is Peronism, a subject that the authors have made their own. The book provides a timely revision of a period that, although once much studied, has been neglected in recent years. It also offers insights into contemporary post–Second World War industrialization projects essayed elsewhere in Latin America and formulates a distinct framework—the new business history—that is relevant for the analysis of peripheral capitalist classes elsewhere in a rapidly globalizing world economy.”
“Brennan and Rougier have written a masterful account of state-business relations during a watershed moment in Argentinean history. The Politics of National Capitalism follows in the rich tradition of political economy studies, but breathes new life into the field’s central concerns through its innovative research and scope of analysis. Rather than focusing on dominant agriculturalists and industrialists, as has often been the norm, this book looks more broadly at the business community, including neglected provincial sectors and commercial enterprises. Quantitative treatments of public policy are combined with insightful profiles of major trade groups and business leaders. This work is, quite simply, required reading for all those interested in the connections between capitalist economics and national development in Latin America.”
“This book is a masterpiece that should be read by those interested in the history of Argentina and in real political economy with a historical perspective.”
“Future scholars will find it difficult to analyze the political and economic world of Argentina in the conflictive thirty years between 1946 and 1976 without consulting this book.”

James P. Brennan is Associate Professor of History at the University of California, Riverside. He translated Luis Alberto Romero’s History of Argentina in the Twentieth Century (Penn State, 2002), which was a History Book Club selection.

Marcelo Rougier is Professor of History at the Universidad de Buenos Aires.




1. The Political Economy of Populist Argentina, 1943–1976

2. Industrialists and Bolicheros in the Origins of Peronism

3. Peronist Economic and Industrial Policy, 1944–1955

4. Industrial Support for Perón: The Cámara Argentina de Industrias Metalúrgicas

5. The Confederación General Económica and the “Organized Community”

6. The “National Bourgeoisie” in Opposition: From the Revolución Libertadora to the Revolución Argentina

7. Conflict and Crisis in the Metalworking Industries

8. Peronist Economic and Industrial Policies in the 1970s

9. The National Bourgeoisie in Power: Provincial Dynamics and the Fall of National Capitalism

Final Reflections



Chapter 1

The Political Economy of Populist Argentina, 1943–1976

The Perón Years (1943–1955)

To better orient the reader to the story of the “national bourgeoisie,” some aspects of Argentina’s recent political economy need to be understood. During the first half of the twentieth century, Argentina’s economic development resembled that of the rest of Latin America in some ways and differed in a number of others. Like that of other countries in the region, its economy depended heavily on the export of primary commodities and foreign investment. Its meat and grain exports were among the most profitable in Latin America and the engine of Latin America’s most successful export economy until the terms of trade began to turn decisively against its traditional commodities in the early 1950s. Capital flows, as well as flows of immigrants, favored the country through the 1930s, though it was during the Depression that the first serious signs of future problems and sluggish growth appeared. The landowning class responded to the crisis by strengthening bilateral trade relations with the British, a policy notoriously incarnated in the 1933 Roca-Runciman Pact. Argentine governments of the 1930s, especially that of General Agustín P. Justo (1932–38), complemented bilateralism with an unprecedented move to state intervention in the economy. In 1931, Argentina established exchange controls. The state’s control of foreign exchange would become an increasingly important instrument of economic policy. Greater state involvement in the economy remained the hallmark of economic policy through the decade, with the establishment of the Banco Central in 1935 to regulate the money supply and credit and various government agencies such as the National Grain Board and the National Meat Board to control the supply and to regulate the prices of agricultural commodities. The move toward greater state involvement in the economy was not uniquely Argentine, most governments in Latin America followed a similar path. What distinguished Argentina from the rest of the region was the greater resilience of its export sector and the ability of the state to allocate resources in what was a prosperous economy with high rates of capital accumulation, savings, and investment. The precocious development of industry in Argentina was only one of many indicators of the country’s privileged position in the region.

