Argentina: The attitude of revolutionary Socialists towards the Kirchner government

There is no doubt that the new government has raised the hopes of many workers. In his inaugural speech, Kirchner's criticism of the "neoliberal" policies of the last 25 years, with their accompanying corruption, de-industrialisation, massive impoverishment and "impunity", was greeted warmly by the masses. The appointment to the government and other sections of the administration of politicians with a certain "progressive" image has also backed up the sentiment that his presidency represents a break with the past. Furthermore, the eyebrow-raising presence, on the day of Kirchner's swearing-in ceremony, of Lula, Chavez and especially Fidel Castro (political leaders who enjoy much prestige amongst Latin American workers), whose speeches all endorsed the new president's accession to power, also backed up this feeling.

In addition, the new government's promises and initial measures, especially some of them, have also received a favourable welcome, e.g. the purge of a major part of the hated military and police leaderships (part of which was still linked to the genocidal dictatorship of 1976-1983 and with former President Menem), the resolution of the long-standing teachers' dispute in Entre Ríos and San Juan, with the payment of all back-pay owed (although this was done with a special loan from the World Bank), and the announcement of a major housing and infrastructure building project etc. Furthermore, the government announced that there would be no immediate hike in the prices of public services, that the Senate's extension by 90 days of a law banning mortgage foreclosures would be respected and that certain contracts signed with private companies would be reviewed. Lastly, in the domain of international relations, the desire to increase Latin American integration with the strengthening of the MERCOSUR pact and relations with Brazil was reiterated, in defiance of pressure from US imperialism which wants to impose its FTAA (Free Trade Area of the Americas) policy. Kirchner crowned this by declaring that his policies would henceforth be based on the concept of "national capitalism".

After one and half years of intense struggle and sacrifice, increasing poverty, massive suffering and threats from the reactionary forces, it was to be expected that millions of workers, housewives and youth would welcome the withdrawal of Menem, who they rightly blame for the corrupt and anti-social policies of the last decade. Capitalising on this sentiment and following his initial speeches and measures, Kirchner has been able to carve out a certain level of support for himself amongst the masses, although few expected him to be able to do this after he won only 22% in the first round of the presidential elections in April. There is no doubt that many of these measures have been implemented with the clear intention of beefing up his level of support in the population.

It is quite understandable why many workers and youth have had their hopes raised by the Kirchner government during its first few weeks at the helm. However, the following questions must now be answered: is there any justification for such hopes? Will the measures announced and implemented by Kirchner to solve the problems of unemployment, low wages, job insecurity, the high costs of living, poverty, impunity and police repression actually work? These are the questions that we hope to answer in the following article.

In order to understand the character of the measures announced and adopted by Kirchner, we must at first look at the deep divisions that exist within the heart of the ruling class itself, which stem from the differences over how the capitalists believe that the future of Argentine capitalism should be managed (or more precisely, how it should be saved) and how economic power should be shared out between them. These divisions have grown sharper over the last year and were reflected in the recent presidential elections by the large number of different candidates fighting it out.

One section of the ruling class, formed by the banks, the financial sector, the majority of the agricultural produce exporters, the privatised companies and some major Argentine companies, is represented by individuals such as Menem and Lopez Murphy. This section is linked directly to US imperialism. Most of its businesses has siphoned-off a huge amount of profits abroad in recent years, thanks mainly to the peso/dollar parity policy. This was the sector that benefited the most from the policies of the last decade thanks to its direct connections with the political and legal authorities, which helped it expand its operations massively.

In opposition to this section of the ruling class stands the section formed by the majority of the domestic industrial sector, which has benefited in the recent period from the peso's devaluation and which is more focused on the internal Argentinean market. This is the layer of the ruling class that supports Kirchner. This layer is formed, amongst others, by the construction sector and businessmen belonging to employers' organisations such as Unión Industrial Argentina (UIA) and Asociación Empresaria Argentina (AEA). Members of this last organisation alone generate some $120 billion in sales, equivalent to 38% of Argentine GDP. Clearly, far from being a marginal section of the Argentine ruling class, this layer forms an important part of the bourgeoisie and national oligarchy.

For a number of years the Argentine state apparatus had fallen under the direct influence of the first section of the ruling class mentioned above, through the politicians that it controlled. To keep things simple, we will call this layer, the "Menemist" section (although it also includes those who support Lopez Murphy). Parliament and the courts had the task of providing a "legal" cover for the business dealings of this section as well as for the bleeding of national wealth that took place during the privatisation programme.

