Levingston: The "Nationalization" of the Bureaucratic-Authoritarian State
1. A New President
There was as much support for the coup that ousted Organía as for the one that had installed him in the presidency. Dislodged from the apex of the state apparatus and neutralized within thearmed forces, the paternalists had suffered a clear defeat. Naming the victors was not so easy: the composition and goals of the new government remained a matter of speculation. One point, however, was clear: the armed forces largely agreed that the purpose of the coup, despite its "anti-corporatist" aims,[*] had been to prolong the BA. No one was contemplating a headlong rush toward a political way out, which would have implied an admission of failure of the "modernization" of the country that had
been claimed ostentatiously for the past four years. Besides, it was tempting to blame everything that had gone wrong on the blunders and ideology of Onganía and his current. The moment had arrived, thought many within the armed forces, to forge new alliances and to appoint officials better suited to achieving the grandiose goals set forth in 1966.
The murder of Aramburu had eliminated the only figure who seemed capable of guaranteeing that a political solution could be negotiated with the political parties without jeopardizing the basic interests of the upper bourgeoisie and the armed forces. The army, moreover, appeared to have united behind General Lanusse, an officer particularly congenial to the upper bourgeoisie and the liberals. Now that the liberals controlled the armed forces, the realization of the maximum program of the upper bourgeoisie seemed possible once again. The time was ripe to end the "weaknesses" and "incongruencies" that had allowed the "social peace" to be disturbed, and to build on the achievements of the Krieger Vasena period by implementing without hesitation the full range of economic and social policies favored by the upper bourgeoisie. Such a program would require, of course, the indefinite postponement of elections and political party activity. There was no need to confuse the issue: since the new stage of the Revolution would be controlled by the liberals, it would be democratic. Party activity and elections, however, would be relegated to the distant future—or so it was still believed.[*]
The nationalists were less noisy than the liberals in expressing their democratic convictions, perhaps because their views on the subject were suspiciously close to those of the paternalists. Besides, the mere mention of a specific date for elections, however distant, would have raised unnecessary complications in the formidable task that the nationalists planned to undertake: fashioning a government under their control, allied with the local bourgeoisie and, insofar as they would accept a subordinate role in the coalition, with the unions. The nationalists differed from the paternalists in envisioning a more dynamic economic role for the state apparatus, in seeking to confine transnational capital to specific areas of the economy, and in cultivating the support of the pueblo through the use of nationalist slogans and appeals to social justice. Whereas the liberals sought to maintain the proscription of the
political parties, the nationalists contemplated a popular mobilization that would replace the parties with a government-controlled movement.
But by 1970, in contrast to 1966, a solid majority of public opinion favored holding elections without further delay.[*] Moreover, Onganía's efforts to distinguish the military from the government did not stop many Argentines from holding the armed forces responsible for the many things that had gone awry since the 1966 coup. Accordingly, many took a dim view of evidence that, regardless of whether the nationalists or the liberals prevailed, the continuation sine die of the "military regime" was being contemplated. But these changes in opinion still lacked solid support within the armed forces and class organizations. Even the unions, tempted as always to reach an accord with the government and not averse to a nationalist stage, carefully avoided the issue of parties and elections in stating their support for the coup.[†]
Another new aspect of the situation was that the armed forces announced their readiness to participate fully and in a variety of ways at all levels of government. One of the first acts of the junta of commanders in chief was to declare that it would decide jointly with the president all matters of "significant importance." The president, however, had not yet been named. The commanders in chief and their respective branches of the armed forces had trouble agreeing on Onganía's successor, in part because of interservice rivalries and in part because of the importance that both nationalists and liberals attached to controlling the presidency. The announcement that this matter had been resolved came several days after the coup. To the surprise of almost everyone—including, apparently, the new president himself—the choice was Roberto M. Levingston, a junior general who was at the time heading the Argentine delegation to the Interamerican Defense Council in Washington, D.C. Levingston, who was largely unknown to the public, had played an important behind-the-scenes role as director of the army's intelligence service in the military struggles of 1962–63 which had culminated in the triumph of the legalists. Although he had never commanded a unit of military importance, his colleagues regarded him as an
introverted but talented officer. His reputation as an intellectual and his tendency to keep to himself made him something of a mystery to his fellow officers. It may be asked why the junta selected an officer who was not in command of troops, was unproven as a military leader, and was regarded as an enigma by his own colleagues. The answer is that he was chosen for precisely those characteristics. In the first place, the junta, now intent on fully militarizing the regime, saw the president basically as its delegate. Levingston would be in charge of the routine affairs of government but would be only one of four participants (and the only one without a military command) in making truly important decisions. In addition, selecting a president with little political weight of his own seemed to obviate a series of problems: no threat would be posed to Lanusse's control of the army, fears within the navy and air force that the army would gain excessive influence over the state apparatus would be diminished, and, since Levingston was identified as neither a liberal nor a nationalist, a reasonable balance would seem to have been struck between those two currents.
2. Governmental Decisions and Conflicts
With Levingston's assumption of the presidency came the formation of a new cabinet, a process in which the junta had more say than Levingston. The Interior and Social Welfare ministries went respectively to Brigadier Eduardo McLoughlin and former naval officer Francisco Manrique, both liberals and both close to Lanusse. Appointments to the Public Works and Foreign Relations ministries were of a different sort. The new Minister of Public Works was Aldo Ferrer, a developmentalist técnico whose ideas were quite advanced for that current. José María de Pablo Pardo, the new foreign minister, came from the mainstream of traditional Catholic nationalism but was also closely connected to the liberals, particularly through his close ties with the navy. The Ministry of Economy and Labor was assigned to Carlos Moyano Llerena, who was reputed to have been the principal intellectual influence behind Krieger Vasena's program. These appointments were clearly biased toward the liberals, and the CGT and CGE were the first to express concern. When Levingston held his first public meeting with leaders of the CGT, the latter made no effort to disguise their lack of enthusiasm for the president's haughty demeanor and for what they termed his "reluctance to engage in dialogue." The CGE, however, was mollified
by a speech in which Levingston announced that the government would seek to reverse economic denationalization and to promote national capital, especially small and medium-sized enterprises. Included in this speech and in the National Policies that the junta revised and issued after Onganêa's ouster were some familiar themes. Profound structural reforms and community participation through authentically representative basic organizations were again called for, and reference was made to the tremendous evils brought on by political parties and the electoral system. Such themes, punctuated as before with appeals to national grandeur and to the ultimately spiritual content of development, had previously provoked sarcasm and alarm. But since all the currents were for the moment preoccupied with establishing their positions with respect to the new government, and since each still expected to control it, these obvious continuities provoked few comments at the time.