Historians have traditionally regarded the military coup d’état of June 1943 as a turning point in modern Argentine history. The military government that would rule Argentina for the next two and a half years undoubtedly oversaw a number of important changes in economic policy and social relations. The changes would deepen during the subsequent presidency of the individual who had emerged as a leading figure in the military government, Colonel Juan Domingo Perón. The era of popular nationalism, trade union power, the rise of the “national bourgeoisie,” and state-supported industrialization is traced to the war years and its immediate aftermath. Yet there is a growing consensus among historians that the rupture with the past was less dramatic than once thought, that the military junta and then the Peronist government intensified rather than caused these changes, and that Perón in general represented a figure of continuity with the Argentine past more than had been believed. Certainly in terms of economic policy, Perón began his political career attempting to adapt established practices and policies to the new context of the postwar era and the political movement he was building. Argentina found itself in an unusually favorable position at the end of the war. Its wartime surpluses allowed it to play the role of international creditor, and it enjoyed favorable terms of trade for its traditional exports. Perón’s government used wartime reserves to pay off overseas debt, to nationalize foreign-owned enterprises, and to subsidize industry and consumer spending. The establishment of a state agency, the Instituto Argentino para la Promoción del Intercambio (IAPI), to control foreign trade in the country’s export commodities allowed the government to appropriate and to distribute a large share of foreign exchange, even in years of overall negative trade balances. The IAPI also controlled imports, allowing the government to oversee and regulate which goods would receive preference in the local market.

Peronist economic policy was driven by Perón’s concerns to “harmonize” labor-capital relations and ensure social peace. His concept of the “organized community” and even his discourse of industrialization were influenced more by social concerns than by strictly economic ones. Even before his election, Perón and indeed others in the military government feared the disruptions that would result from the end of the war, especially the negative effects on Argentine industry due to renewed foreign competition, perhaps leading to rising unemployment and social unrest. Industrial growth during the war in both the traditional food-processing sectors and newer dynamic industries, such as textiles and metalworking, had been significant. In 1945, for the first time in Argentina’s history, industry accounted for a greater share of the gross domestic product than agriculture. Perón’s establishment of the Consejo Nacional de Posguerra was intended to coordinate planning for a transition from the wartime bonanza to the postwar adjustments. His economic policies sought above all to maintain the balance of forces created by the war, with industry given access to state-subsidized credit and the working class awarded a steady increase in its share of national income, which also benefited industry because it led to an expanding consumer market. Wages and salaries accounted for 37 percent of national income in 1946 and rose to 50 percent by 1950, a major reason for the growth of industry in these years.

To protect industry as a source of wealth and employment and to placate industrialists as a powerful new interest group, Perón continued and extended the policies begun in the 1930s: tariff protection, exchange controls, and import licenses favoring the importation of capital goods and inputs needed by industry. All these policies combined with the expanding consumer market benefited both established firms and new emerging ones. Nationalization of the banking system in 1946 meant that the central government, through the Banco Central, now wielded an enormous influence over the country’s economy. The money supply was not tied to the country’s reserves and the gold standard but to the government’s discretion. After experiencing a 20 percent growth between 1940 and 1945, bank loans increased fivefold between 1945 and 1948, with industry the major beneficiary. Cheap credit allowed business to compensate for rising wages. The combination of state protection, increased demand, and abundant credit permitted long-established firms such as SIAM–Di Tella, then Latin America’s largest metalworking company, to grow and to diversify and numerous new firms and industrialists to emerge. Among the latter were the founders of some of the future conglomerates that would later dominate the Argentine economy, such as Pérez Companc and Techint, founded by Agostino Rocca in 1946, and the construction firms of Franco and Antonio Macri, who established their fortune by participating in the publichousing projects financed by the Plan Eva Perón de Viviendas in 1948.

