A great time for malcontents
Until the late 20th century, issues involving human rights, women’s rights, race relations, social justice, the environment and the like were widely regarded as matters that obsessed sandal-wearing bearded weirdies who should not be taken too seriously. Since then, much has changed. In the rich Western countries and their cultural offshoots, what was once the fringe has become the centre. The vacuum left by the implosion of old-fashioned Marxism was quickly filled by people who, after getting over the loss of an ideology they had found inspiring but which, after its devotees had slaughtered at least a hundred million men, women and children, failed dismally to deliver the promised utopia, decided to devote themselves to first criticising the society they lived in and then doing whatever they thought necessary to make those in power deal with what they regarded as its worst flaws.
For some reactionaries, the activists they accuse of undermining society are simply Marxists in a new guise and much is made of the, in their view, baleful influence on them of the Frankfurt School and the Italian thinker Antonio Gramsci. They take it for granted that, guided by a Maquiavellian cabal hidden away somewhere, a horde of malcontents are mounting a coordinated attack on the status quo with the aim of replacing the Western democracies with a collectivist tyranny. However, unlike the revolutionaries of yesteryear who carried in their pockets detailed blueprints of what they wanted to bring about, their alleged heirs do not seem to have any particular socioeconomic arrangement in mind and, in any case, many of their objectives are contradictory.
Most of them are campaigning on behalf of specific groups they insist have always had a raw deal, but in complicated modern societies what one group – Muslims, say, or people who want to switch genders – desperately wants often runs counter to the interests of others. Identity politics is divisive by nature, so in the United Kingdom feminists and the influential “trans lobby” are at each other’s throats, Muslims are confronting Hindus and believers in freedom of speech are against not just the individuals who have succeeded in making “hate” illegal, but also the police who would much rather arrest people for being mean to “minorities” than waste their time chasing common criminals. Similar squabbles are taking place in the United States, where new-style racists who want whitey to pay for his and her many sins are currently on a roll.
As was always to be expected, the success enjoyed by campaigners against whatever social wrong, whether major or minor, genuine or merely imaginary, catches their attention is being exploited by a growing number of opportunists. In universities throughout the West, “grievance studies” – which are designed to turn youngsters into militants for a cause the academics responsible for them regard as overwhelmingly important – have flourished to such an extent that they are pushing aside the traditional humanities. The lucrative “human rights industry” has been joined by the even more profitable “race relations industry.” They will soon be accompanied by others based on ecological concerns or, perhaps, the universal right to get free anti-covid vaccines.
Argentina, where there is no lack of social problems which are rather more pressing than the ones troubling more prosperous countries, has yet to become a major cultural battleground. After the military dictatorship threw in the towel, few people bothered to question the moral authority of organisations supposedly committed to defending human rights, the best known of which went on to make plenty of money. They could do this because, after moving from Santa Cruz to Buenos Aires, Néstor Kirchner and his wife Cristina Fernández de Kirchner realised it would be very much in their interest to enjoy their support. For a time this paid off handsomely, but their willingness to serve a blatantly biased political movement has brought them into disrepute; many who until recently were reluctant to criticise them have taken to pointing out that ostentatiously turning a blind eye to the appalling abuses taking place in places like Venezuela, Nicaragua and Cuba, let alone Iran and China, makes an unpleasant mockery of their high-minded pretentions.
As luck would have it, up to now Argentina has offered limited scope to entrepreneurs interested in making money from going on about racial relations, but it would not be that surprising if, thanks to president Alberto Fernández’s bewildering allusion to the “Afro-american descendents” of those immigrants who arrived in boats from Europe he had boasted about when playing host to the Spanish premier, some universities do manage to exploit the government’s interest in the subject by setting up new departments to delve into it and come up with the proper solutions. Even so, it would be astonishing if this country were to find room for a host of “diversocrats” like those who are making a tidy living not just in most major North American universities but also on school boards and in commercial enterprises. In the United States, the source of so many ideological innovations which within days wash up on Argentina’s shores, race is now big business and telling white folk that they all labour under an ancestral curse they will be unable to shake off unless they get expert help can earn you an enviable living.
In the rich Western countries and their cultural offshoots, what was once the fringe has become the centre.
Just how long all this will last is hard to say, but there are signs that in English-speaking countries and France that a counter-offensive is fast picking up steam. This must be ominous for the tens of thousands of young people who have invested a lot of time and money in acquiring degrees in something to which the word “studies” has been appended and could soon find themselves facing a hostile labour market, and for all those expensive specialists in “sensitivity training” who have been hired by academic institutions and business companies to make people of European extraction feel thoroughly ashamed of their allegedly congenital racism. It could also be bad for the politicians, among them Joe Biden and Kamala Harris, who made the most of the upsurge in race-baiting that followed the death of George Floyd; they now run the risk of losing the support of the black community on which the Democrats rely, and the “Hispanic” one, both of which by and large want more and tougher policing in crime-ridden cities such as Chicago where few days go by without several people, mostly black, getting murdered, and have good reason to oppose a purportedly anti-racist movement whose fiercest activists are well-off white college students with a strong taste for street violence.
Argentina’s ‘experts in regulated markets’ are making big bets just at the right time.
