Argentina on the Brink; H. Sennholz

716 the use of violence and intimidation to achieve political ends, led to 1313 bombings in 1975, killing 69 people and injuring 326. At the same time and for the same reason Argentina suffered the armed aggression of terrorism and Marxist guerrillas that killed more than 1,000 people and left scores injured and mutilated. It defended itself from an organized onslaught of international commu nism without the help of any friendly power. Argentina, like so many other countries in the world, suffers from a puzzling discrepancy between eco nomic potential and political real ity. The country is graced with nat ural resources that surpass those of most other countries of the world. Its greatest asset is the economic spirit of the people, their will to win and their courage to work. But ArARGENTINA ON THE BRINK 717 gentina also has become a synonym for political instability and govern ment mismanagement. Since 1930 there have been more than 20 pres idents, only two of whom completed their elected terms. Some were con stitutionally elected, others ap pointed by military juntas. All con tributed to the political disorder, to social factionalism and economic disintegration. Most recently, the junta waged a popular but illfated foreign war and, as if it were bent on suicide, reacted to the debacle by applying the most destructive poli cies conceivable.

EuropeanRoots Argentina is by far the "most Eu ropean" country in Latin America, with 97 per cent of the population of Spanish, Italian, British and Ger man ethnic origin. Large-scale Eu ropean immigration in the decades after 1880 reaffirmed the European ties, spurring modernization and de velopment. European intellectual thought has had, and continues to have, a pervasive influence on Ar gentine political, social and eco nomic life. The turbulent history of Argentina remains incoherent and perplexing unless it is related to Eu ropean intellectual thought. In its formative years Argentina, like Europe during the 19th cen·· tury, was torn by conflicting philo sophies on the nature of government and its constitution. Influential groups sought to establish a monar chical govern~ent until they were defeated by others who favored a re publican formJ Violent disagree ment continued!on whether it should be centralized orr federal. The consti tution of 1853" modeled mainly on the Constitution of theU.S., sought to forge a compromise between the two. But despite all the political conflict and str~fe, economic freedom prevailed throughout the country.

With the aid or foreign capital and technology economic production ex panded by leaps and bounds. Rail roads were bUilt, agriculture and commerce prospered, fostering a ris ing tide of imm.igration. During the 1890s two new politi cal parties, wh.ich were to play im portant roles in the future, derived great strength from the new Span ish and Itali~n immigrants. The Radical Civic Onion, often called the Radical Party, i appealed to all social classes for sociialreforms, especially on behalf of labor and labor unions. The Socialist Party, whose doctrinal roots were cle$.rly Marxian, limited its appeal to, a single class, the workers. It did not gain mass sup port even in its stronghold, Buenos Aires, until Wprld War II. The Radica~s coming to power in 1916 conductep economic policies of far-reaching government interven tion, which, in U.S. parlance, gave Argentina its l"New Deal." It led to economic confusion and social up718 THE FREEMAN December heavals and fostered antidemo cratic sentiment that was coming from abroad. During the 1920s Ar gentineans began to admire the It aly of Mussolini, the Spain of Primo de Rivera, even the Russia of Lenin.

And the military sensed a new mis sion to regenerate the nation it thought debased by inept and cor rupt parties and administrations. It struck in 1930. General Jose F. Uri buru, who had been converted to Fascist ideas, overthrew the Radical regime in a military coup. But lack ing popular appeal and support by a large part of the army, he soon had to yield the reins of power to an elected conservative administration which conserved the New Deal and busied itself with full-employment and economic recovery measures. The Peron Years Recent Argentine history begins with Juan Domingo Peron who, in 1943, with a group of government officials and a military junta, over threw the conservative government. Elected president in 1946, he set out on a course of nationalism, social ism, industrialization, and anti-U.S. agitation. He nationalized the banks, the railroads, and other utilities, and embarked upon public works on a large scale. He squandered the cap ital substance accumulated in the past and, upon its depletion, en gaged in massive currency and credit expansion. He commanded the army, the police, the labor unions, and his Peronista party, which permitted him to dictate the political life ofthe nation. He eliminated most consti tutionalliberties, such as free speech and free press, and ruled supreme until he was overthrown by an army navy revolt in 1955. Thereafter, the country oscillated between military juntas and elected governments that did little to dismantle the Peronist system. Peron returned to power in 1973, died in 1974, and was suc ceeded by his wife Isabel. In the face of widespread unemployment, se vere shortages, riotous inflation, civil strife, and bloody raids and assassi nations by terrorists, the military returned to power in 1976.