One of the regime’s stated intentions was indeed to create a “national bourgeoisie” capable of leading the country’s industrialization program. Nonetheless, Perón was well aware of the limitations of local capitalists in overseeing an economic transformation of the country and therefore increased the state’s role as an economic actor. Initially, Perón sought to establish mixed enterprises, reserving a space for the private sector. Nonetheless, faced with the slight predisposition of business to assume such risks, he expanded state intervention. The nationalization of the railroads and public services alone meant greater state involvement in the country’s economic life. The state also became an industrial entrepreneur, expanding military-run armaments factories and assuming control of a cluster of former German-owned firms expropriated during the war and administering them collectively through the Dirección Nacional de Industrias del Estado. Greater regulatory powers and especially its control of credit also enormously enhanced the public sector’s role in the economy. The increased presence of the state in the economy also introduced a new economic actor, the bureaucracies that administered the new public companies. Labor, business, and the various government bureaucracies now wielded the decisive influence on economic policy and pressured the executive in corporatist fashion rather than through the political parties in a political system that was moving inexorably toward “Peronization” and one-party rule.

By the time of Perón’s second administration, trade deficits (the balance of trade would be positive on only four occasions between 1949 and 1962) and rising inflation determined a change in economic policy. This was seen in everything from the terms of Perón’s Second Five-Year Plan, with its greater emphasis on agriculture, to the 1955 Productivity Congress, with its recommendations for weakening trade union power on the shop floor, discouraging absenteeism, and introducing modern managerial practices in Argentine industry. It was also seen in Perón’s abandonment of a discursive economic nationalism and his courting of foreign investment, most notably in the oil and automobile industries. The astounding annual growth rates of 8 percent of the first years of Perón’s government were followed by stagnation and even negative growth. Declining prices for Argentina’s agricultural exports had baleful effects on the entire economic scaffolding Perón had constructed during the first years of his government. Among the deleterious consequences was the increasing inability to import the capital goods necessary for the country to diversify its industrial base by shifting from consumer goods/light industry to heavy industry. Industry ceased to be favored during Perón’s second administration. A greater share of credit went to the agricultural sector, and the projects of the Second Five-Year Plan gave priority to technical improvements in the countryside rather than the modernization of technology and productive processes in Argentina’s factories. Indeed, the 1955 Productivity Congress was called belatedly in 1955 because of the failure of the Second Five-Year Plan to address the problem of Argentine industry.

Economic restructuring was nonetheless difficult for a government that had made social peace its highest priority and depended on the working class for political support. Perón’s government refused to follow policies that would depress domestic consumption for the sake of capital accumulation. The campaign for increased productivity and even the greater receptiveness to foreign investment were tepid measures adopted to avoid the hard choices between a high-inflation populist economy and more “liberal” measures that might increase efficiency but also redistribute income away from the working class and the industrial and commercial sectors that depended on the domestic market. Perón seemed to be setting a different economic course when he replaced the industrialist and economic czar Miguel Miranda with the orthodox economist Alfredo Gómez Morales in 1949, but the margin for tinkering with the economic policies that the Perónist state had been following was small. This basic dilemma combined with a severe drought and a series of disastrous harvests in the early 1950s launched Argentina into a serious economic crisis in the final years of Perón’s first administration. These years also witnessed the appearance of what would become one of the hallmarks of the Argentine economy until the 1990s: structural inflation. Argentina went from being a country with historically very conservative fiscal policies to one in which monetary emission covered government deficits. Perón’s wage and credit policies naturally exacerbated the inflationary tendencies. Nonetheless, though inflation was a problem, the government demonstrated more fiscal restraint in the second administration and inflation was largely under control by 1954. The government reduced spending on social programs and military expenditures and cut infrastructure by some 35 percent between 1948 and 1955. Trade balances were positive for both 1953 and 1954. In general, Perón was far more effective in adapting economic policy to new circumstances than has been recognized. In 1955, his last year of government, the economy was growing at a 7 percent annual rate, and, though serious problems in the economy remained, most prognoses were guardedly optimistic.