Argentina’s business elite are good students of the great Warren Buffett, whose famous advice has become the stuff of market legend: “Be fearful when others are greedy, and greedy when others are fearful.” In our own domestic jargon we’ve coined the phrase “especialistas en mercados regulados” to ironically refer to a group of investors who call themselves businessmen but rather than optimising management have honed their skills on weaving deep networks of influence and capital in order to snap up quasi-state monopolies at discount prices. Interestingly, there’s actually a university in Spain that offers a Master’s degree titled “expert in the economics of regulated markets,” but it’s not totally clear whether the programme at the Universidad Carlos III de Madrid covers the all-important aspect of building strong and long-lasting relationships with a political class that appears to be in constant flux, despite the actors being always the same.
Regardless, our own experts in regulated markets are making big bets just at the right time. Whereas a substantial sector of high society is currently eyeing condos in Miami or Barcelona for their kids, our market movers and shakers are taking advantage of a ravaged economy with some of the lowest levels of investment in the historical timeline. As Tristan Rodríguez Lorredo points out in his weekly columns in Perfil, our current rate of investment is below the rate of the amortisation of capital, which essentially means we are consuming what we have without being able to restock.
Without getting too technical, investment as a percentage of GDP should come in at 24 percent in order to reduce unemployment and poverty gradually, and at 50 to 60 percent in order to grow at an annual clip of four percent. Over the last decade we’ve been stuck around 16 percent and in 2020 we slid below 12 percent. This, Rodríguez Lorredo concludes, is the main reason behind a nefarious vicious cycle of a lack of quality private-sector jobs, a shift toward low-quality jobs with minimal security, increased state spending in social plans and inefficient government jobs which in turn increases the deficit and leads to money printing and resulting inflation. A chart cited by economist Luis Campos on his Twitter account shows private and public sector wages stuck at their lowest level since October 2015 – down more than 30 percent in real terms. Labour in Argentina is extremely cheap right now, particularly if measured in dollar terms.
According to data from the INDEC national statistics bureau, in the first quarter median income for individual earners in Argentina stood at 42,394 pesos. That’s US$423.94 at the official exchange rate or US$249.37 at the black market “blue dollar” rate. For the 27 percent of the working population that doesn’t have to earn a wage but have to rely on their own means for income, the figure is 32,163 pesos. Do the math.
When the going gets tough, the tough get going. Probably the number one specialist in regulated markets of the day is José Luis Manzano, who was the head of the Peronist bloc in the Chamber of Deputies in the 1980s and then Carlos Menem’s Interior Minister in the 1990s. Manzano and his eternal partner Daniel Vila, along with a littleknown multi-millionaire named Mauricio Filiberti, have teamed up to buy acquire Edenor, Argentina’s largest electricity distributor, from Pampa Energía, owned by Marcelo Mindlin, who was close to Mauricio Macri. “[Manzano] received his certificate of real power,” Jairo Stracchia wrote in his weekly review, “he got approval for the acquisition of the largest electricity distributor in the country, Edenor, from the same State to which he has to ask for money in order to pay salaries and with which he has to restructure debts for unpaid electricity, given that that same State doesn’t allow it to hike electricity bills.” As Carlos Pagni points out in a column this week, said investors already own the electricity distribution game in Mendoza, where they owe copious amounts of money to Cammesa, the state-run firm that sells electricity to distributors. Filiberti, who is new to this group, is the one putting up the big bucks, say Pagnis, and he made his fortune selling chlorine to public water sanitation firm AYSA. Experts in regulated markets meet and multiply!
The other biggie right now is the Hidrovía Paranáparaguay river waterway, recently nationalised by the Alberto Fernández administration. “The key 1,635-km portion of the 3,442-km waterway, which transports 80 percent of Argentina’s exports and connects five countries, will be operated by the Administración General de Puertos (AGP) port authority, despite strong objections from the farming sector and the political opposition,” explained commodity focused media group Argus. In the midst of a drought that has reduced water levels, the nationalisation sparks fears of inefficiency just when dredging and maintenance are needed the most, particularly from the sceptical agricultural sector.
It has been in the crosshairs of the Kirchnerites for a while now, who claimed its private control undermined national sovereignty. The rumour is that the government is set tos ubcontract Electro ingeniería — the firm led by ultra-kirchnerite Gerardo Ferreyra — which will in turn bring in Chinese firm Shanghai Dredging. On the geopolitical front, the US won’t be too happy if China has a hand in controlling a key corridor for global agricultural supplies. Others point at old differences between Cristina Fernández de Kirchner and Gabriel Romero, the head of one of the private firms that was in charge of the waterway named EMEPA. During the famous “corruption notebooks” case, romeros aidhew as forced to fork over us $600,000 for the crown during the Kirchnerist heyday. Rumours.
These are justa fewoft helar gest examples ofw ha tisgoingon in an economy that has just been banished even farther from the garden of even, with MSCI downgrading our market to “standalone.” At its most elemental, the argument shouldn’t be about more or less state but about productive investment. The Argentine state, of course, cannot be trusted to do this. Can the private sector? When looking at the biggest market moves, it seems as if they are playing the same games as the politicians.