Attention soon focused on the Ministry of Economy and Labor, where Moyano Llerena's decisions closely recalled the ones taken in March 1967. The peso was devalued from 350 to 400 to the U.S. dollar (although Moyano Llerena, unlike Krieger Vasena, would not claim that this would be the final devaluation); exports were again subjected to a withholding tax that allowed the state apparatus to absorb entirely the resulting foreign exchange windfall; import duties were lowered to compensate for the effects of the devaluation; and a new voluntary agreement on prices was proposed. Moyano Llerena argued that these policies would be a major step toward restoring confidence in the stability of the currency. But conditions had changed since March 1967. Substantial sectors of the population were mobilizing against the BA, and union leaders were pressing aggressively for economic concessions. Moreover, the Cordobazo and its sequels[*] had undermined the government's capacity for coercion. Repression did not disappear, but its continuous and systematic use against the entire popular sector was no longer a credible possibility. Under these conditions, the government could not, as it had done in 1967, impose a wage freeze, and without a wage freeze Moyano Llerena's program was fundamentally compromised. Moreover, while in the summer of 1967 the government had viewed the union leaders as the principal agents of subversion, it now
saw them as indispensable allies in containing the worrisome popular activation. Thus, not only did Moyano Llerena's policies include no mention of a wage freeze, they also earmarked the better part of the fiscal revenues from the devaluation to raising payments to pensioners. There is perhaps no better indication of the relation of forces prevailing after the Cordobazo than the contrast between Moyano Llerena's use of these funds and the way they were used by Krieger Vasena.
Moyano Llerena's reduction of import duties[*] and his association with the Krieger Vasena period soon moved the CGE and the nationalists to launch sharp attacks on the Economy Minister,[†] who got little support from the upper bourgeoisie and its organizations. Caught off balance by the devaluation, aware of the difference between the contexts of 1967 and 1970, and little moved by Moyano Llerena's concern for the pensioners, the organizations of the upper bourgeoisie criticized the devaluation, calling it an "unnecessary and suicidal" step that had destroyed what little confidence remained. If policies similar to those of 1967 had been enacted with the hope of improving expectations, they had the opposite effect. Prices rose almost immediately and the recently devalued peso was placed under heavy pressure. Opposed by its natural adversaries, criticized by the upper bourgeoisie, and having produced effects the reverse of those intended, Moyano Llerena's administration soon ended with his resignation.
The Public Works Ministry performed more successfully, launching several important projects with widely publicized dynamism. But serious friction soon emerged in other areas of government. Levingston had appointed Francisco Luco, a former Peronist member of Congress, as Undersecretary of Labor. Luco's administration was subjected to wage demands it had no capacity to meet. Moreover, the new government divulged through Luco its unwillingness to repeal the Law of Professional Associations, proposing instead—once again—to build "structural bases" of support (this time for the nationalists) among the unions. The unexpected revival of this theme drew attacks with a distinct flavor of déjà vu.
Another point of friction appeared in the Interior Ministry, where
McLoughlin, without mentioning a specific timetable, had clearly based the future political plan on an accord with the political parties along the lines of the one that Aramburu had attempted. McLoughlin hoped that the new government would achieve successes that would give it sufficient leverage to impose guarantees on the political parties that would prove satisfactory to the bourgeoisie and the armed forces. But the Undersecretary of the Interior, Ricardo Gilardi Novaro—who, like Luco, had been appointed by Levingston and not by the junta—acted independently of McLoughlin and in direct accord with the president. Levingston and Gilardi Novaro had in mind something very different from what McLoughlin envisioned. After four or five years of "deepening the revolution," a democracy, to be sure, would arise, with "constitution, parties, and elections." But this democracy, unlike its predecessor, would be neither "factionalized" nor "disordered": on the contrary, it would express the consensus achieved by the Revolution, thanks to which, in the words of Levingston, it would be "hierarchical" and "ordered." Such a vision, with its less explicit but still noticeable corporatist components, was scarcely novel. However, it incorporated elements that attested to the distance separating the nationalists from the paternalists. The elimination of the old parties, for which even harsher words were reserved than in the Onganía period, was explicitly proposed. It was also made clear that those parties would be replaced by a very few new ones, no less "hierarchical" and "ordered" than the rest of the system being contemplated. It was nowhere specified how many parties would exist, but the possibility that "few" meant only one was implicit in plans to create a "Movement of the Argentine Revolution" to embody and promote its "philosophy" during and after the military regime.[*] This movement would be the instrument for superseding the old parties, for mobilizing the pueblo behind the "National Revolution," and for channeling this mobilization in support of a state guaranteeing "national capitalism"
and an ordered, "hierarchical" society.[*] Evidently inspired by the Mexican PRI, this scheme, like the Moyano Llerena program, lacked a number of conditions for success. Most important, the movement would not originate in anything resembling a revolution. It would also have to contend with a popular sector that had already passed through a populist experience (the Perón governments) and that had moved toward an activation that far exceeded the limits contemplated by those who sought to mobilize it from what remained of the BA. If the political and organizational space for the project was virtually nonexistent, Moyano Llerena's program (which, in spite of its inconsistencies, tried to conform to orthodoxy) ensured a scarcity of the economic payoffs that might have alleviated its difficulties. Moreover, when economic policy took a turn more consistent with the nationalists' aspirations, the ensuing crisis, as we shall see, created even more intractable problems.