The widespread corruption of the highest civil servants in Buenos Aires and the provinces, in conjunction with the clientelist policies of buying votes and favours, led to the squandering of a massive amount of state resources. In parallel, mass tax evasion and the increase in foreign debt massively reduced state income, which in turn sharpened the economic crisis that surfaced at the end of the 1990's, increasing factory closures and the huge flight of capital abroad. It was only a matter of time before the state itself would be declared bankrupt.

From a purely capitalist point of view, this situation could not go on forever. For capitalism to function "normally", it needs clear rules that are, in theory, applied equally to all sectors of the economy. The progressive decomposition of Argentine capitalism over the last 25 years, reflected in the dismembering of the industrial sector, the massive dependence on foreign capital and the appearance of a rentier and parasitical economy, ended in the biggest economic crisis in Argentine history and the popular uprising of December 2001 known locally as "el argentinazo".

The aim of the measures announced by Kirchner is to save the capitalist system, by attacking the interests of the most parasitic sector of the economy. He wants to do this by "cleaning up" and "reorganising" the state apparatus in order to mould it to the interests of the sector of the bourgeoisie that he represents. For Kirchner's policies to work, it is absolutely vital to boost state revenues in order to "square the circle": e.g. pay off the foreign debt and maintain state spending levels. Kirchner intends to keep the 20% tax on livestock, agricultural and oil exports, which will inevitably bring him into conflict with this section of the bourgeoisie. In order to fight the tax dodgers, who pilfer an astronomical amount $30 billion a year (equal to 10% of GDP and 45% of the state's budget), he wants to create special courts. However, the Kirchner government has no intention of raising taxes for the rich and big business. He only wants them to "respect" the rules of the game and convince them to at least pay their "legal" taxes. These measures will "hit" the most parasitic sector of the economy the most (agriculture-livestock, privatised industry and the banks). In doing this, the government's objective is to transfer a small part of the profits of these sectors to the state in order to underpin its economic policy, which is more favourable to the industrial sector, and help with the implementation of the already announced programme of public works.

The struggle between these sections of the ruling class has manifested itself in other ways within the state apparatus, particularly on the issue of how to deal with the protest movement. In the recent period, the "Menemist" sector has become increasingly arrogant, wanting to "criminalise" the mass movement and use the "hard line". The military and police also favoured this policy. However, the "pro-Kirchner" lobby (and before him the pro-Duhalde supporters), which is far more intelligent, is aware of the fact that given the social situation and in spite of the relative calm in the class struggle, a wave of repression against the movement would be counter-productive and might even trigger an upsurge in the movement, as proved by the events that followed the killings of activists by the police at Puente Pueyrredon in June 2002.

In this context of "easy money" and widespread corruption in the state apparatus, the leaderships of the military and police began to operate as a sort of state within a state. The cowardly policies of the bourgeois political establishment towards the tops of the army and the police since the end of the dictatorship (1976-1983) has given the latter an almost "untouchable" status.

The Supreme Court, undeniably in the hands of the "Menemists", used its power during Duhalde's presidency to "sabotage" attempts to suspend it by pronouncing a number of demagogic rulings with populist overtones, such as the unconstitutionality of the "Final Point and Due Obedience" laws (leyes Obediencia Debida y Punto Final) and the illegality of the freezing of bank accounts (el "Corralito"), amongst others. It unashamedly used its authority with the sole aim of protecting its own privileges by targeting the capitalists and the government with these rulings and the threat of future "rulings".

Therefore Kirchner's decision to purge a part of the state apparatus (Armed Forces, police and Supreme Court) is aimed, as we said above, at partially "cleansing" this organ in order to be able to control it better and make it serve the interests of the section of the ruling class that he represents.

There are also other more personal, although by no means decisive, reasons behind these measures to "cleanse" the state's forces of repression. Unlike Menem or Lopez Murphy, who are of bourgeois origin and conscious representatives of their class, and for whom the state apparatus is a special instrument designed to perpetuate the domination of the ruling class by repressing the mass movement, Kirchner is a petit bourgeois, who as a young man was actually involved in the "left-wing" of the Peronist party. Like all petit-bourgeois elements, he is imbued with the mystical idea of the "democratic" state acting to smooth over contradictions in society, rising above the social classes and subject to the "democratic" control of the people. It is therefore no surprise that he would be unhappy with the presence of people with past links to the dictatorship, of the corrupt cliques of the Menemists and their "conspirational" groups and arrogant military, police and judicial figures who try to influence the policies of the government that effect them directly. He probably wants to make sure that everyone knows who "calls the shots" from now so that these sorts of elements keep a low profile.