Peronist economic policies were not as aberrant as many have contended. The decision to use wartime reserves on the nationalization of the railroads and other foreign-owned businesses and repatriation of the external debt had much to do with the freezing of Argentina’s reserves as inconvertible sterling deposits in British banks. Economic “autarky” was also at least partly the result of U.S. agricultural policies that undermined Argentina’s traditional agricultural exports, especially the continuing restrictions on Argentine farm products in the U.S. market and the decision to forbid recipients of foreign aid under the Marshall Plan to purchase Argentine goods. Industrialization and autarky thus responded in part to constraints imposed by the international economy and U.S. policy. This is not to say that mistakes were not made in the Peronist years. The greatest failure was not devising a coherent industrialization strategy beyond the largely ineffectual two Five-Year plans. Credit was dispensed by the Banco Industrial without any consistent economic criteria in terms of long-range planning, squandering precious resources, and depriving the state of a powerful instrument with which to plan the economy at a time when real possibilities for industrialization existed in the country.

Nonetheless, it is highly doubtful that either the failure to use Argentina’s accumulated reserves of foreign exchange during the first several years of economic bonanza or the Peronist government’s spendthrift ways explain the failure of the country to develop heavy industry. The capital goods required to build such industries were scarce in the early postwar years, and the one country that could supply them, the United States, sought to minimize their export to Argentina. Nor was entrepreneurial spirit or technological innovation lacking among industrialists, as was demonstrated by the key industry in these years, metalworking. Argentine industry adapted to the conditions and opportunities offered by a political economy that was the result of a long and complex history and a constellation of social forces. If it is fair to say that some of the policies adopted were ultimately a hindrance to sustained industrial growth, it must also be acknowledged that others were the result of reasonable decisions adopted in response to prevailing conditions, not simply of government myopia or opportunism by the business sector, much less perfidy on Perón’s part.

Interest Groups: Business, Labor, and the State

Though Peró;n did not destroy the Argentine economy as many of his detractors have claimed, he set the stage for a society that was highly polarized and found itself unable to develop a coherent economic strategy to cope with changes in the world economy and Argentina’s place in it over the course of the next two decades. The Peronist governments of the 1940s and 1950s had profoundly shaped the contours of the Argentine political economy in manifold ways. Perhaps nowhere was their influence more important than in the establishment of corporative interests that would struggle for their share of national income and influence over national economic policy until the 1976 military coup and subsequent government of the “Proceso” eviscerated them and created the rudiments of a new economy based on the financial sector and powerful holding companies (grupos económicos in the Argentine political vernacular). Among the propertied classes, the 1976–83 military government consolidated the economic power of groups that spurned the old business organizations that had continuously pressured and more than once destabilized national governments. Nonetheless, during the Peronist governments of the 1940s and 1950s and particularly in the two decades following Perón’s fall from power in 1955, Argentina’s political economy revolved around the struggle between diverse business interests, with the country’s powerful trade union movement also exercising a decisive and, in the Latin American context, exceptional influence.

The business groups were complex in their composition and behavior, and their interests shifted over time, making here only generalizations possible. On the one hand, there were the old export sectors tied to pampean agriculture, increasingly grains because income redistribution had led to a rise in the domestic consumption of meat and dwindling surpluses for export. The Sociedad Rural Argentina (Argentine Rural Society, or SRA) served as the representative of the estancieros and indirectly for the exporting firms and diverse other economic interests tied to so-called economic liberalism. Those advocating greater state intervention in the economy were the industrialists, fragmented and lacking an institutional spokesperson for most of the Peronist period. Industrialists’ traditional peak association, the Unión Industrial Argentina (Argentine Industrial Union, or UIA), had been interdicted by Perón in 1946, and an effective replacement never emerged. During the Peronist governments, industry lobbied the state largely through industrial associations representing specific sectors, of which the metalworking industry was the most important, as well as through individuals who enjoyed personal influence with Perón. After Perón’s fall from power, the UIA gradually came to serve again as a kind of spokesperson for industry. Finally, there were the diverse regional economies represented by the Confederación General Económica (General Economic Confederation, or CGE). Perón had sought to promote the CGE as an umbrella organization for all the country’s business interests, but it often only poorly performed that function. It remained throughout its history a rather peculiar organization led by a coterie of one-time bolicheros (small businessmen) who had used their influence as representatives of the CGE and personal contacts with Perón to build large economic empires. The emblematic figure among them was José Ber Gelbard, originally a merchant from Catamarca province who would be the longtime president of the CGE and for a time minister of the economy during the restored Perónist government of the early 1970s. Gelbard and other members of the CGE leadership presided over an organization that represented, often at cross-purposes, Gelbard and his circle, certain regional economies, and small businessmen throughout the country, though one encompassing an estimated 1 million members, giving it by far the largest membership of any of the country’s business peak organizations.