The movement that the nationalists contemplated was fundamentally nonviable and went no further than attempts to recruit what came to be called the "intermediate generation," more or less youthful leaders of the traditional political parties whom the nationalists regarded as uncontaminated by the old politics. These efforts demonstrated to the liberals that Levingston was no closer to them than Onganía had been and heightened the hostility of the increasingly active political parties (particularly the Peronists and the Radicals)[†] to the government. Moreover, Levingston's insistent references to hierarchy and authority, like his attacks against "politicians" (who in light of what had occurred since 1966 had risen considerably in public esteem), did not facilitate his efforts to demonstrate his "concern for the poor" and to reach the people through clumsy "dialogues." On top of this the nationalists refused
as firmly as their paternalist predecessors even to discuss a date for elections.[*]
The nationalists sought to manipulate the popular mobilization from the government, above and against the political parties. They were prepared to do the same against the unions if the latter proved unwilling to enter into subordinate collaboration with the government in return for selective benefits and policies more sensitive to the economic demands of their rank and file.
The nationalists' designs became the target of corrosive popular satire that focused on Levingston's arrogant style and increased the hostility of the liberals and the political parties toward the new president. Many concluded that if things had changed at all, it had not been for the better. This was certainly the viewpoint of most of the media, which hammered it home in the anti-Levingston offensive it soon launched. Popular activation very different from the sort that the government contemplated rose to higher levels, guerrilla activity gathered further momentum, and the unions pressed for wage increases which, if conceded, would only accelerate the collapse of Moyano Llerena's policies. The seven percent wage and salary increase granted in October 1970 was not enough for the CGT, which formulated a new Plan of Action and inaugurated it with widely observed general strikes on the ninth and twenty-second of that month. In November 1970, despite the announcement that collective bargaining would be resumed in March 1971 with no government-imposed limits on wage and salary hikes, and despite the fact that Moyano Llerena had already resigned, a thirty-six-hour general strike was called and widely heeded. These events demonstrated the government's difficulties in forging an alliance with the unions, at least so long as no major changes occurred in economic policy. Furthermore, it was clear that the government would not and could not use extensive repression against the unions: the strikes generated no sanctions, and the Interior Minister did no more than blame them on the "lack of representativeness" and "politicization" of a "small group of pseudo-leaders."[†] Nor could the generalized hostility toward the government be controlled.[‡]
Under these conditions, the organizations of the upper bourgeoisie bitterly criticized the wage and salary increases and the "lack of [political] guarantees." Moreover, the main economic indicators of an acute loss of confidence—a black market and a strong demand for foreign exchange—emerged once again. At the same time, beef and other agricultural prices continued to rise, stimulating a general price increase. New and more severe restrictions on the domestic consumption of meat failed to solve the problem, but by adding the Pampean bourgeoisie to the government's opponents, they worked the miracle of producing a unanimous chorus of opposition just three months after the new government had assumed office.
The situation took an important turn when the president seized an opportunity provided by the conflict between the Interior Minister and his undersecretary to secure the resignations of both, as well as that of the Economy Minister. After a series of maneuvers and delays, Brigadier General Mario Cordón Aguirre, on active duty in the air force (the most nationalistic branch of the armed forces) was named Minister of the Interior. Ferrer moved in as Economy Minister. These changes, some reshufflings in the provincial governments, and Levingston's obvious efforts to acquire his own base of political and military support, showed the commanders in chief that the decision-making scheme they had sought to implement was not at all the one that Levingston had in mind. Far from content to accept the circumscribed role assigned to him, Levingston intended to assume leadership of the nationalist phase of the BA and to wrest control of the army from Lanusse. The commanders in chief (especially Lanusse, whose personality, civilian backing, and weight within the army made him primarily responsible for the situation) had to find a solution to this unexpected problem. This would involve some difficult choices. On the one hand, Levingston's ouster could no longer be reconciled with illusions of reviving the BA, a conclusion that many paternalists and nationalists within the armed forces still found difficult to accept. On the other hand, Levingston was launching what remained of the BA on a nationalist course, the implications of which would soon become evident. This thankless dilemma served to prolong the Levingston government from the October 1970 cabinet[*]
changes until March 1971, an extraordinarily long interval considering the circumstances.[*]
3. The Hour of the People
On November 11, 1970, the Peronists, the Radicals, and several minor political parties issued a joint statement entitled, La Hora del Pueblo (The Hour of the People). The coalition announced by the signatories of the document came also to be known by that name. The statement called for a quick return to democracy and contained generic allusions to a future characterized by political stability, a more equal distribution of income, and protection of the nationally owned sectors of the economy. On the one hand, in demanding elections with "neither vetoes nor prescriptions," the document implied a commitment by the Radicals to supporting the reentry of Peronism into an electoral arena from which it had been excluded in various ways for the past fifteen years. On the other hand, by formalizing pledges to respect when in government the rights of minority parties, the document expressed a commitment by Peronism (which in the eyes of many was the only party likely to violate those rights) not to take undue advantage of its electoral clout.
La Hora del Pueblo had been a long time in the making. As it became clear to party leaders that the coup, in the eyes of paternalists, nationalists, and liberals alike, had been carried out to suppress all political parties for an extended period of time, many discovered a common interest in restoring the electoral system. This stance, to be sure, had not prevailed before 1966, when no party of even minimal importance had
failed to collaborate in promoting a military coup,[*] each presuming that the intervention of the armed forces would install its personnel in the government and/or constitute it as an eventual electoral heir. By 1970, however, the major political parties[†] seemed to have learned from experience: their demands for a return to elections were accompanied by mutual promises to play by democratic rules both before and after being seated (or not) in the government.