The War Against Terrorists The bloodless coup of March 24, 1976, was welcomed by most Argen tineans, living precariously between the terrorism and kidnappings of rural and urban guerrilla organiza tions and the fascist Alianza Anti communista Argentina. "Death squads" were executing hundreds of their political enemies and threat ening to kill more. Tp.e Marxist Leninist Montoneros were kid napping eminent bankers and industrialists, including several U.S. citizens, murdering them when blackmail demands remained un met or releasing them for stagger ing ransoms. They even mounted major attacks against the army and 1982 ARGENTINA ON THE BRINK 719 its arsenals. During Isabel Peron's 21 months in officepolitical violence was responsible for some 1700 deaths. The primary goal of the new gov ernment was the eradication of ter rorism and subversion. It estab lished the death penalty for political murder and launched a massive campaign against guerrilla strong holds. By the end of 1978 it had crushed most terrorist forces and re stored law and order throughout the country. The junta had earned the gratitude of nearly every Argentin ean and was riding high in esteem and popularity.

International critics of the regime denounced .the campaign against terrorism as a countercampaign of violence against individuals. consid ered subversive, and pointed at evi dence of torture and arbitrary ar rest. In its first 12 months in office the junta was accused of having killed 2300 persons, held as many as 10,000 in prison for political rea sons, and caused between 20,000 and 30,000 to disappear. The govern ment promptly rejected the validity ofthese foreign reports, claiming that they were communist efforts to dis·· credit it. It invited the InterAmer·· ica Commission on Human Rights of the Organization of American States (OAS) to investigate the allegations. A Commission report was pub lished in Argentina in 1980, and promptly rejected by the government for being 'fneither objective nor balanced." The pfficial answer given by President V~dela did not clarify the situation, bllLt tried to explain the reasons for hunjLanrights violations: there has been a"civil war" and "all wars are dirty." His successor, Gen eral Viola, later clarified the junta position: as a b~sic condition for the restoration of, a civilian govern ment, there must b~ "no revision of what has happened during the fight against terrorism." His minister of the interior ad({ed bluntly that "no victorious armty was ever asked to explain its behavior during a war."

Civilization Threatened Objective ob~ervers who abhor vi olence in any form and by any party cannot escape! the conclusion that political terrorism constitutes a dec laration ofwar:against society, which cannot exist without law and order. Terrorism, wh~ch is endangering the lives of countl~ss people around the world, is mor~ than unlawful activ ity by common criminals. It is a po litical movement that does not seek destruction for,its own sake, but aims to destroy the private property or der. It is org4nized communist ag gression laun~hed against the free world. If it is true that Western Civ ilization rest~ solidly on private property, then terrorism must be viewed as a war against civilization itself. As the individual has the right of 720 THE FREEMAN December killing in self-defense, society has the right to wage war for its own preser vation. But even if the terrorists vi olate all principles of virtue and commit heinous atrocities against humanity, the forces of law and or der must not violate "due process,"

i.e., fair procedure as to life, liberty and property. They must defend so ciety in a civilized manner and, as guardians of civilization, act beyond reproach. An EconomicDebacle In 1978 the junta was riding high in public acclaim and respect. Hav ing restored law and order, it now could set about the restoration of the economic foundation of social coop eration which had been shattered by years of senseless destruction. A ba sic choice had to be made: to pursue the Peronist system, making it work with military order and discipline or restore the competitive private property order that is working so well in other countries of the West. The generals are not political econo mists, but having endured the chaos and corruption of the Peron regimes, they seemed to opt almost instinc tively for the private property order. Three junta presidents have since struggled with the crippled econ omy. They reduced the number of state-owned enterprises by a few hundred, recast some labor legisla tion, and banned the political activ ity by the powerful labor confederation. Piece by piece they sought to whittle away the excesses of the Pe ronist system and restore some mod eration. All along they, like so many of our politicians, were talking in glowing terms about an early return to private enterprise under govern ment supervision.