A well-organized trade union movement competed and sometimes allied itself with an equally well-organized, if fragmented and fractious, business sector during the period from 1955 to 1976. Argentina’s political economy followed a pattern in these years: governments that favored the domestic market, industry, and certain regional economies alternated with “liberal” governments that favored capital accumulation through peso devaluation, increased exports, and income redistribution to agriculture and related sectors of the economy. Much of the volatility of Argentine politics in these years boiled down to a struggle between corporative groups with conflicting economic interests, with the military intervening repeatedly to break stalemates and restore equilibrium. Such volatility also was reinforced by economic cycles that imposed severe restrictions in the balance of payments. Diverse economic interests advanced their agendas either directly through presidents, government ministries, and state agencies or by cultivating support within the armed forces. The military was not a monolithic institution but was rent with factions, divided among nationalist and so-called liberal groups that reflected the divisions of the broader political economy. The party system, which had grown precociously in the first decades of the century and atrophied since the 1930s, proved utterly incapable of channeling these diverse interests in a political system that lacked credibility and was subjected to repeated military coups. Business groups, the trade union movement, and the armed forces were thus the key players in advancing economic programs and implementing policy during these twenty years.

The fall of the Peronist regime in 1955 marked Argentina’s reentry into the global capitalist economy. Though Perón was already headed in this direction, the social base of his movement would have made the process much slower had he remained in power. Under General Pedro Aramburu’s government (1955–58), Argentina rather quickly negotiated entry into the International Monetary Fund and the World Bank and became a recipient of loans. Under the government of Arturo Frondizi (1958–62), after a brief flirtation with a return to populist economics, Argentina accepted in principle the prescriptions of the international lending agencies and the U.S. government but did little to implement them, continuing to resort routinely to the Banco Central to cover fiscal deficits and failing to adopt a “rationalization” of the public sector, especially in the provinces. The contradictions of the Frondizi government set the stage for the subsequent polarization of the Argentine political economy. Though Argentina’s foreign debt remained small through the early 1970s and the international financial community was not yet the disciplinarian of the economy it would later become, there was great concern on the part of agro-export interests with following the policies demanded by the international lending agencies: fiscal restraint, minimal restrictions on profit remittances by foreign companies (mainly multinationals operating in Argentina), a deregulated banking system, and other similarly “liberal” policies. The national-capitalist model advocated, conversely, an expanding domestic market and monetary supply, protection for national industry, government regulation of private enterprise, and greater restrictions on foreign business. Though Perón’s change of course in economic policy in the final years of his government appeared in many ways to have renounced the project of a national capitalism, once out of power and proscribed the Peronist movement again took up the banner of economic nationalism. The CGE did not formally align itself with the Peronist movement, but it increasingly found points of agreement, and the CGE and the Peronist Confederación General del Trabajo (General Labor Confederation, or CGT), on a number of occasions issued joint documents and common economic programs.