In this respect, all sections of the ruling class (through their "mouthpieces" in the editorial columns of the newspapers Clarín, La Nación and others) showed their dislike of the "excessive" and "unnecessary" nature of what they have come to call the "military purge". These sections are openly expressing the feelings of their class. They are aware of the fact that this "military purge" destroys the myth that the tops of the military are "untouchable". The exaggerated "fear of the army" amongst the population has also taken a hard knock. It has reduced many people's fear and dread of an instrument of repression that in this country has always not hesitated to use the most extreme violence and cruelty against the working class and other sections of the masses.

Most of the measures that have recently been causing a stir and whose aim is to hoodwink the workers are, in class terms, "free" in that they cost the capitalists nothing in material terms. Kirchner is focusing his activity on the main objective of securing victory for the faction of the bourgeoisie that he represents. These measures have been designed to satisfy a fundamental requirement of Argentine capitalism: to win back the masses' trust in the regime's institutions, to cleverly divert their attention towards parliamentary debate, to confine all conflict to within the arena of state bodies and generally pacify them after the very volatile months that followed December 2001, when this trust began to melt as quickly as snow in the sun. Furthermore, the state, as an instrument of class domination, cannot continue to bear the hallmarks of "Menemism" if it wants to give the impression to the masses that it is "impartial" and "democratic". It must therefore be cleansed and window-dressed. The sector of the bourgeoisie that Kirchner represents wants to reduce the drain on state resources as well as show the masses that the state can be both impartial and trustworthy, whilst of course maintaining it firmly under its control.

Is national capitalism possible?

In his presidential acceptance speech, Kirchner placed great emphasis on the idea that he would work towards establishing "national capitalism". Although completely unfeasible, supporters of national capitalism say that such a policy would help medium-sized or lesser-developed capitalist countries to develop their productive forces (industry, agriculture, science and technology) and, in the process, free themselves from the domination of the major imperialist powers. Unfortunately, there does not exist and there cannot exist any type of "national capitalism" in the current epoch in any country around the world. In reality, the most striking feature of our times is precisely the overwhelming domination that the world market exercises over the whole planet. Not only are the least developed countries unable to develop outside the limits of the world market and the trading relations that characterise the international capitalist economy, but neither can the most advanced capitalist countries.

We no longer live in the 19^th century, when the formation of modern national states and the early development of industry and trading links enabled a few "advanced" countries to build their own "national capitalism". In fact, it was precisely due to "free trade" that the current epoch of monopolistic imperialism (i.e. the epoch of the monopolies and the large multinationals that suffocate any attempt to build an "independent" industrial sector away from the major imperialist powers) was able to come about. Neither are we in the period immediately following the Second World War when the expanding world market enabled second-ranking capitalist countries to develop their productive forces for a certain period of time, only to see them fall into the claws of the major imperialist powers over the last two decades.

The national capitalist classes of the least developed countries are too weak and backward to compete with the major multinationals. Consequently, the opposite is actually happening as the major multinationals appropriate the national wealth of a majority of countries and split up the world between themselves. The wars in Iraq, Africa and other parts of the world are the ways in which these major imperialist powers get hold of the resources and raw materials of the poor countries when "diplomatic" methods fail. Massive pressure on national governments, economic, commercial and diplomatic blackmail or the even the open organisation of "coups d'états" and other plots to "convince" or overthrow uncooperative governments – these have been the methods of the imperialists, day in and day out, over the last few decades.

The lessons of "Peronism" and "Chavism"

Many people see the idea of "national capitalism" as a return to the days of General Peron. Admittedly during Peron's first government, more specifically up until 1952, the Argentine working class was able to win historic victories in terms of employment, wages, paid holiday and other social benefits, many of which have now been destroyed. However, Argentina's situation in those years was very different to what it is now. Peron was able to benefit from a situation where Argentina was the tenth biggest industrial power in the world and during which there was massive demand for beef and wheat from Europe and other parts of the world, following the end of the Second World War. As in other countries, the growth in the world market triggered a massive expansion of industry in Argentina in the years and decades that followed which ended with the first major world economic crisis in 1973. Once again, this is proof that no national economy (neither in 1945, 1973, nor in 2003) can exist independently of the world market and economy.