Arturo Mor Roig of the Radicals and Daniel Paladino of the Peronists were the most important figures in reaching this agreement. There is little doubt that the timing of the public appearance of La Hora del Pueblo (and its open appeal to the armed forces to reject Levingston's project in favor of democratization) was the result of conversations between the top leaders of its constituent parties and the current of the armed forces led by Lanusse.La Hora del Pueblo represented an important convergence. On the one hand, growing social tensions and the exhaustion of the "Argentine Revolution" had convinced the more astute supporters of the BA that it was necessary to decompress the situation by making government positions accessible to such parties as the Radicals and the Peronists, which together could count on the backing of a substantial majority of the population. On the other hand, the huge electoral majority constituted by the combined supporters of the Peronists and Radicals could serve as a safety valve for the armed forces as well as for the sectors of the bourgeoisie which, sobered by the incongruities of the paternalists and the adventures of the nationalists, were rediscovering their "democratic vocation." Not only were the Peronists pledging not to alter the rules of the game if and when they won an election,[‡] they had also agreed with the Radicals on a generic program of moderate redistributive nationalism that coincided
with the policies favored by the local bourgeoisie and many military officers.[*]
Widespread disillusionment with military control of government, and the corresponding rise in the prestige of politicians, formed the context in which La Hora del Pueblo emerged and signaled the return of the parties as important actors in the processes that were unfolding.[†] The reappearance of the parties and their de facto acceptance as actors in the political arena marked another turning point in the process we are analyzing. Together with the resurgence of popular activation and the significant gains in autonomy from the state apparatus that were being made by various organizations of civil society (particularly the unions), the reemergence of the parties marked the point at which the BA, according to the definition proposed in chapter 1, ceased to exist. The state, to be sure, was still authoritarian, but it was no longer the BA that has concerned us thus far. Its exclusionary character was dissolving rapidly, and the unstable and swiftly changing authoritarian hybrid typical of the transition took the place of its failed predecessor.
Once the BA is implanted, the politicians banned, and the excoriated politics suppressed, the politics that remains—aside from tugs of war among the currents in the state apparatus—consists of the raw expression of demands not easy to link to any general interest. With the political and economic exclusion of the popular sector, moreover, the articulation of these interests is monopolized by organizations that are notable for their skewed class composition. The exclusion of the popular sector and the suppression of political parties do more than reduce the number of actors in the political arena. Politics in the BA is an opaque politics of and within bureaucracies, in which highly disaggregated interests flow through the interstices of the state institutions, corroding the technical and neutral image that those who speak for the BA try so hard to create. Meanwhile, the hushed politics of an opposition still silenced beneath the mantle of repression and tacit consensus
can be heard only in places, and through signals which are not readily accessible to ears attuned only to conventional politics.
Two fundamental consequences result from the subsequent crumbling of the BA. The first involves the reappearance of political actors with characteristics, strategies, and goals very different from those that monopolized the scene under the BA. These actors include not just the political parties, but also a diverse set of neighborhood associations, church groups, professional organizations, regional movements and even, in the case studied here, guerrillas. Arising from this first consequence is a second one: a tremendous expansion of the political arena to encompass a broad range of actors in society. This expansion also involves the conversion of many social organizations, such as the ones just mentioned, into theaters where contending groups try to secure the positions that they deem important for affecting the direction of the political process. In the wake of the controls imposed by a BA, society recovers vigorously, inventing new institutions while repoliticizing and giving new meanings to old ones. Politics under the transitional authoritarian regime becomes immensely more complex than it was under the BA. From the perspective taken in this book, which considers the state first and foremost an aspect of the relations of domination within society and only secondarily a set of institutions, the transition from BA rule involves crucial changes in the relations of social domination. These changes have profound reverberations in the state apparatus and in the policies its incumbents do or do not decide to implement.
The collapse of the BA and the reappearance of the political parties thus resulted from (and in turn greatly encouraged) the repoliticization of most of society in the direction of strong opposition. The agony of the Levingston government and the failure of its efforts to resuscitate the BA were the obverse face of a process that radically changed the relations between state and society that had existed under the BA. This tumultuous, uncertain and ultimately fateful process is the theme of the rest of this book.
4. The "Nationalization"—and Collapse—of the BA
The appointment of Ferrer to head the Ministry of Economy and Labor gave the nationalists, at long last, access to this part of the state apparatus. Ferrer and most of his collaborators did not come from the nationalist right; they were developmentalist técnicos with a reformist
orientation. Like the liberals, they had international links, but these were more with development organizations like the UN Economic Commission for Latin America, the Andean Group, and the Interamerican Development Bank than with transnational corporations and international financial agencies. The nationalism of this group was different from that of Levingston and his current, who had few connections with and a marked antipathy toward all sorts of international organizations and considerable hostility toward big business per se. Nevertheless, Ferrer and Levingston shared a commitment to the tutelage of national capital, moderate income redistribution, close control of transnational firms operating in the domestic market, and the expansion of the state apparatus, including as a producer. Such programs, they hoped, would generate broad popular support for the ideology of national invigoration which they held in common.
The goals of the new economic team are summarized in the National Development and Security Plan for 1971–75, which replaced the earlier one prepared by the Onganía government. This document, while hardly innovative in many respects, evidenced considerable concern for protecting national enterprise and for promoting the state apparatus as a direct producer, particularly of industrial inputs.[*] The plan also provided for the creation of a public agency to support small and medium-sized firms and to promote domestic capital formation, with a view toward equipping local entrepreneurs to compete and negotiate more successfully with transnational capital.