The country’s business groups remained greatly divided through the 1960s. In 1958, the agro-export interests embraced a radically liberal program and established the Asociación Coordinadora de Instituciones Empresarias Libres (ACIEL). In 1967, with the support of Juan Carlos Onganía’s minister of the economy, Adalbert Kreiger Vasena, the country’s largest industries, including multinationals, withdrew from active participation in the UIA and formed the Consejo Empresario Argentino. In the meantime, the UIA, with its stronghold in the nationally owned firms of greater Buenos Aires, began gradually to abandon liberal positions and move toward ones more akin to the economic nationalism espoused by the CGE. The large firms represented by the UIA also benefited from the deepening of the domestic market, virtually the only one they sold to, and were suspicious of the competition from the foreign companies that had invested massively during the Frondizi government. Given their history of enmity and mutual suspicion, the two organizations remained separate and their relations frosty until the early 1970s. Nonetheless, along with the CGE, the UIA began to criticize—with increasing vehemence—the “denationalization” of Argentine industry, especially during the Onganía dictatorship. By the early 1970s, its public proclamations and publications revealed positions at odds with the prevailing economic philosophy and economic program, demanding greater state intervention to regulate foreign investment more closely or to foment the latter under conditions that required foreign companies to reinvest in the national economy. In 1972, the UIA joined the CGE in opposing a treaty signed by the Lanusse government, establishing free trade between Argentina and Paraguay, a treaty supported by the ACIEL afraid that it would open up the country to contraband.

The diverse business organizations and their disputes were simply the most visible manifestation of struggles for economic advantage and sometimes for mere survival that went on among sectors of the Argentine bourgeoisie at the national, the provincial, and even the local level. These struggles were not unique to Argentina but do seem to have been particularly intense there. Argentina’s history—the successful integration into the global economy that took place in the final decades of the nineteenth century and early decades of the twentieth century and then the nationalist capitalist model adopted during the Peronist years—had produced diverse interests. Its precocious industrialization and the success of the agro-export model thus arguably made these differences deeper and more consequential than elsewhere in the region. What certainly does appear sui generis was not the degree to which various economic sectors were organized but the degree to which they were free of state control and capable of advancing their interests collectively through institutional means, both with the political leadership (civilian or military) and with the state bureaucracies, setting the stage for the polarization and stalemate that would characterize Argentina from 1955 to 1976.

Credit Policies

How did the Argentine economy work during these years and whom did it benefit? There are many ways to analyze any economy’s workings, but among the most useful, in terms of judging its essential character and effectiveness, is credit. Among business’s concerns, perhaps none is more crucial than access to capital, and few are as illuminating for understanding political economy as the way in which firms acquire and use capital. The Argentina banking system was revamped in early 1946. The Banco Central was nationalized by the military regime shortly before Perón assumed power. Deposits were also nationalized. This meant that private banks lost their autonomy and became mandatories of the bank. In due course, monetary policies also changed, and old gold-standard principles regarding monetary emission were abandoned as well. The financial system was reformed again in October 1957, when the Aramburu government undertook a banking reform whereby the Banco Central recovered most of its old autonomy. Instead of returning to the mixed bank it had been in the 1930s, however, it remained a public institution, though deposits were restored to both state and private banks. New policies in private banks and the recent privatization/liquidation of a number of important public banks such as the Banco Industrial (renamed the Banco Nacional de Desarrollo or BANADE in the early 1970s) have made it possible for researchers, for the most part economic historians, to gain access to these banks’ archives for the first time. This new research has provided an understanding of the inner workings of the economy with a degree of precision that is unprecedented in historical scholarship. Collectively, this new research has led to a deeper understanding of the Argentine political economy during the years 1943–76.

Among the myths that have been debunked by this new research is that Perón was hostile to the country’s established economic powers, especially big industry. The country’s largest industrial firms received the lion’s share of public credit in these years, partly because loans were granted on the basis of fixed collateral and partly because of political considerations—the influence that these companies were able to exert on the government and state bureaucracies and Perón’s overriding concern to avoid labor disputes and social unrest. Since these firms were the biggest employers with the largest labor forces, they merited special treatment from the government. Small industry also benefited from public credit, but the greatest beneficiaries were the established, large firms, including those that were publicly owned. This system represented a massive state subsidy for large firms, private and public, since amortization was granted in long-term installments that, combined with a highly inflationary economy, meant that the firms often paid negative interest rates. The Perón governments of the 1940s and 1950s introduced important changes regarding the role of the state in distributing credit. The nationalization of the banking system and the creation of new public lending institutions such as the Banco Industrial heightened the degree of interpenetration of business and government. This banking system lacked effective oversight and was subject to arbitrary decisions and constantly revised norms and regulations as well as high turnover in its board of directors (the Banco Industrial, for example, had six presidents and thirty-seven different general managers between 1944 and 1955). Effective economic planning never characterized its activities, which were essentially “political” in nature. With the fall of Perón’s government in 1955, the government of the Revolución Libertadora sought to make reforms in the banking system, ending the state monopoly and establishing tighter regulatory guidelines for public banks, such as the Banco Industrial, though with mixed results.

