Have the Capitallist system faliled in Latin American?

[I LOVE HO CHI MINH]

I think the answer is yes. We have the recent example of the Argentine crisis or the badly situation of Uruguay. The system have completely failed and Its era is now over. Its time for a change. Latin Americans , we have to start to work for us and not for the fucking US goverment. ITS LEFTY´S TIME!!!

[Ho]

obviously gordito!

[BatistaNationalista]

During the time of Batista leadership, capitalism was working sufficiently in Cuba. Everythign was in order, and there were no foreign conflicts. Look what happened to cuba after the revolutoin. Its quite saddening.

[Ernest Everhard]

For the past month its become very trendy, and particularly around this board, to point to argentina as the stellar example of "capitalism's failure." Yet, as is the case with all other economic depressiongs,during which the voice of unreason loudly proclaims the eventual victory of socialism only to see capitalism prevail again, Argentina is no different.
When looking at Argentina you must also see its situation within the context of that nations history. Over the past 70 years Argentina has gone from one of the worlds LARGESTS economies, down to poverty and back up again.
Early in the century, Argentina's GDP was starting to rival those of European nations, then following the depression the country experienced a rise in authoritarianism and nationalization that would push the middle class to the brink of instruction.
Following the loss in the Falklands and the decreased international tensions that came with the end of the cold war, Argentina's military junta belatedly gave up power and the new government began to liberalize the economy. Over the last decade and a half Argentina once again became one of the worlds largest economies, and the middle class of the nation once again grew. Yet despite the great strides in that were made in the development of the argentine market system, the nation's institutions still lacked the necessary transperency and kept many of the regulatory prohibitions of the old authoritarian regime. This in turn brought about the current crisis as the government toyed with the normal financial transaction enviroment.
What the last crisis demonstrates is that Argentina needs, among other things, a central bank that is not political beholden to anyone, much like the US federal reserve. It needs impartial and trimmed down regulatory faculties, and it needs to tone down the powers of the government to control financial institutions like banks.
It's quite true that many people lost a lot of money over the last few months, but it is doubly true that those very people would not have had any of that money had there not been a liberalization of the economy and an introduction to capitalism
You may assault capitalism because it is a victim to a cycle of boom and bust, but you must understand two things. First, that this cycle, as the US Fed reserves demonstrates is treatable. While everyone on the left was complaining about GW bush not taking care of the economy, this past quarter the economy experienced a 5.8 % increase. Secondly, that for all its faults, capitalisms cyclycal recessions and depressions are far better than the perpetual state of economic disaster that arises from socialist economic principles and methods.

[elizquierdista]

Do not for a second think you know what you are talking about or think that you're right! As un argentino I take it as an insult that you say capitalism hasn't failed. It has not only failed but has brought mi patria to the brink of civil war. The "Chicago Boys" have completely anhialated our economy and sold what was left of our country to the private businesses. Their neoliberalism bullshit has left our economy, our banks, and our faith in ruins. And don't you dare come back and say neoliberalism just wasn't "used" in the right way.

Uruguay is heading in the same direction as Argentina. They've already said that the country'll enter into default next year. Most of this because the state has practically nothing to generate profit for itself and give to the people. The majority of the country is communist as a result of the failure in the economic policies and the bullshit 10% right-wing leaders that own the country.
I'm sorry that you just don't see how Latin-America has been suppressed and turned against itself by the capitalists. Funny how 2,000 people show up for the world economic forum (bunch of rich fucks) and 40,000 showed up to a socialist forum down in Brasil. Too bad a lot more people couldn't make it to the one Brasil because they're too poor.

[vox]

Ernest's brief history is, I think, a bit misleading, for he makes it sound like everything was fine but for a bit too much government meddling. I don't believe that is the case at all, and I'll explain why.

The IMF, in it's 1999 review of Argentina, praised its "strong investment-led growth" and "noted the substantial progress made by Argentina in recent years in structural reforms, particularly in privatization, deregulation, pension reform...."

Also, the Fund "observed that the currency convertibility plan has served Argentina well, and continues to be an adequate framework for stable growth."

IMF Concludes Article IV Consultation with Argentina (http://www.imf.org/external/np/sec/pn/1999/pn9921.htm)

The Left Busines Observer states that "a year later, the Fund's annual review noted the strains from recession, but continued to praise the authorities' prudent fiscal management (i.e., budget cuts) and continuing structural reforms (i.e., privatization and deregulation.) The currency regime was praised again. The banking system was praised for its admirable soundness. These are the very same banks that Argentines spent the holiday season lining up in front of, hoping to be united with their threatened deposits." (LBO number 99)

Unmentioned by Ernest, though so important that I don't see how it could have been an oversight, is that Domingo Cavallo, the economy minister, created a currency board that tied the peso to the US dollar in order to stop a 3,000% rate of inflation. No peso could be issued without the dollars to back it up. Foreign investment poured in, sparking the great boom of the Nineties. However, what needs to be known here is that the capital inflow mainly took the form of debt: banks, companies and governments borrowed heavily. By the end of the Nineties, Argentina had to borrow more to cover just the interest on the debt, which had now doubled. Argentina couldn't cut the value of its currency, a standard maneuver, nor could it cut interest rates as the recession deepened, for it was stuck with US rates as its standard.

Again, LBO:

But even in the boom, growth was never equitable distributed; the World Bank conceded in its September 2000 brief on Argentina--one of its "most active borrowers"--that "poverty levels have stubbornly stayed high despite rapid economic growth." In the crisis years of 1989 and 1990, 40% of the population was in poverty. That fell to 17% a few years later, only to rise along with the GDP, up to 25% in 1998. (Emphasis added.)

Ernest is correct that, in the early 20th century, Argentina was a rich nation. However, he doesn't mention why it was rich. Argentina's early wealth was based on the export of grains and meats to Europe and the US. It never developed its own industry or technology and providing basic commodities was not a strong foundation for growth.

Mark Wiesbrot reported that "'The IMF led a whole series of mistakes, from exchange rate policy, to fiscal policy, to the privatizations, that culminated in disaster in Argentina," notes Nobel prize-winning economist Joseph Stiglitz. But the Fund's economists cannot see the irony in punishing millions of poor and working Argentines in order to enforce market discipline, while the IMF expects to get back every dollar that it loaned—with interest." (Source (http://www.commondreams.org/views02/0422-04.htm))

There has been a lot written about Argentina over the past few weeks, and the Net makes it available to everyone here. It's very interesting reading, indeed.

vox


(edited cuz vox can't spell maneuver *o the shame*)

(Edited by vox at 8:34 am on April 28, 2002)

[elizquierdista]

Thank you vox, and I apologize for cursing but when I see my nation from what it once was, and look at it now in shambles because of crooks, economic policy, and the rich, I'm filled with anger.