Both the development plan and Ferrer in his inaugural address were careful to stress the importance of private initiative and to insist that transnational capital was welcome—in economic activities to be delimited by the governments.[†] These ideas were soon converted into policies:
import duties were raised, signaling a strong emphasis on the protection of local industry; the National Industrial Bank was transformed into a National Development Bank with expanded resources for medium- and long-term financing of industrial projects; several investment projects were approved for the production of industrial inputs; and a law was passed obliging state enterprises to buy preferentially from local suppliers. None of these policies was in fact detrimental to the upper bourgeoisie or to transnational capital already operating in the domestic market. The same could not be said for potential new foreign investors, but there were few who still found Argentina an attractive markets.[*]
Despite the fact that industrial capital benefited (at least in the short run) from these policies, toward the end of 1970 the UIA and other organizations of the upper bourgeoisie launched a bitter campaign against them. They denounced in a typically overdramatized tone the statism of the new policies, arguing that it foreshadowed the suppression of "freedom and private initiative" and, ultimately, the arrival of "totalitarian collectivism." At the same time, they criticized the government for its inability to control the popular activation—above all (once again) in Córdoba.[†]
Partly because of policies that for the first time seemed seriously concerned with raising the incomes of the best organized segments of the popular sector, Ferrer's administration managed to reduce the number of strikes declared by the national unions.[‡] At the same time, Levingston and Luco entered negotiations with a "non aligned" group of union leaders. These leaders, in large measure successors to the[*]
participationists, were as incapable as ever of delivering the CGT and its affiliated unions into the hands of the government. The Vandorists, in another déjà vu, retained a firm grip on the CGT, and it was with them that the nationalists would have to deal if they wished to acquire an organized base of support. But the Vandorists—worried by the activation of their rank and file and now under pressure from Peronism, whose expressions of opposition to the government ranged from La Hora del Pueblo the guerrillas—agreed only to a kind of cease-fire, which took the form of a temporary decline in strike activity and some moderation of the CGT's economic demands. This response was a far cry from the active support that the nationalists sought from the unions.
The CGE, which had decried the concentration and transnationalization of capital that had taken place under Krieger Vasena, could not but applaud the nationalist-statist aims of the new government. Tutelage of national industry, stimulation of internal consumption, increased state investment in industry, and various direct and indirect subsidies to the local bourgeoisie were, after all, policies that the CGE had long advocated. Furthermore, as we saw before, the CGE had denounced since 1967 not only the domestic expansion of the "international monopolies" and the government's indifference to "denationalization," but also the "financial suffocation" of local capital that reinforced those processes. It was no secret that transnational capital operating in the Argentine market received a substantial part of its financing from the domestic financial system, and that its intimate links to that system, together with its solvency, allowed it access to a disproportionate share of the cheapest available credit. It was against this background that the government made a decision that deeply antagonized transnational capital and the various bourgeois factions linked to it: it decreed that any future increases in bank assets available for lending would be channeled exclusively to nationally owned firms.[*] Bank credit for foreign firms was virtually frozen by this decree and, in view of the significant inflation that now prevailed, it began to diminish rapidly in real terms. Foreign enterprises would now have to obtain new credit abroad, which the Central Bank facilitated by adopting a liberal policy of swaps. This mechanism produced an influx of short-term foreign capital that greatly
increased the public sector's foreign debt. Since the Argentine government guaranteed such transactions, transnational corporations could supply their subsidiaries with working capital whose repatriation was protected against exchange fluctuations. In short, the government's new credit policies succeeded in giving local capital a greater share of domestic financing, but only at the expense of encouraging transnational capital to acquire a rather large debt to itself that was guaranteed by the Argentine state. Under the circumstances, these arrangements were an excellent, no-risk transaction for transnational capital and a source of severe indebtedness for Argentina.
Nevertheless, the discrimination against foreign capital embodied in these policies violated one of the sacred precepts of orthodoxy and gave rise to a chorus of protests. It soon became clear, however, that the government's credit policies were only the beginning. Levingston loudly denounced "distortions" which, even in the state banks, had benefited the "International monopolies" at the expense of "national enterprises," and he announced that the government was contemplating an investigation of all banks and financial institutions operating in Argentina. These episodes, the angry criticisms directed at them, and certain expressions of vehement support for the "anti-monopolist" and "anti-denationalizing" implications of existing and subsequent policies moved the center of gravity from the economic team to the president and his immediate collaborators.
It was clear that Levingston intended to create a political movement—not a party—to support and prolong his presidency. In December 1970 he unveiled the "Bases of the Political Plan," which proposed "a profound effort to create and consolidate a national and revolutionary spirit," again made derogatory references to the "old politics," and stressed the importance of "achieving popular consensus to facilitate revolutionary action." These objectives, the document continued, would necessitate the indefinite extension of prohibitions against political party activity and a search for "alternatives that will assure the continuity of the philosophy of the Argentine Revolution." The press received these and similar pronouncements with a mixture of alarm and sarcasm: Levingston really sounded ridiculous. A more aggressive response came from the parties grouped in La Hora del Pueblo, which, in a public statement addressed to the armed forces, termed the political plan a "deplorable document" of "continuist design" that made a mockery of the reasons that had been given for deposing Onganía. The cabinet changes, the economic policies, the virulent attacks on the political parties,
and the calls for the creation of a "revolutionary spirit" to nourish the forthcoming movement elicited from most of the media a condemnation of the "continuist adventure." The armed forces, the media insinuated, had created this Frankenstein, and it was up to them to destroy it.
Given the resurgence of the political parties, the hostility of nearly all organizations of society,[*] and the massive public opposition to the government, efforts to excite the above-mentioned spirit and to produce the longed-for movement were obviously futile. How, then, should they be understood, apart from the personal predilections of Levingston and his closest collaborators? Many of the nationalists' policies had emerged in response to those of the Onganía government. Above all, the transnationalizing and efficientist orientations of Krieger Vasena and Dagnino Pastore had produced a strong nationalist reaction in the armed forces and in many social sectors. This reaction gave rise to the view that the national entrepreneurs who controlled the smaller and less dynamic firms were ready to lead, in alliance with a nationalist-controlled state, an alternative pattern of capitalist development. The pueblo was expected to lend active but disciplined support to this alliance, which would finally bring about the "national grandeur" that the internationalism of the liberals had so far prevented the country from achieving. These populist illusions found fertile soil not just in the government, but also in the CGE, a substantial proportion of union leaders, and more than a few political parties—notably Peronism, whose dynamic resurgence seemed to demonstrate the viability of the nationalist and populist policies it had enacted while in government some twenty years before. Increased receptivity to such views did not, however, translate into support for the Levingston government. Instead, it helped to stimulate the extraordinary growth of Peronism that will occupy us in the next three chapters.