The military was deeply con vinced of its historic mission to lead the nation to regeneration after so many years of party corruption and ineptitude. There was to be no re turn to civilian rule before the 1990s. But "to strengthen future demo cratic institutions" President Videla established a Ministry of Planning which, in consultation with various economic and intellectual sectors, was to develop a "national recon struction plan." It would be difficult to distinguish the Videla plan of reconstruction from similar plans designed by Juan Peron, or for that matter, by any dictator anywhere in the world. It provides for more government plan ning, more ministries, more bureaus and bureaucrats, and more govern ment power over the lives ofindivid uals. His thought and language are those of Caesars who lack all under standing ofthe nature offreedom and a free society and who have lost all respect for humanity .

Surely, to facilitate a speedy eco nomic recovery from the morass of radical government intervention is a difficult and demanding task. It 1982 ARGENTINA ON THE BRINK 721 would tax the ability and courage of any statesman and leader. But the Argentinian junta hardly made a beginning. In fact, it made matters worse by utterly destroying the Ar gentinian currency and by launch ing a disastrous war. While the government was nib bling at labor unions because of their potential threat to junta power, it indulged in the worst inflationary practices seen in a generation. It doubled its quantity of money nearly every year and, in the end, en meshed the economic lives of its peo ple in the most stringent govern ment controls. The exchange rate moved from 140 pesos to the dollar in 1976 to an estimated 15,000 to 1 in March 1982. Incredible Ingenuity Economic life in Argentina has never been more disrupted, dis torted, and disorganized than it is today. If it were not for the incredi ble ingenuity and hard work of the Argentinian people who learned to survive on black markets and in the economic underground, using for eign money, especially U.S. dollars, human survival would be at stake.

In the eyes of visitors from the U.S., the working people of Argentina are performing a miracle that deserves admiration. The country is in the grip of its worst economic crisis in decades. Argentina has a record $39.1 billion of foreign debt and lacks the finan cial resources to meet the obliga tions falling que this year. The cen tral bank is negotiating with foreign creditors seeking extensions and new loans to meet! interest payments. In this respect Argentina has joined scores of underdeveloped countries in Africa and Asia. The junta government has turned the Falkland Jslands debacle into a national disaster more serious by far than that inflicted by the British troops. President Reynaldo Bignone, a retired army general, was named president on' June 22 following a government shakeup. While main taining the old nationalistic position toward the iFalkland Islands, he abandoned aU pretense of return to a market order. He dismissed the brilliant economist, Roberto Ale man, who was struggling to keep government expenditures under control, and appointed Jose Dagnino Pastore Economic Minister. Pastore promptly opened the floodgates of inflation, introduced multiple ex change rate~, fixed interest rates, boosted all wages, and devalued the peso by 22 ,per cent. He thereby dashed all hopes for an early recov ery.

The Falkland Islands War War is a $ad game some people love to play. It is nothing less than a temporary repeal of all reason and all principles of virtue. Surely, the 722 THE FREEMAN December Argentinian junta that ordered the military occupation of the Falkland Islands at the beginning of April re acted to a minor incident involving a small group of Argentinian work ers on one of the islands. It reacted by landing a full-scale invasion and incorporating the islands into the Argentine state. But the junta com pletely misjudged the British reac tion, which was swift and efficient in contrast to the Argentine mili tary operation, which proved to be ill-planned, ill-prepared and ill-exe cuted. The Argentine debacle illus trated again the old maxim that a military force that is preoccupied with running the political, social and economic affairs of a nation loses its ability to serve the purpose and jus tification for its existence.

