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Economic decisions that can’t be politized
September 15, 2008
The major impact of peronism was always registered in the field of politics, as a heritage of the great capacity demonstrated by its founder in this area. But as also in many other areas, a disproportionate force in one sense always has to pay a price in another sense.
By Eduardo Viola y Héctor Ricardo Leis

The major impact of peronism was always registered in the field of politics, as a heritage of the great capacity demonstrated by its founder in this area. But as also in many other areas, a disproportionate force in one sense always has to pay a price in another sense. Peronism maintained itself in the last decades as the only historic movement worthy of this name, right because he was the one who best handled the friend-enemy-relation in the field of politics.

In this sense, the success of peronism is paradigmatic as it was the only movement that was successful in dividing the nation in a durable way into irreconcilable parts that are euphemistically called "peronists and antiperonists". The political strength of peronism led this movement to perceive the reality from a single-minded political perspective that underestimates other fields, especially economy. It's not a coincidence that the current government protects those in charge of political economy who treat as an enemy of the people everybody who defends a maximum degree of scientific neutrality of the INDEC at the moment of calculating the inflation rate. The manipulation of those basic statistics of the country's economic life seems to be something natural in the mind of someone who extremely politizes all social relations. The first consequence of reducing everything in the economic field to politics is the ignorance of the basic laws of how market economy works.

It's not that much about criticizing or praising the social and redistributive policy of the government; the welfare state can be one alternative among others provided that it has policies respecting the principles regulating economy. Market economy can be politized, but there is a limit. Especially in the period of globalization the most lethal characteristic of populist conception of politics is its incapacity to measure the economic consequences of its ignorance in that field.

The administration of Cristina Fernández de Kirchner transforms, with the greatest tranquility, complex economic decision processes into fast political decision processes. Like this the administration wasn't able to open any space for an earlier debate and deep economic analysis of the pros and cons of the resolution 125 that aggravated the conflict with the farmers. Right now the same is happening with the nationalization of Aerolíneas Argentinas and the payment of the debt with Club of Paris. Both decisions are taken on a political basis without specifying to a minimum degree its economic basics. It's not astonishing that the markets react badly towards those measures. They correctly feel that those aren't measures helping the country's economy, but only helping the administration's politics.

The administrations of Menem and the Kirchners serve as examples for the economic ignorance upon which we want to call the attention. Both started their period saving the country from an imminent economic catastrophe. But this didn't indicate a deep understanding of the contemporary world's economic laws. Even when they achieved to save the economic situation from setting on fire, those administrations adapted economic privatizing policies, in one case, and nationalizing, in the other, with the same vision reduced to politics that made them consider market economy as a source of political power instead of seeing it as an irreplaceable tool for a sustainable economic development.

Héctor Ricardo Leis and Eduardo Viola are political scientists, (University of Santa Catarina and University of Brasilia) and authors of  "América del Sur en el mundo de las democracias de mercado" (CADAL-HOMO SAPIENS)

Source: Diario Clarín (Buenos Aires)