Sooner or later the major powers and multinationals are able to achieve domination over weaker countries. Due to weak and cowardly national bourgeoisies, unable to fight off the attacks of the imperialists and the oligarchies, the working class is the only social class able to provide protection from the imperialists. Therefore it is no surprise that the workers were able to fight off the various attempts to undermine the Peronist governments of the 1950's (despite the fact that the period between 1952 and 1955 was marked by Peron's policy of counter-reforms and attacks on workers' strikes). At the decisive moment, during the "la libertadora" coup d'etat, Peron could have mobilised the workers to defeat the coup d'état by arming them (he had demagogically threatened the oligarchy that he would do this). However, he feared an independent movement of armed workers more than the oligarchy and US imperialism as he was aware that the only way of fighting all sections of the ruling class (from the agricultural and livestock oligarchy to the industrial bourgeoisie) was by expropriating them, in other words the implementation of a genuine socialist policy. But this was the very last thing that Peron wanted to do, as a conscious representative of the bourgeoisie. For this reason he preferred to leave power without a fight, abandoning the Argentine working class to vicious reaction.

Once again the attempt to develop a "national capitalism" with the third Peronist government finished in a nightmare for the Argentine workers. During the revolutionary situation that existed at the beginning of the 1970's, the "national" capitalists, as in the 1950's, once again let loose an orgy of bloodletting and repression to stamp out the workers' movement, with the coup d'état of 1976. The responsibility for this massacre once again falls on the Peronist leaders whose policy of class conciliation and "harmony" between the capitalists and the workers politically disarmed and paralysed the Peronist workers (who represented the majority in the Argentine working class at the time). It is no coincidence that the "right wing" of the Peronist movement actively collaborated with the reactionary forces in the dictatorship of the 1970's.

Chavez's government in Venezuela embodies the latest version of the so-called policy of "national capitalism". Chavez's demands are in fact quite modest: he only wants the multinationals and major national companies to "sacrifice" a little portion of their enormous profits in order to deal with the most urgent needs of the population e.g. decent housing, health and education, adequate wages and stable jobs. But even this is too much for the oligarchy and this is why they have tried to overthrow him twice in the last year. And in both cases, the Chavez government was saved by the heroic intervention of the working masses who poured into the streets. Chavez's conciliatory attitude toward the reactionary bourgeoisie has only encouraged the latter to continue with its coup-plotting plans even more earnestly in order to bring a definitive end to his so-called Bolivarian revolution.

"Keynesian" policies

Kirchner has combined his idea of "national capitalism" with the implementation of a "Keynesian" economic policy, i.e. state intervention in the economy to stimulate production. On many occasions he has actually described himself as a "Keynesian". However, a "Keynesian" policy would necessarily involve the state getting into greater debt, in order to make up for the lack of private capital in the economy, by supplying cheap capital to encourage business leaders to invest and by increasing state spending on education, health, housing and social policies etc. This would also involve greater taxation of the rich and, in the final analysis, the nationalisation or partial state take-over of the productive apparatus.

However, is there really room for a Keynesian type economic policy in Argentina today? Our reply is a clear ‘no!' The agreements signed with the IMF, which the Kirchner government is not calling into question, despite its declaration that it will not pay the debt if it means "starving" the people, prevent the new regime from taking this road. Firstly, the government has accepted the principle of a "fiscal surplus", i.e. that state receipts must be higher than state spending. This implies at least a freezing of state spending, if not more. Secondly, the Argentine state (including Kirchner) has agreed to pay the banks some $20 billion in order to "compensate" them for the "peso-isation" of loans. This huge amount of money, which could have been used by the state to invest in production, will go straight into the pockets and accounts of the parasite bankers. The Kirchner government, once again according to the terms of the IMF agreement, has committed itself not to raise taxes for the capitalists; on the contrary, there are some agreements that actually lower taxes for some of them (taxes on profits fall from 35% to 30%, etc.). All this does not even include the annual 4% or 5% of GDP that Argentina must earmark for the repayment of its foreign debt load from next year onwards.