One thing that did not change with the fall of Perón was the degree of state involvement in the economy, which increased throughout the years from 1955 to 1976. Business-state relations were characterized by a growing dependence of the former on the latter, with the state not only assigning resources but also gradually increasing its direct presence in and sometimes assuming outright control of private firms as a shareholder. Through three public agencies (the Instituto Mixto de Inversiones Mobilarias, the Banco Nacional de Desarrollo, and the Caja Nacional de Ahorro y Seguro), the state assumed the debts and obligations of an increasing number of private firms, augmenting its already formidable presence in the economy beyond the many public-sector companies. The kind of state capitalism that emerged over the course of three decades in Argentina had actually begun in the mid-1940s, with the Banco Industrial and the Instituto Mixto de Inversiones Mobilarias both buying stocks of private firms on a small scale but increasingly after 1955.

There were many reasons for this growing state involvement in the economy, but the predominant one in the 1960s and early 1970s appears to have been the weak financial position of industrial firms and the impending bankruptcy of a number of them, with fears of large layoffs and their social consequences. Perhaps the most revealing case was the industrial giant SIAM–Di Tella, Argentina’s flagship industrial firm, which experienced increasing financial difficulties after Perón’s fall from power. In 1960, the Di Tella family still controlled 50 percent of the common stock, but a little more than a decade later, the state held more than 60 percent. Within a few years, the company was under state control. Perón, in one of his last acts, signed the 1974 decree establishing it as a publicly owned company. Impending bankruptcy was not the only reason for the state absorption of private firms. Interest in protecting firms regarded as essential to the national interest and economic development also influenced this tendency. By the time of the 1976 military coup, the state was the dominant economic actor in the country, building on Perón’s legacy as a regulator and administrator of public firms to become in the years 1955–76 a major shareholder in private companies, especially industrial ones. By 1976, the state was a shareholder in most of the country’s top one hundred privately owned industrial firms and increasingly tended not simply to rescue beleaguered companies from bankruptcy but to take an active role in their administration as a member of their boards of directors.

Crisis and Collapse of National Capitalism

The politics of national capitalism reached a chaotic and ultimately tragic culmination during the Peronist restoration (1973–76). This complex social and political conjuncture has been studied extensively. Much less is known about economic policy in these years, though an attempt has been made to offer some understanding of the background and trajectory of Gelbard’s ministry and the cornerstone of his economic program, the Pacto Social. The experience of Perón’s last government illuminates the entire trajectory of the Argentine political economy over the course of three decades, the era of so-called national capitalism. The return of the Peronists to power after almost two decades of proscription was not due directly to economic problems, which were relatively minor compared with the critical political circumstances and the rising wave of social protest that had begun with the 1969 Cordobazo. The restoration of Peronist rule, it was hoped, would calm the waters and provide an escape valve and national reconciliation to put a halt to escalating social tensions and political violence.