Meanwhile, Levingston and his close collaborators focused their attacks on financial capital. Employing a moralistic tone containing strong anti-usury connotations, they attributed the numerous economic scandals that surfaced during the period to the "foreignness" of the largest fractions of capital. No fascist solution was in store for Argentina, but some middle sectors and some segments of the armed forces, as
the preceding discussion suggests, were moving closer to a syndrome characterized by nationalism, rejection of big business, appeals to small entrepreneurs exploited by the large firms, moralistic diatribes against usury, strident condemnations of liberalism, and appeals to a pueblo first denied existence as a class.[*] Furthermore—as if to complete a proto-fascist syndrome that would later reappear, as we shall see, under rather surprising circumstances—the same sectors brandished a fervent anticommunism and claimed that only they could put down the "subversive potential" of the popular activation.
But not all hopes for a nationalist alternative for Argentine capitalism were an expression of this syndrome. The developmentalist reformism of Ferrer and his team pointed toward something closer to European social democracy. But the structural and political conditions prevailing in Argentina were even less auspicious for this alternative than for the implantation of a fascist state. Accordingly, the economic team, initially the driving force behind the government, found itself compelled to coexist with the particular version of nationalism upheld by Levingston and his immediate collaborators. In this uncomfortable position, and under heavy fire from the upper bourgeoisie and most of the media, the economic team greeted the coup that deposed Levingston with obvious relief.
In its final months, the Levingston government reached a level of confrontation with the upper bourgeoisie that went substantially beyond the one contemplated by many of those who advocated a nationalist solution, including Ferrer and his team and the CGE. As noted in chapter 1, most of the firms affiliated with the CGE were small or medium-sized, technologically backward, nationally owned, and without links to transnational capital. Few of the CGE's leaders controlled the large, oligopolistic enterprises which, according to the definitions proposed in chapter 1, would have qualified them as members of the upper bourgeoisie. Rather, the CGE leadership came largely from firms of a still different order, which reflected the position of some segments of the local bourgeoisie in Argentina's capitalism: they constituted an ascendant fraction within the bourgeoisie, in control of dynamic, medium-sized, and often recently created enterprises using modern technology, with numerous backward and forward linkages to the TNCs. The economic interests of these fractions are harmed, as are those of the rest of the local bourgeoisie,
when state tutelage is withdrawn and when discrimination against transnational capital is eliminated. These changes allow transnational capital to expand its operations in the domestic market, and contract it for parts of the local bourgeoisie. They also strengthen the TNC's bargaining position with respect to the ascendant fractions of the local bourgeoisie in the continuous renegotiation of the latter's subordinate linkages to the former. In such circumstances, those fractions, not in spite of but precisely because of their close links with (and ultimately their dependence on) transnational capital, may become an influential nationalist voice. This voice expresses the specific grievances not so much of the ascendant segments as of the weaker, and more properly national, layers of the local bourgeoisie. The willingness of the ascendant segments to take nationalist positions results in part from a perception that the entire local bourgeoisie shares a common interest in restoring state tutelage and in checking the unfettered expansion of transnational capital. It is also reinforced by the prior existence in Argentina of an organization—the CGE—that had already formed around convergences within the local bourgeoisie as a whole. Nevertheless, the dynamic segments of the local bourgeoisie are so deeply intertwined with transnational capital that there is a point beyond which this nationalism will not be taken. The pursuit of a stronger bargaining position with respect to transnational capital in no way entails excluding it from the domestic, market. Any such exclusion would provoke what these ascendant fractions, together with the whole bourgeoisie of which they are a part, desire least: the collapse of the economy and/or a leap toward some kind of socialism. There exists for these fractions a delicate balance between improving their bargaining position and precipitating this disaster. Furthermore, they feel that in order to preserve this balance it helps to have strong influence over a state apparatus that provides them with tutelage but at the same time prevents "nationalist excesses."
Levingston's attacks against transnational capital transgressed the limits of this bourgeois nationalism. Consequently, his appeals to the local bourgeoisie to rally behind his government were met with an eloquent silence. There are indications (such as the expressions of support he received from some provincial industrialists' organizations) that Levingston's appeals reached the weaker and most authentically national fractions of the bourgeoisie, but this support mattered little in the political process. In fact, Levingston's assault on transnational capital encouraged the CGE to explore the other prominent alternative: the class alliances that revolved around the electoral road embodied in La
Hora del Pueblo . The union leadership, which also wanted to keep a prudent distance between itself and the government, reached a similar conclusion. The resulting rapprochement between the CGE and the CGT was closely related to the growing activity of the parties of La Hora del Pueblo, which in February 1971 published a new manifesto urging elections and reiterating their promises of fair play. It also implied that these parties were prepared to grant guarantees to the currents in the BA and in the upper bourgeoisie that would support the political solution they were advocating. These activities were in turn connected to the coup against Levingston that was in progress. La Hora del Pueblo offered the arguments—and the votes—to make palatable what was now inevitable: that the armed forces and the bourgeoisie would shelve the aspirations that had survived Onganía's overthrow, issue the BA's death certificate, and retrench to salvage their fundamental interests.
Like Onganía, but more rapidly and in more critical circumstances (including a rapidly deteriorating economy), Levingston was isolated by forces that united tactically in spite of their disagreements over less immediate goals. And again, as with Onganía, it was events in Córdoba that gave the Levingston government its final push. Social conflict, as noted above, had grown more widespread and intense toward the end of 1970 and the beginning of 1971. In February 1971, Levingston secured the resignation of Francisco Manrique, the Social Welfare Minister, who was the last remaining cabinet member close to Lanusse.[*] Levingston also forced the governor of Córdoba to resign, replacing him with one of the most reactionary members of the very reactionary right wing in that province. The new governor began imprudently with a virulent diatribe against the political activation in the region just as a new explosion of strikes and factory occupations was taking place. These events culminated in a new uprising in the city of Córdoba that was no less widespread and violent than the one of the previous year but which involved significantly more radical leadership and slogans. If Onganía's apoliticism and his (more or less willing) support for the efficientist economic policies had produced a massive and violent reaction, Levingston's nationalism had fared no better.