The generals may have had ur gent domestic reasons for their de cision to occupy the islands. The country was sinking ever deeper into the morass of hyperinflation and economic disintegration caused by inept economic policies of successive junta presidents. The Peronistas and their labor unions were flexing their muscles, openly demonstrating against the military regime. There fore, some diversion was needed to reunite the nation on a popular is sue, and give the junta more time. President Leopoldo Galtieri gam bled as a general-and lost. It is especially sad that the junta adventure was applauded by the vast majority of the Argentine people. Even most intellectuals who other wise observe and analyze Argenti nian problems rather dispassion ately, proudly acclaimed the return of "our Malvinas." Their arguments in support of invasion invariably were taken from history: Spanish sailors discovered the islands, and "we" are the legitimate heirs to Spanish sovereignty.

A court of law surely would need to investigate the succession of claims. But man's contemporary af fairs are not shaped by distant his tory. In the name of history nearly every government may lay claim to foreign territory-the Spanish gov ernment to Argentina and the Ro man City Government to Spain. Above all, the American Indian tribal chiefs may reclaim all the Americas, including Argentina. A Claim Deeply Rooted in Nationalism and Collectivism The popular notion that the Mal vinas are "ours" reflects a deeply rooted blend of nationalism and col lectivism. In no sense of the word can an Argentine citizen claim own ership rights over the property of the islands. Even if his government were to rule the islands, and he would be taxed heavily to sustain the rule, he would have no property rights what ever. But he would be poorer indeed. Long before the invasion the Ar gentinian government was spending 1982 ARGENTINA. ON THE BRINK 723 considerable funds taken from Ar gentinian taxpayers and inflation victims to subsidize the 1700 Falk land Islands' residents. It built an expensive runway at the Port Stan ley airport, financed two weekly flights of big transport planes be tween the mainland and the islands, rendered airmail and air freight ser vices, and installed an expensive ra dio system to guide the air traffic to and from the mainland.

But these expenditures were mi nuscule when compared with those the Argentinian government would have incurred if the islands had be come Argentine. They can be sur mised from the proposals submitted to the British government long be fore the invasion, billion dollar pro posals that would have delivered the islanders into the grip of Argentine statism and socialism: Establishment of a branch of the Banco de la Nacion Argentina, Establishment of a branch of the Caja Nadonal de Ahorro y Seguro, Financial support for housing construc tion by the Banco Hipotecario Na cional, Establishment of fish breeding stations by the Argentine Ministry of Culture and Education, Installation of a radio station, Establishment of an oceanographic re search station by the Universidad Na cional, Installation of a satellite station, Installation of a government telephone and telegraph service, Installation ofa government breeding farm, slaughter house and cold storage plant.

And as if to inject nationalistic linguistic coqflict the government proposed to establish a bilingual school managed by the Ministry of Culture and, Education, create a professional training center and a school of arts and crafts. All that for 1700 islanders! No friend of individ ual freedom anywhere would want to extend such a system to any part of the world. A Flawed Arr,ngement To many Argentineans the present island system is naked colonialism and imperialism that should be abolished immediately. Ofcourse, the terms are ta~en directly from the armory of Marxism-Leninism and imply the extension of the labor contract system to foreign countries. Although m~st governments and their UN delegates assembled in New York may d~sagree, the labor-con tract market:system constitutes the most productive system on earth, bringing fortll the highest wage rates and levels of ~iving. The alternative is a political:command system that assures misery and poverty for all.

