False Economy - Alan Beattie [13]
Failure to use the system meant the system was replaced. The Depression brought FDR and a more active federal government to the United States. To Argentina it brought dictatorship. Even had Argentina's elite grasped the nature of the problem, by the 1930s it would most likely have been too late. Because it was still a big borrower, not a creditor, slamming controls on the banking system would merely have scared away what few foreign investors had not already taken their money and run. Having failed to prepare or to respond, the entire establishment suffered a loss of credibility. It had predicated its legitimacy on the basis of a simple model, borrowing from its food shoppers, who were now much more wary.
The traditional politicians had taken a republic and turned it back into a colony, but without even the benefits a true colony might have enjoyed. London reacted to the crisis in international trade in the 1930s by granting "imperial preference"—allowing imports from its remaining overseas possessions while generally excluding those from the rest of the world. To maintain its meat exports to Britain, Argentina had to sign a treaty making a host of concessions to British companies, including some that made it easier for them to take their profits out of Argentina.
When export demand plunged again as a result of the Second World War, the end was in sight for Argentina's experiment with liberal democracy. In 1940, one of the brighter government ministers of the time, Federico Pinedo, proposed a smaller-scale Argentine version of America's New Deal, including extending credit to manufacturers and cutting import tariffs on the raw materials and other basic inputs they needed. But it died in petty infighting among Argentina's uninspiring political elite.
Liberal democracy and liberal economics seemed to have failed, just as they had in the Weimar Republic. The result was similar in direction if not in extremity. The president was kicked out with the help of the army, and something close to political chaos replaced him, with the military having to suppress disgruntled workers protesting in the streets. Nationalism and self-sufficiency became attractive (at least emotionally), while hapless democratic governments passing power ineffectually from one to the next did not. The new authoritarians wanted the country to take its destiny back into its own hands.
The man who came to embody the new doctrine, Juan Peron, was from the army, the natural home of authoritarians. One of the leaders of a military coup that replaced a civilian government in 1943, he became president in 1946. His direct style contrasted sharply with the patrician sophistication—which had come to seem like sophistry—of the civilian politicians. Peron's populist appeal was helped by his rise to prominence within the army, one of the few Argentine institutions that could reasonably claim to promote talent rather than privilege.
Peron projected an assertive, disciplined nationalism for the new Argentina. Though his power was confirmed in an election, faint overtones of fascism grew stronger once he was in office. He encouraged a cult of personality to grow around him, quite unlike the faceless elite that had run the country in the past. He also urged Nazi-style economic self-sufficiency and "corporatism"—a strong government, organized labor (under strict limits set by the state), and industrial conglomerates jointly directing and managing growth.
These ideas were bruited about in the United States, too, but few took them seriously. Like Argentina—but unlike Europe—America, little unionized, never had much time for socialism or communism. Roosevelt managed to co-opt all but the most radical labor activists into the coalition that supported the New Deal. There was widespread discontent with the international economic system, but belief in U.S. democracy held firm.
Had America gone the same way as Argentina, it is not hard to see how an equivalent of Peronism might have arisen. Strains of thought in movements like the America First Committee,