Argentina's Downfall: Bread and Circuses ... But No Change!

A short while ago the election of Cristina Fernandez de Kirchner elevated her to the presidency of Argentina. Despite the overwhelming result that swept the first elected woman into office following her husband’s term as president, the country remains at a political crossroads. The politics and economics and self-interest of Argentina are hedged between leftist president Hugo Chavez of Venezuela and George Bush.

More evenly dispersed wealth and prosperity for Argentina does not have to be elusive. The country is rich in resources and there exists substantial demand for its goods. However, increased and more equal education seems indicated and overdue. A general pause by the country as a whole to assess the willingness to absorb the tradeoffs required to achieve a universal better state of living is more than overdue. Perhaps the new leader of Argentina will take that pause and properly act on that reflection..

After having spent nearly six months prior to the election in Argentina, one thing is certain. No matter how hard a new president may try to change matters, the facts seem to imply that the majority is too complacent to welcome any major change from the status quo, vociferous noises from a vocal minority notwithstanding. One young person was overheard to say in seeming jest, “What this country needs is a good war!” With the history of violence of several past governments, a wide gap between rich and poor, as well as ingrained cultural patterns spanning centuries, such complacency should not be unexpected.

Nonetheless, from an outsiders’ perspective, certain basics spell renewed disaster for the once-prosperous nation.

In a recent conversation with a bright, educated Argentine student, the young fellow seemed to think nothing of leaving his country. In his early twenties, he intends to live, study, work and earn overseas and save or invest his money in a country “that works.” Little thought was expressed as to the wide and growing gap between the prosperous and impoverished denizens of the Argentine landscape. He provided a perfectly good example that the dwindling middle class aspires only to join the “rich” as long as it can avoid sinking to the morass of “the poor.” The fact that Argentina’s problems have been even further exacerbated by more impoverished immigrants from Bolivia, Peru and other South American nations was explained away by suggesting that, in his view, “Argentina needs a labor pool willing to accomplish unskilled labor others are not willing to do.”

Whether one agrees with the young student’s perspective is somewhat irrelevant. One can agree or disagree with his philosophy and potential course of action. Missing from the entire discussion, however, is the fact that only a miniscule “middle class” exists in Argentina. As in other cultures, the term “middle class” is vague and imprecise. Yet, it is precisely the “middle class” and a functioning, private and governmental infrastructure that are two key elements that produced success in most of the world’s advanced nations. Despite relative growth in Gross Domestic Product, progress has often been stunted in nations replete with a large, wealthy land-owning class, especially in Latin or South America.

Although often disparagingly referred to as a “nation of shopkeepers,” England prospered from the times of Elizabeth I. It expanded most noticeably following the times of Adam Smith and other notable thinkers of the eighteenth century. It was the formation and expansion of the middle classes, its manufacturing base, and its financial acumen coupled with powerful colonial resources and inexpensive labor that propelled England through the centuries.Wealth filtered to the growing middle classes and a working infrastructure in England, as elsewhere in Europe, the United States and now in China and India. The phenomenon is evident world-wide.

A working country’s civil infrastructure does not have to be limited to roads and highways and other facilities, although the lack of these significantly impacts any nation in past or present centuries. Infrastructure can be expanded to include a society’s ability and willingness to provide communications and education, to banking or medical care, and to a general freedom from governmental bureaucracy to impede entrepreneurship and the production and distribution of goods and services.

Argentina may reasonably boast of a classic infrastructure. It certainly has thousands of kilometers of maintained roads and highways, developed airports and docks, and public utilities. It has been in the forefront of South American communications, banking and medical care. Many of those services are owned by foreign entities. Why? Because there does not exist a strong middle class to undertake entrepreneurial risks. The wealthy prefer to keep their capital outside the country, while the poor are too uneducated and have little, if any, capital.

In addition, Argentina’s general production and distribution of goods and services, domestically and internationally, are predominantly hampered by a vast and powerful bureaucracy that strives not for efficiency, but rather for patronage and continued employment.

Beyond infrastructure, a country’s perception and self-perception are equally as important. These factors may have even more influence on the state of a nation’s life than even the most advanced infrastructure. This self-perception and resultant philosophy may be often more responsible than the lack of certain economic amenities. It breeds a lack of concern and indifference on the part of the population, rather than active and positive work and competition and accomplishment.