Under these circumstances it would literally take a miracle for the semi-bankrupt Argentine state to have enough money to implement a significant increase in spending and carry out productive investment. The programme of public works announced by Kirchner seems like a good idea, but we believe that it in the end it will only have a limited impact. Although this programme, which plans to build 200,000 homes over a number of years, may seem ambitious, in reality it falls far below the actual requirements of the million or so people living in shanty towns and decrepit houses or of the tens of thousands of young people who want to leave the family home. In Santa Fe province alone, following the recent flooding, experts calculate that 40,000 houses will have to be either repaired or built again. For the construction of these houses and various other infrastructures around the country, the government is reportedly to earmark some $6 billion (1.8% of GDP) which will come from the state budget and loans from abroad. However, this is clearly not enough money to kick start the economy.

Lastly, Kirchner has already said that he does not intend to renationalise any of the companies privatised over the last few years. He is to introduce a number of "bonuses" and "penalties" to encourage these companies to fulfil their contractual duties. Those utilities and companies whose owners do not fulfil these duties will have their concession re-tendered (i.e. given to another private company).

This is the real face of Kirchner's much-trumpeted "Keynesianism". This in fact just underlines once more the incompatibility of the interests of the IMF, the country's major creditors, the banks and the multinationals with those of workers and their families.

However, not only is the government committed to respecting the payment of the infamous "foreign debt" from next September onwards (the sums and the new repayment schedule are to be determined in negotiations over the next few months) but it is also planning to hike the prices of public services. The Kirchner government has not questioned the actual rise in prices, only the amount by which they will be raised. In the short term it has been able to gain popularity by saying that there will be no immediate price rises. However, even during the electoral campaign there were rises of around 10%, which, for the already much shrunken pockets of the workers, were yet another sacrifice to bear. Like with the "debt", the final level of these price rises will be decided through negotiation over the next few months. Once again, the government wants to ensure that the multinationals and the national companies that control this part of national wealth (e.g. oil, transport, gas, electricity, water, telecoms etc) are able to get their hands on this good source of profit to the detriment of the workers and their families. It is not that these companies are not making any profit (if this was the case their owners would have got rid of them long ago) but that the profits generated are not enough for the capitalists.

The real cause of the Argentine crisis over the last few years was the massive flight of private capital abroad, which eventually caused the collapse of the economy. A genuine economic recovery can only be obtained through a massive investment drive. We have already seen that the state is not able to do this. But private capital will not be able to do this either as a capitalist does not invest to amuse himself. He does it with the sole intention of selling his products on the market. However, given the current recessionary phase in the world economy, particularly in Latin America, there will be no major investment.

As we have explained in previous articles, Argentinean capitalism is very weak and can only compete with foreign products coming into the country or on international markets by encouraging a low-wage economy based on unstable jobs, which is precisely the only area in which Kirchner and his government has promised nothing. At the most, they will make effective the wage rise of 200 pesos for workers in the private sector who have a contract (25% of all wage-earners), which in any case is certainly not enough to compensate for the loss in purchasing power over the last few years due to the increase in inflation.

Collaboration with the "national" and "progressive" bourgeoisie, or class independence

It is equally false to say, as Kirchner does, that the interests of Capital are the same as those of Labour, that Argentine businessmen and workers have common interests. Admittedly when the economic situation is good, businesses can make a few concessions to the workers (concessions that are never free and that are won only after hard-fought struggles and strikes). However, when "national capitalism" goes into deep crisis, the national capitalists think nothing of shifting all the burden of this crisis on to the shoulders of the working class, as we have seen over the past few years, as well as calling on the help of the imperialists and the forces of repression to keep the workers in check.

We also reject the idea that there exists a "progressive" and "national" section of the bourgeoisie, which is opposed to a "reactionary" and "anti-national" section. In reality, the layer of the bourgeoisie currently backing Kirchner in his plans to implement a few demagogical measures (so that he may carve out a basis of support for himself amongst the population) is doing so merely as a way of better wresting control of the country from the opposing section of the ruling class. If, in the future, the struggle of the workers and oppressed layers goes much further than the strict limits set by the capitalist system, both sections of the bourgeoisie will unite to fight the working class using the law and the forces of repression to stamp out the danger of social revolution. This has always been the case in our country and abroad.