Though economic problems were not the reason for the restoration of Peronist rule, the latter provided an opportunity to take the national-capitalist model to its culminating moment. The Peronist restoration came after the capitalist restructuring program undertaken by the government of General Juan Carlos Onganía (1966–70), which heightened tensions between the country’s business groups. Heavily influenced by the economic program of the military government in neighboring Brazil, Onganía’s economic program followed neither a “liberal” nor national-capitalist model but stressed modernization and full integration into transnational capitalism. Agrarian sectors were not favored by these policies, but neither were the nationally owned industries or the regional economies that were linked in the national-capitalist model. Rather, the power of certain public companies and the state bureaucracies representing them was enhanced in alliance with the multinationals. The latter were granted a welter of favorable measures on taxation and profit remittances, and macroeconomic policies favored income concentration and their domestic market possibilities, for example, in the case of the automobile industry. Onganía’s policies, though arguably successful in terms of its modernization objectives, failed because of their weakness outside the state sector, depriving his government of support among the country’s capitalist classes. It is not by chance that former enemies such as the SRA, the UIA, and the CGE were able to find common ground in their criticisms of Onganía’s economic program. The subsequent governments of General Roberto Levingston and General Alejandro Lanusse looked for more support among fractions of the country’s capitalist classes, but they did so in an inconsistent and ultimately ineffectual way, postponing a decision about economic policy for the incoming Peronist government.

The Peronists return to power also represented a return to the economic nationalism of Perón’s first administration. In exile, Perón had been forced to move away from the center and the moderate positions on economic policy toward which he had clearly been headed in his second administration and embrace a more populist agenda, one that this time had a faintly Marxist tinge to it. He adapted his discourse, economic and otherwise, to the leftward direction manifest in Argentina’s political culture in the 1960s and 1970s, especially after the Cordobazo. His talk of “socialism” and “Third World liberation” may have responded to no more than strategic calculations in his bid to return to power, but it unquestionably gave more momentum to an economic program that would favor the so-called national bourgeoisie over agro-export interests or the technocratic-multinational alliance favored by Onganía. Whether or not he was sincere, given the political temper of the early 1970s, Perón had little choice but to accept the national bourgeoisie’s economic program as his own and to choose the CGE president Gelbard as the new minister of the economy.

Who benefited from the economic programs during the decades leading up to the neoliberal reforms? On one level, the answer is rather banal: different groups at different moments since economic policy changed in these years and was not all of one piece. Indeed, disputes over economic policy and the distribution of resources were at the heart of the country’s notorious instability in these years. Winners and losers depended on precisely which government was in power. Nonetheless, there is a certain consistency to economic policies during this period and a number of them were the common property of all governments in these years, whether Peronist, Radical, or military. The state capitalism, with antecedents in the governments of the 1930s and then deepened under the Peronist ones of the 1940s and 1950s, was continued, to some degree, by all the governments in this period. Even one as outspokenly liberal as Aramburu’s, retained institutions and perpetuated practices in finance, the industrial relations system, and growth of the public sector it so vilified in the Peronist governments. Economic disputes were more about the distribution of the spoils of the system than they were about the system itself. Some governments, Onganía’s in particular, had attempted to make significant modifications in the system, but none sought to scuttle it altogether.

The “national capitalist” model became the bête noire of the neoliberals in the years following the 1976 military coup and indeed had many baleful effects on the economy. However, it would be wrong to regard these policies as complete failures. Though highly inflationary, unemployment remained low and, contrary to what has been said by its detractors, entrepreneurial initiative, technological development, and even a kind of “development” took place. For example, recent studies on the Argentine economy have demonstrated that the presumed technological backwardness of Argentine industry was not nearly as great as critics have maintained, and even economies of scale were achieved in some industries. The failures of this model seem more to do with the ineffectiveness of state intervention and to political manipulation of public agencies such as the banking system than to intervention. Economic planning did not fail in Argentina because a genuine economic planning was never attempted. Rather, successive governments devised policies in accordance with the sectoral interests they represented, expressed as broad ideological precepts that served in reality to justify rather than compel the behavior of interest groups and corporative organizations. Unable to establish their hegemony, the various fractions of the Argentine bourgeoisie would have to await the military government of the “Proceso” to break the stalemate when, through a combination of state terrorism, foreign debt, and a disarticulation of the state, the basic rules of the game and even the leading actors of Argentina’s political economy would be profoundly altered.

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