Despite the brave political words and a rebound from the worst of economic shocks, default on its economic debt, Argentina still suffers from a markedly decreased optimism and a widening gap in confidence in government. Although Argentina has spent the last two decades free from civilian or military dictatorship, people’s attitudes change slowly. Partly, this lack of optimism and confidence stems from Argentina’s continuing practice of turning a largely blind eye to graft and corruption inside and outside of government.

One simple but painful indictor of festering problems stems from the fact that the Argentine government continually runs short of ordinary coins in circulation. This shortage does not stem from lack of materials from which to shape coins. Rather, it derives from a combination of a lack of confidence and graft. Recently, very small denominations starting with the peso coins were actually hoarded by the population. Incorrect as it may be, there is apparently more faith in coins than in paper money, not simply the opportunity to make three to five percent profit on hoarding and reselling small change. Taxi drivers and small kiosks repeatedly fail to have change available for the smallest of purchases for these reasons, as do government institutions like the post office or public utilities.

In an economy based largely on cash transactions, rather than checks, debit or credit cards or electronic banking, this attitude foreshadows only the tip of the iceberg of problems confronting the country. Argentina certainly has most of the necessary computer availability. Most large banks are well interconnected across the country.

However, “most of the people would not know how to deal with automated banking, like paying bills,” one source offered. While that lack may be ascribed in part to a poor educational system, it leaves wide open the door to engage in tax evasion and other forms of corruption. Inefficiency aside, long lines inside a bank branch ironically seem to be positive indicators of solvency, increases in cash and employment to the general populace. That image of illusory prosperity may persist if one ignores the beggars, including very young children, lining the streets asking for pesos. It does nothing for improving personal or national efficiency.

Remarkably, the majority of the population appears to tolerate the long lines and general inefficiency in the infrastructure with barely a sniffle. “Oh, it’s only Argentina,” one property-owning person suggested, trying to explain away whatever daily problems occurred, whether simple plumbing or a citywide taxi strike.

Whether the archaic social custom of closing businesses or schools for two to four hours at midday, or utility or other regular bills are invariably paid in person by cash, these and other customs may be quaint for the tourist, but they are inefficiencies that abound throughout the country.

Perhaps some of these inefficiencies are designed purposely to maintain and increase employment. Perhaps some are reminiscent of an older, more personable way of doing business. Some, perhaps, are steeped in traditions where efficiency counts much less than relaxation and which have resulted in the classic Latin “manana” epithet. Whatever the reason does not stand the country in good stead for its competitive position in a global economy against the materialistic leaders of the world.

Despite rampant inefficiency and visible poverty, many visitors or potential expatriates to Argentina expound at length on its inexpensive and perceived more relaxed, cultural way of life. Often, daily problems with infrastructure or the local population are dismissed by visitors with a shrugged shoulder. Many have to deal with neither. For a few Argentine pesos, hotel or short-term apartment staff can generally accommodate the transient visitor by shielding him from crime, corruption or inefficiency.

“Inexpensive” is certainly true of Argentina when compared to Europe or the United States or even many competing places in South America. This is most definitely true after the currency devaluation less than a decade ago. Spending Euros or American dollars at the official exchange rate easily permits one to overlook many of the vagaries of life in Argentina. Cheaper black market rates, readily obtained from mobile sellers on street corners, can make life even less expensive. Focusing on the natural beauty of Bariloche, the colonial architecture of Salta or the night life and its tango in Buenos Aires is a simple process for a transient visitor. Life in Argentina, however, is certainly not inexpensive for full-time residents, trying to eke out a living, even with a fairly decent job, any more than it would be in Lima or Santiago or Caracas.

Neither is life in this land of natural beauty any more or less “cultural” or more relaxed than in London, or Paris or New York for the permanent denizen of Argentina. From a tourist perspective, the quaint, small streets of Salta, bustling with humanity and traffic, may seem to be like a picturesque Hollywood movie film set. For the single mother of four, working as a part-time maid, however, everyday life is no easier than it is in Santa Fe, New Mexico, a cultural mecca in the United States.