And yet, in the heat of debate it must not be overlooked that the Ar gentinian pepple have good reason for complaints about the Falkland government.: Throughout its 149 years of adrr).inistration it has con724 THE FREEMAN December sistently denied basic human rights to all people, except natives, which has been exceptionally painful to Argentineans. Argentineans are not free to move about the islands, own real property, buy or build farms, houses, apartments, hotels, office buildings, or sail and fish in the wa ters of the islands. They are treated as alien outcasts in a country they consider their 'own. The Japanese who could not con quer Hawaii in World War II are free today to move about Hawaii, to own real property, to buy or build hotels, office buildings, apartments, and whatever their hearts desire. They do not have political rights, but en joy basic human rights that make political rights irrelevant and im material. Even aliens who enter the U.S. illegally are guaranteed "due process" under the law. In fact, a re cent Supreme Court decision ex tended all constitutional rights to il legal aliens. That is, no government can make or enforce any law which abridges the privileges or immuni ties of residents, nor can any gov ernment deprive any person of his liberty or property without due pro cess, nor deny anyone the, equal pro tection of the laws.

Basic Human Rights If the citizens of Argentina were to enjoy such basic human rights in the Malvinas, all causes for alien ation and conflict would disappear. The issue of sovereignty over the is lands becomes unimportant where the basic rights of every human being, regardless of race or nation ality, are safeguarded. Sovereignty does not matter where every indi vidual can move about freely with out government permit, license or visa, where he can freely exchange his goods and services, engage in a business of his choosing, sell his la bor or buy labor, own land and structures, or cultivate the soil. To paraphrase the British philosopher, John Stuart Mill, he is free to pur sue his own good, in his own way, so long as he does not attempt ·to de prive others of theirs or impede their efforts to obtain it. To return to the prewar conditions in the Malvinas is to perpetuate the danger of conflict and deny the basis for a permanent and peaceful settle ment. Self-determination is flawed where it aims at denying basic hu man rights to everyone but a privi leged few. Self-government for 1700 islanders is neither democratic nor peaceful when it deprives millions of neighbors of their human rights and impedes their efforts to pursue their interests.

The solution to the Malvinas cri sis cannot be found in a mere change of sovereignty, or a United Nations trusteeship, or a multinational force that guards and guarantees the is lands' tranquility. Mrs. Thatcher's plan of some kind of elected self-gov1982 ARGENTINA ON THE BRINK 725 ernment for the islanders offers no lasting solution, nor does Argentine ambition of sovereignty which is state power. Lasting peace, which is the natural state of man and the de sire of all the peoples, depends on a universal reduction of such powers. It springs from individual freedom. Towardthe Brink Argentinian history, like any other national history, can only be under stood as a history of ideas seeking realization through individual ac tion. Political, social and economic ideas slowly filter into the minds and consciences of men and govern their actions. Ideas are men's great guideposts that lift civilization or destroy it.

The intellectual history of Argen tina has been similar to that of all other Western countries. Toward the end of the 19th century, the media of education and communication, the schools, churches, and political par ties were teaching and preaching the virtues of nationalism, which is de votion to the interests of the nation and its government. Later they added the doctrines and theories of social ism in all its variations and colors. By the time the Radical Party came to power, in 1916, most Argen tineans were espousing Marxian no tions of dialectical materialism, of class conflict and class wars, of labor exploitation by businessmen and capitalists, of concentration and monopolization. A few years later many welcomed Lenin's line of thought about colonialism and imperialism. All classes ofisociety, but especially the educated; classes, were imbued with the urgent need of social and economic ref<1>rm. Even those who passionately )attacked world com munism because of its atheism em braced the ideas of the Communist Manifesto and the program of the Communist International.

rhe generaas, most of whom came from middle-class families, attended the same sc4ools, belonged to the same church~s, and were influenced by the same political parties as all their countrymen. Their social and economic views never differed one iota from those of others. Even their political faith. in political salvation through stropg leadership differed from that of' party politicians only on the matter of who the savior was to be. They, too, believe in every point of the Communist Manifesto. When I interviewed the commanding gen eral of the War Academy for senior officers, in April, 1982, he promptly rejected the: suggestion of elemen tary courses in market economics and the private pi;operty order on grounds that "both sides must always be pre sented." In smort, he felt at sea with out mainstream economics, which is socialist, Peronist, and Marxist. Knowledge and education are the only cure for/the political, social and economic diseases the modern world 726 THE FREEMAN December has engendered. But people who do not know and cannot find the dis ease cannot develop a remedy. If they, as if to make matters worse, prevent others from searching, the disease may indeed become fatal. But this has been the Argentinian policy for more than half a century. Public education on all levels has been state education, that is, by the state, of the state and for the state. Compet ing private and parochial schools have been severely restricted, regu lated, and often even outlawed.