There is no middle road. The only way to ensure a high level of industrial development, decent education, health, pensions and employment conditions and Argentina's complete emancipation from the claws of imperialism is through an independent class policy of the workers. The working class (the majority in society) must only place trust in its own strength and create its own class organisations (trade unions and parties) to take power and expropriate big business, the banks and the multinationals in order to implement a socialist plan of production.

20 million Argentines out of a total population of 36 million are poor (57% of the total population). The completely destitute account for 27.5% and the sum of the under-employed and unemployed is 47.7%. Since the devaluation and the lop-sided peso-isation process, which mostly benefited the capitalists, inflation has jumped to 44.5% and public and private debt now stands at 150 billion dollars. Due to the class structure of society, this means that 63.5% of the wealth socially produced by the sweat of the working class is pocketed by the bourgeoisie whilst the working class and the other oppressed layers of society only get 34%.

If Kirchner really wanted to govern in the interests of the workers, increase state spending to meet the needs of the population and implement a genuine programme of public works that would transform the country and eliminate unemployment, he would have to start by tearing up the agreements signed with IMF and refusing to pay the foreign debt. This would earn the state the billions of dollars required to make these policies reality.

He could also do no worse than to renationalise the privatised public services and companies that generate billions of dollars' worth of net profit (e.g. the oil, gas and electricity companies amongst others). This would also have the advantage of fixing prices to their real cost and eliminate the surcharge that the capitalist multinational sharks add on to boost their profit margins even higher. Not only would there be no hike in public service charges, but the latter could actually be cut which would increase the purchasing power of working families. He could also renationalise the railways, which currently swallow up more than 300 million pesos a year in state subsidies to comfort the profit margins of a small clique of parasites, who provide a woeful service anyway.

On top of this, he could decree a generalised wage rise for all workers, reduce the working day and end insecure employment. The capitalists with their massive profits should be made to pay for all this. Millions of workers surely must be more important than just a bunch of rich profiteers? If the capitalists do not want or cannot do this then why not expropriate the property of the big businesses, monopolies and banks, under the control of the workers, so that this may be done? In this way, the resources of the nation could be allocated to benefit the majority of society.

Unfortunately, in order to achieve all this, more than words and good intentions are needed. A socialist policy must be applied. However, Kirchner is not a socialist but a petit-bourgeois politician who believes that the interests of the capitalists and the workers can be defended at the same time. However, both history and experience shows that this is not possible. If Kirchner accepts the capitalist way, i.e. a few thousand capitalists privately owning the national wealth, on which millions of workers and their families depend to survive, he is bound to end up governing in the interests of the capitalists, thus dashing the hopes that working families have just placed in him.

The workers must be mobilised to demand better wages and decent working conditions

Therefore it would be a mistake to trust in the good faith of the Kirchner government to improve our living conditions. Workers must go on the offensive now to get back all that they have lost in the last few years. They must push the trade union leaders of the CTA and CGT to lead a series of struggles for better wages, in order to boost purchasing power, and for better working conditions. In concrete terms, this should include the demand for a minimum wage of 800 pesos for all, which is the cost of a basket of products for the average family. More specifically, workers should demand an immediate rise of 200 pesos for all, without exception. An end must be put to insecure jobs and all workers must be taken on at full contract after an initial two-week trial period. The struggles of the workers must be linked to those of the unemployed so that new sources of work are found and shared out. If this cannot be done the government must introduce unemployment benefit of 500 pesos for all those without work until they find a job. Workers must also mobilise to demand that the government pulls out of its agreements with the IMF and allocates the money earmarked to pay for the "debt" to pay for socially useful programmes.

Latin American unity

The presence of Lula, Chavez and Fidel Castro appeared to a give a fresh impetus to the idea of bolstering Latin American unity to fight off the attacks of US imperialism. In addition to this, Kirchner in his acceptance speech spoke of the need for stronger Latin American integration and underlined the need to reinforce MERCOSUR.

MERCOSUR is a pact between the ruling classes of the two biggest Latin American countries (Brazil and Argentina) to protect their markets from the unrelenting assault of American multinationals and to open up trading links further with other imperialist blocks such as the European Union. Their aim is to strike a balance between the two giants (American and European imperialism) in order to defend their own interests better. MERCOSUR (which also includes Uruguay and Paraguay) worked relatively well during the economic boom of the 1990's, however when the winds of recession started to sweep through the area at the end of the last decade, it more or less ceased to exist due to the conflict of interests between the Brazilian and Argentine capitalists, who tried to export the recession to each other by, at one point, actually putting up protectionist barriers between one other in order defend each other's respective domestic markets.