With the rapprochement among the armed forces, the CGE, the CGT, and La Hora del Pueblo, and with the upper bourgeoisie now
seeking only to consolidate defensive positions, the second Cordobazo was the last straw for the military liberals. The issue was no longer to "achieve the goals of the Revolution," but to find bases for negotiations that could guarantee reasonable terms for the liquidation of the BA and for the withdrawal of the armed forces to their "specific functions." After a week, Levingston was deposed. At that point the armed forces, incapable of reviving the BA and deserted by a bourgeoisie that had lost the last vestiges of confidence, began its retreat under a liberal leadership that extended—at last—to the apex of the government.
5. The Nationalist BA Exceeds its Limits
There can be little doubt that a lack of political acumen contributed greatly to the demise of Levingston's government, as it had with Onganía's. But other, less circumstantial, factors were also operating in that direction.
Following the 1966 coup, several factors enabled the paternalists to gain important positions in the institutional system of the state. Among the most important was the recent institutional history of the armed forces, which made Onganía the almost obligatory choice for president in 1966. This did not prevent the liberals from controlling the economic apparatus (albeit after a six-month delay), but the weight of the presidency—and, above all, evidence that Onganía and his current intended to assume full control of the government—left the upper bourgeoisie and transnational capital with serious doubts. On another level, the relative mildness of the economic crisis that preceded the implantation of the BA in 1966, together with the special characteristics and comparative advantages of Argentina's major export sector, allowed economic growth to be resumed much more rapidly than has been the case in other BAs. In one important sense the economic program was too successful, since it encouraged the paternalists to press almost immediately for redistributive policies that clashed with the interests and demands of the upper bourgeoisie. This attempt, together with the paternalists' clumsy but worrisome efforts to co-opt the unions, created serious apprehension among the upper bourgeoisie and its allies—not so much because these efforts were likely to succeed, but because they had the potential to destroy the achievements of the normalization program. Accordingly, the leading periodicals, liberal military officers, liberal técnicos, and the organizations of the upper bourgeoisie launched a
relentless attack against the paternalists. But with the departure of Krieger Vasena, the paternalists gained a high degree of control over the institutional system of the BA. Their demise, however, occurred soon afterward, with the opening of the Pandora's box of a massive popular opposition that greatly sharpened preexisting conflicts within the BA.
The nationalists, with Levingston at the helm, rose to government with this opposition already in full swing and fell as it reached new and violent heights. In the first part of its short term in office (up to the departure of McLoughlin), Levingston's government was a chorus of dissonances: Moyano Llerena's poor imitation of Krieger Vasena's program, the efficient performance of Ferrer and his team in the Ministry of Public Works, the fruitless efforts of the military junta to maintain Levingston as its delegate, and the inconsistencies of Levingston's efforts to demonstrate social sensitivity while mobilizing society in pursuit of a hierarchical vision that was at least as hostile to politics as Onganía's. Like the paternalists, the nationalists expelled the liberals in the closing moments of their government, assumed a high degree of control over the state apparatus, and moved according to their ideology. The local bourgeoisie and the unions declined to follow them to the precipice, and the little confidence that remained among the upper bourgeoisie and transnational capital evaporated. Moreover, once the nationalism of Levingston and his current was transformed from an ethereal discourse into discriminatory and statizing policies, numerous fractions of the local bourgeoisie also added their voices to the opposition.
First under the paternalists, and later under the nationalists' government, confidence was shaken so severely that normalization was aborted. Moreover, the nationalism of the Levingston government, despite being massively rejected by the population, fueled a popular activation whose main ideological axis was an exasperated nationalist reaction to the transnationalization and "loss of national spirit" that were alleged to have taken place during the preceding years. Mindful of this reaction, segments of the upper bourgeoisie, until recently the strongest support of the BA, now desired its euthanasia. The loosening of the social relations of domination (or, according to the definitions set forth in chapter 1, the beginnings of a crisis of social domination) that began in the last year of Onganía's government added a note of urgency to this discovery. As workers became more "undisciplined" in factories and in the streets, national union leaders—threatened by the same processes and in an attempt to absorb them—lodged high wage and salary demands to which the government could respond only with vacuous statements
and promises. The BA that the liberals and the upper bourgeoisie, with the grudging collaboration of the paternalists, had launched on a triumphant voyage in March l967 had sailed into stormy seas. By the end of 1970, its supporters were trying to guide it safely to shore before the winds blew in even more dangerous directions.
6. Economic Misadventures of the Nationalist Turn
By the time of the Cordobazo, industrial production was approaching the limits of installed capacity. Private investment in machinery and equipment had risen substantially in the first half of 1969, and direct foreign investment also increased. These trends seemed to indicate that the state apparatus could relinquish its role as the motor of economic activity and embark on the long-term consolidation of the achievements of the normalization program. We have seen, however, that such possibilities vanished abruptly with the events of May 1969. The Dagnino Pastore administration, and to a lesser extent that of Moyano Llerena, managed to cushion some of the impacts of the Cordobazo, but the data presented in chapter 9 demonstrate that this episode was as much an economic as a political turning point. Other variables support this assertion. Imports rose as a consequence of the economic growth experienced during 1968 and 1969, exhibiting (as is typical in these productive structures) a high elasticity in relation to domestic economic growth. After the Cordobazo, however, imports took a speculative leap as forecasts of political, monetary, and exchange instability appeared. As a result, 1969 closed with a large deficit in the balance of payments and a negligible balance-of-trade surplus.