All PartiesProposeGovernment EducationalPrograms The educational programs of the political parties reveal a sad state of intellectual affairs. The important Radical Party (UCR), which has been in power longer than any other party, is proposing to raise educational outlays to 25 per cent of the govern ment budget. It would make govern ment education obligatory through first years of high school. Private ed ucation would be controlled severely and diplomas and licenses be awarded only by government insti tutions. The Democratic Socialist Party (PSD), too, would boost government expenditures for government edu cation, limit degrees, titles and li censes to state universities, and make all teacher training and professional education the exclusive function of the state. It differs from the UCR program only in that it would em phasize sex education in all schools. The Popular Christian Party (PPC) would raise government expendi tures by 25 per cent, reshape the public educational system to the needs of the community, grant state subsidies to parochial education, and restrict or outlaw all profit-oriented education.

The Intransigent Party (PI), while advancing a similar program, would introduce higher education without budgetary restraint or limitation. The Progressive Democratic Party (PDP) would raise government ex penditures for government educa tion to 4 per cent of GNP, build enough schools to cover all national needs, and use the mass media to offer civic education to the general public. The Integration and Development Movement (MID) would "fortify" government education and promote national culture in order to strengthen national traditions. (Cf. Ricardo Zinn, Argentina, Robert Speller & Sons, N.Y., N.Y., 1979, p. 187-189.) There is not one political party in Argentina that favors a free ex change of ideas or open competition between different educational sys tems. No eminent politician, gen eral of the armed forces, or leading clergyman openly urges a repeal of countless strangling restrictions and bureaucratic controls over the edu1982 ARGENTINA ON THE BRINK 727 cation of the people. The few voices for individual freedom are drowned out by the deafening propaganda for statism and government omnipo·· tence.

Argentina is hovering on the brink of political and economic disaster. One-third of the Argentinian elec torate long for a return of Peronism, another third are eager to cast their votes for the Radical Party, and most others would lend their support to Government Intervention democratic socialism, Christian so cialism, or even communism. But it would be a dreadful mistake to wal low in misery:and despair. After all, Argentina is a Western society that springs from j the roots of Judeo Christian civJilization, with divine sparks of irnepressible individual ism. A few clear voices are heard throughout the land. No political force on earth can forev~r suppress those voices. i IDEAS ON LIBERTY IN A NATION without a thriving business community, private wealth is generally stored in vaults, or used in conspiquous consumption, or in vested in real estate, or placed with business icommunities abroad. But where a country's private business is not su~ject to Procrustean mea sures of control, this private wealth is less likely to be shipped abroad, buried, or otherwise diverted into circuits of low economic potential. It is likely to come out of hiding, or to be br<j)ught home from abroad, particularly since the prospects of profit are ~ormally higher in a poor country if the political environment is good.

Private enterprise never expires, even under the most rigid controls. But much of it goes to surreptitiously conducting the current of eco nomic energy under, round, and through tile backdoor of the control system, in such forms as smuggling, black marketing, personal influ ence, and straight corruption. The fact that a high degree of control, and; a low rate of energy flow, occur together, is explained by Socialistic gov,ernments as necessary but temporary. The low energy flow, they say, requires controls so that what little there is shall not be wasted. But it qoes not seem likely to be temporary. The converse side of a Five-Year Brogram for planned growth is five prospective years of economic repression. The more the state plans, the less practice the private citizen gets in planning. HAROLD M. FLEMJNG, States, Contracts and Progress RobertJames Bidinotto A Guideto Principled Self-Defense A FRIEND approached me recently, concerned about a course he was taking that was being taught by a Marxist. My friend had been as signed a speech topic: "Who should own/control the workplace?"