At the moment, US imperialism is pushing for the implementation of the "Free Trade Area of the Americas" (FTAA), with which it aims to deepen and strengthen its economic hold over Latin America. As expected, this has led the ruling classes of both Argentina and Brazil to put aside their differences in order to try and fight off this new onslaught from the Americans. Interestingly, neither country is actually questioning the FTAA's right to exist, but, on the contrary, they simply want to negotiate with the US capitalists so that the FTAA can be implemented in the best possible conditions for the capitalists of each country, or, we should say, in the "least worse" possible conditions for them.

As we said at the beginning, the Latin American bourgeoisie is weak and lacks the necessary strength and courage to openly break with imperialism. In many areas of business they have common interests with the imperialists and in reality the local bourgeoisies in Latin America merely act as the local representatives of the imperialists in these countries. Despite the fact their economic interests are continually threatened by the imperialists' voracious appetite, sometimes leading to tension between them, in the last analysis they will always find an agreement or understanding between each other (or even downright capitulation, as in the cases of Mexico, Chile and in even Argentina, particularly over the last few years)

Therefore to talk, like Chavez and a number of other "left-wing" nationalists in our country do, of the possibility of Latin American unity on a "national capitalist" basis is pure pie in the sky. The idea of a meeting on "Latin American unity" with Fidel and Chavez talking together with the rotten, pro-imperialist oligarchies of Colombia, Peru, Ecuador, Argentina and Paraguay is just laughable. The Latin American oligarchy is in fact very comfortable with present situation, disposing of the resources of each country as it pleases, with a helping hand of course from the US and European capitalists.

We have already described above that the only way to build a serious challenge to imperialism and the local oligarchy is through a socialist revolution led by the working class. We, as Socialist revolutionaries, are firmly in favour of Latin American unity. However, we realise that there is only one way of achieving this, namely through a Socialist Federation of Latin America. This would be a very powerful force that would not only be able to defeat any attempts on the part of imperialism to crush the revolution and successfully integrate and plan the resources of the whole continent in a harmonious manner, with the aim of improving the economic, social and cultural conditions of our peoples, but it would also get the support of the working class in America itself and the rest of the capitalist world, thus sapping the bases for an imperialist intervention and widening the struggle for socialism to more and more countries.

We think it appropriate to discuss this last point, despite the fact that we went over it in detail in the last article about the elections, as we would like to underline a number of points that we think important.

Many activists on the left were disappointed and disorientated by the results of the presidential elections in April. This disappointment and disorientation has only increased with the majority support for Kirchner and his government revealed by recent opinion polls. They are also unsettled by the "popular", or at least not openly reactionary, measures taken during the first weeks of his government.

Some activists and leaders from the most important left groups are even talking about a "swing to the right" in society and that the movement born of the "Argentinazo" is over and that there is no sense in talking about the existence of a "revolutionary process".

We do not share the pessimistic conclusions that come from this type of analysis. We believe that there has neither been "a swing to the right" in society nor that there is a feeling of profound disillusionment or defeat within the working class.

Admittedly the vanguard of the movement, comprised of tens of thousands of activists from left groups, the piqueteros, militant trade unions, popular assemblies and the youth, fought with great passion over the last year and half of massive social upheaval in the country. Unfortunately, due to the depth of the capitalist economic crisis and the refusal of the trade union leaders to lead a mass movement, the activists remained relatively isolated from the majority of the working class, which in general remained passive during this period. It is also true to say that this extraordinary movement of the vanguard has ebbed quite significantly over the last few months. All this is true. However we believe that it would be an error to confuse the mood of the activists with that of the whole of the working class, which always takes a certain period of time for mobilising.

The real mood of the working class is reflected in a distorted fashion by its attitude to the Kirchner government. This mood has nothing to do with defeat but is actually characterised by the enormous hopes that workers have placed in the new president. Kirchner, in relatively demagogical fashion, made a number of gestures to "his left", even before he was elected, in order to boost his social power base, and he is still doing this, relatively successfully. On the contrary, this does not signify a mood of defeat amongst the workers, but a mood of hope and a certain level of expectation. Without this mood in the population, Kirchner would have never been able to carry out his "purge" of the military leadership. This actually demonstrates the very weak basis of support for reaction in Argentina, despite the fact that many on the left never lost an opportunity, at certain moments of the struggle, to frighten everybody with talk of a possible coup d'état.