Confronted with an overheated economy, Dagnino Pastore's team, as we have seen, clamped down on credit and the money supply. At the same time, it attempted to relieve social tensions by allowing real wages and salaries to rise above the depressed levels prevailing in the second half of 1968 and the first half of 1969. As we saw in chapter 5, however, these increases did little to pacify the popular sector. They also produced an important rise in consumer demand that was hardly congruent with the attempt to cool the economy. Moreover, the second half of 1969 saw the rise of a new complication: a significant rise in domestic beef prices, the result of a strong increase in international meat prices and a reduction in domestic cattle sales. In Argentina, beef is not only the mainstay of the popular diet, it also exerts an important lead effect
on the prices of its substitutes. In the uncertainty produced by the Cordobazo, the rise in meat prices and its impact on the prices of other basic foodstuffs worked together with pressures on the balance of payments (and consequent expectations of a new devaluation), and with wage and salary demands (and the government's apparent inability to contain them), to give inflation, which in the triumphal moments of the Krieger Vasena period some had thought was gone for good, a strong upward push. The Dagnino Pastore and Moyano Llerena ministries placed restrictions on meat sales and prices, temporarily slowing the price hikes. These controls, however, failed to strike at the root of the problem, and they launched the Pampean bourgeoisie and its organizations on a new round of protests.
These darkening expectations were improved little by Moyano Llerena's inexpedient replication of Krieger Vasena's program at a time when the relation of social forces had changed profoundly. Dagnino Pastore finally began to stress the need for a new push toward deepening the productive structure. He advocated launching an ambitious program of import substitution directed mainly at the intermediate and capital goods that had accounted for a disproportionate share of the rise in total imports. Such a program would require large investments, not, as in the previous period, in the physical infrastructure, but in productive activities capable of advancing substantially the vertical integration of Argentine industry. But with the negative expectations that prevailed after the Cordobazo, there was little prospect of increasing private domestic investment, which went instead toward defensive, short-term placements. Still less could be expected from private transnational capital; as we have seen, medium- and long-term inflows from abroad fell abruptly after May 1969. Public investment remained the available option. By 1970, however, the fiscal situation began to deteriorate. Moreover, any move to channel state investments toward directly productive activities would have antagonized the upper bourgeoisie. The latter had not objected to the infrastructural investments of the Krieger Vasena period, but it would be another matter—the excoriated "statism"—should the state turn to direct investment in productive sectors. In short, Dagnino Pastore and Moyano Llerena, for all their nuances, tried hard to follow the path that Krieger Vasena had taken. In the new political and economic context, however, their efforts were doomed to exacerbate the crisis they were trying to mute.
This was the situation of the Argentine economy when Levingston moved to imprint a nationalist stamp on the Argentine Revolution.
Disregarding the orthodox restraints accepted by his predecessors, Ferrer decided that the above-mentioned investments would flow not only from private initiative but also from the state apparatus, and he announced that the state would also provide active tutelage for private national capital. He accompanied these decisions with a visible (and unsuccessful) effort to dispel misgivings[*] arising from the "leftist" views he had expressed in his academic publications, and from his past performance (1958–60) as Economy Minister for the Province of Buenos Aires, when he had tried, and failed, to impose a tax on potential land rent. Accordingly, one of his first decisions was to lift the restrictions on domestic sale and prices of meat. This measure received from the Pampean bourgeoisie some applause, but nothing compared to their rage when, in response to rising inflation and meat prices, Ferrer imposed controls even stricter than the ones he had just removed. Other policies enacted more with an eye toward relieving social tensions than ensuring a consistent economic program included substantial wage and salary increases, the (unfulfilled) promise to reinstitute unrestricted collective bargaining, and a loose monetary policy. Finally, the decision to encourage swap transactions soon led to serious strain on the foreign exchange reserves of the Central Bank.[†] All of these factors made it easy to foresee new devaluations and inflationary spirals.
The effort to move the Argentine Revolution in a nationalist direction and the misgivings of the Pampean and upper bourgeoisies about Ferrer's appointment as Economy Minister reinforced the negative tendencies that already existed, and made October 1970, the month in which Ferrer assumed his post, an economic conjuncture almost as
important as the Cordobazo. Data presented in chapter 9 show that this month was a major turning point for such crucial variables as the rate of inflation and the prices of meat and other foodstuffs. Moreover, it was in October 1970 that black-market rates for foreign exchange began to rise sharply in relation to official quotations. The same month saw an analogous leap in the rate of the U.S. dollar on the futures market.
When early in 1971 Levingston removed all doubts about the direction in which he intended to move the "Revolution," these unpromising initial reactions gave way to accelerated economic deterioration. Suffice it to say that while the budget prepared for 1971 assumed a 15 percent annual rate of inflation, prices rose by 12 percent in the first three months of that year alone. Accordingly, the "fiscal discipline" of the 1967–69 period gave way to the budgetary chaos of 1971–72, which we shall examine in chapter 9. These problems were compounded by the unions' renewed capacity for pressure, reinforced by what the bourgeoisie understood as the "dangerous demagoguery" of a government seeking support for its nationalist project. Expectations fell still further with the prospect that unrestricted collective bargaining (promised for the summer of 1971) would result in substantial wage and salary hikes and in new rounds of inflation. It was to preclude this possibility that Ferrer, contrary to his previous announcements, issued a decree imposing a 12 percent limit on the wage and salary increases that could be "freely" negotiated. This decree was greeted angrily by the unions and the popular sector but did little to calm the bourgeoisie, which had more than enough to worry about with the nationalist policies being enacted at the time.
The attempt to set the BA on a nationalist course came at a time of deep political crisis and particularly unpropitious economic conditions. Moreover, a number of crucial variables—in a pattern similar to that observed just prior to the 1966 coup and immediately following the Cordobazo—responded with remarkable speed and sensitivity to Ferrer's appointment as Economy Minister and to the signals that the government was taking a nationalist turn. So rapid was this response that it coincided with Ferrer's first and largely ceremonial acts, making it even less likely that the nationalists' policies would succeed.