Few except those with disposable income in Argentina neither know of an opera, been to an art exhibit, nor heard a live symphony concert. Many have not even made the lengthy trip to Buenos Aires from their particular village in the vast country. Much the same can be said, of course, of other nationalities who have never seen an art exhibit at the Louvre or Tate museums in France or London, attended a concert at the Konzerthaus in Vienna, nor seen a dance recital at the Bolshoi in Russia although they may have lived in the respective countries all their lives.

Much of Argentina’s mystique has been carefully and skillfully cultivated by the tourist boards. The image is, in turn, mindlessly nurtured and perpetuated by the casual traveler. Inefficiency becomes a more “relaxed” way of life, while a simple dance in the town square becomes “culture.”

More than simply dazzling the tourist with a broad-strokes display of natural beauty and a seemingly contented populace, Argentina seems more to cater to its well-to-do, short-term transients rather than to its own people. Fortunately, the transient visitor hardly ever sees the seething resentment boiling just below the surface veneer of smiles and politeness, nor the petty crime and bribery lurking at the next street corner or with the sales clerk at a local business.

Before its collapse, the ancient Roman Empire was known for its policy of “Bread and Circuses.” Certainly, Argentina seems to subscribe to that maxim. While the price of bread and other staples continues to escalate in local shops or supermarkets, Argentina tries to keep its citizens entertained by its “circuses” through its extensive television channels. There is no dearth of television offerings on its many cable channels, from chat programs to quiz shows, to sports and movies to keep the populace entertained.

Interesting, though, one can legitimately ask for whom the telecasts are intended. Certainly, soccer matches and other competitions draw great local viewing audiences whether on off-the-air stations or the Latin version of ESPN. So do various movie channels.

Yet, while nearly ninety percent of films aired are of American or British origin, most of these are in spoken in English, subtitled in Spanish. That may be wonderful for tourists or other foreigners whose first language is English and who choose to take the pose of a couch potato at night. Unfortunately, it does little for native Castellano speakers, let alone the local indigenous population whose command of Spanish is hazardous at best. Reading rapidly changing subtitles can hardly be conducive to learning English when it is far more interesting to see the action developing on the screen. Moreover, much of the population can ill afford the relatively modest charges for a television set or a cable hookup.

Maybe it is necessary to entertain the masses to keep them from exploding into chaos. Maybe such entertainment can offer a necessary respite to the everyday worker in whatever occupation. Maybe it allows a vicarious view of other cultures. Unfortunately, it may also breed envy and, worse, emulation of the violence so readily broadcast, especially by the modern fare of Hollywood’s output.

American television offerings of violence are hardly conducive to the youth of Argentina that easily succumbs to the greed or envy generated by the silver screen. Worse, it only underscores the lack of education in the classrooms. While Argentina may have the highest literacy rate in Latin and South America, according to most studies more than fifty percent of students fail to continue their education beyond the age of fourteen, the legal mandatory age for leaving school. Since education, including the college level, is free for students attending government-run schools and colleges, one may properly ask why such a large dropout rate exists.

Once again, the overall picture of Argentina is misleading. Despite the high literacy rate, the high dropout rate at an early age tells a different story. A recent Interamerican Development Bank report showed that the causes for a highly unequal outcome between Buenos Aires students and those of rural areas results from both lack of high quality of school facilities and lack of skilled teachers and instructors in rural areas. Moreover, even Buenos Aires, the capital city known for its university with nearly 140,000 students, is even more renowned for the more rapid growth and enrolment of students in private, rather than public schools.

Since education is but one all-important factor in Argentina’s development in the twenty-first century, one must clearly ask if the recent governments – even after the devaluation – are inclined to perpetuate the growing disparity between rich and poor, spelling certain doom for the nation as a whole. Yet that disparity is likely to increase if government lacks the will to change quality public education versus private education, such as in Buenos Aires and Cordoba or Mendoza.

Quality and success of education also derives from a myriad of social factors, many of which result from the disparity of income and the lack of a “middle class” in the historic sense. Argentina would be well warned by the young man’s quip that the country “needs a good war.” While no war from the Falklands to Iraq can ever be termed a “good war,” no matter who the perpetrators, a growing disparity between rich and poor in Argentina makes just such an exercise a probability, whether as an outright war or a disguised dictatorship. Bread and circuses or a lack of change are only preliminary indicators. Only the will and perception of the country’s people can make the difference.