In reality, we must conclude that reaction has suffered a very major setback and has barely been able to raise its voice in protest. It was left completely dumbfounded by the "purge" of the military and police and had to keep its mouth shut again during Fidel Castro's speech at the Faculty of Law in Buenos Aires, and during Kirchner's reception for Hebe de Bonafini (the human rights activist) at the Presidential Palace, etc. Menem and Lopez Murphy were only able to mutter their disapproval. We are not saying this to raise false hopes in Kirchner, but precisely to underline the weakness of bourgeois reaction in the domains where it has always been particularly reactionary, e.g. in the military and in its attitude towards Cuba and Hebe de Bonafini. This cautious attitude on the part of reaction can only be explained by the majority support that the above-mentioned actions and decisions had in the population, including amongst layers of the middle classes.

The enormous expectation created by the visit of Fidel is good proof of the mood. Leaving aside the criticisms that we may have of certain aspects of the Cuban regime, there is no doubt about the support and sympathy that Castro attracts in wide layers of the workers and the youth of Latin America, as well as the whole world. If there had been a mood of defeat and retreat, there would have never have been so many people turning up spontaneously to Castro's meeting, which gathered nearly 20,000 people (undoubtedly followed by tens of thousands more on TV).

The coming to power of Kirchner, in the context described in this article, and the effect produced by his initial measures, has been the "accident" which is tearing from their lethargy wide layers of workers and youth with no previous political experience and who, up to now, have been absent from the movement. They are starting to get interested in politics, which, combined with their previous experience, will prepare the conditions for their entry into the class struggle itself. Admittedly, at the moment, they are doing this in an expectant fashion, waiting on each decision of the government, but tomorrow they will go on to the offensive if the president fails to translate the letter of his promises into concrete actions.

The Kirchner government will therefore be subject to two pressures; the working class on one side urging him on to fulfil his promises and the various sections of the capitalist class on the other side egging him on to implement the policies most in line with their interests. The presence in his government of people openly related to big business such as Beliz and others will open up splits and divisions sooner or later between those who believe that more concessions should be given to prevent a social explosion and those who think that enough is enough, fearing that the workers will ask for more and more. Peronism is in fact a heterogeneous mixture of different interests and political points of view. Sooner or later it will explode into pieces. In this respect, it is noteworthy that while the support and hopes for Kirchner are a reality, Peronism as a political movement generates absolutely no enthusiasm amongst the mass of the working class at all. This is extremely positive. It is precisely due to this lack of political alternative, that the hopes of millions of workers and youth have been focused on Kirchner. This is one of Kirchner's major strengths (and of the section of bourgeoisie that supports him) at the moment. However, it is also his weakness in that he will not be able to satisfy the hopes placed in him.

Tomorrow when these hopes are dashed by stark reality, for the reasons that we have explained above, the mass of the working class will move into action to try and fulfil his promises through direct action, if he is not able to do so. This will take the form of strikes, marches, factory occupations etc. Through its experience, the working class will see the limitations of petit bourgeois politicians like Kirchner who try to reconcile the irreconcilable: i.e. the interests of the capitalists with those of the workers. The workers will understand the necessity of having their own political tool, i.e. their own party to fulfil their own objectives. They will push the union leaders into action on both the industrial and political fronts. Sooner or later, the idea will appear of creating a workers' party based on the trade unions to fight the anti-working class policies of the various bourgeois governments that will now follow.

This would be a major conquest for the Argentine working class, which never before has been represented by a mass party. When this time comes, left activists will have to make a choice: either participate actively in this mass experience side by side with the workers to raise and spread the genuine ideas of socialism and revolution or remain at the wayside of this process, isolated in small groups with no connection with the mass of the working class and youth. We, in El Militante, have already chosen the first option.

Although the Argentine ruling class has been able to regain control of the situation in the wake of the revolutionary process that followed the "argentinazo" popular uprising in December 2001, it has been able to solve nothing. The next few months and years will be decisive for the working class and youth of Argentina. Through their very own experience, successes and errors, more and more and wider and wider layers of youth and workers will come to the conclusion that a radical change in society is necessary and they will look to the programme of revolutionary socialism as a way of carrying this out.

June 5, 2003.