Fiscal Sovereignty: Reconfigurations of Value and Citizenship in Post-Financial Crisis Argentina Mireille Abelin Submitted in partial fulfillment of the requirements for the degree of Doctor of Anthropology in the Graduate School of Arts and Sciences COLUMBIA UNIVERSITY 2012 © 2012 Mireille Abelin All rights reserved ABSTRACT Fiscal Sovereignty: Reconfigurations of Value and Citizenship in Post-Financial Crisis Argentina Mireille Abelin This dissertation examines the Argentine state‘s efforts to stabilize notions of value and reconstitute citizens as taxpayers and users of national currency after the financial crisis of 2001. Working with material from sixteen months of ethnographic research with federal and provincial tax authorities, neo-liberal and heterodox economists, and members of the Buenos Aires upper classes, I trace charged public debates surrounding tax payment and off-shore banking, examining both the rationalities and affective geographies guiding upper class decisions to invest in, or divest from, the nation. My dissertation foregrounds fiscal and financial relations between states and citizens as a critical nexus in the formation of state sovereignty, civic obligation, and liberal individualism. I propose that insight into the volatility of Argentine public finance requires attention to the analytical frameworks deployed by elites, including technical experts and professionals more broadly, to understand and prevent inflation, a defining question in Argentina since at least the early 1950s. The currency board was an anti-inflationary policy that, by pegging the peso to the dollar, luring foreign capital, and drastically reducing the much- vilified public sector, promised to offer ―juridical security,‖ (seguridad juridica) protecting private property rights from the vagaries of monetary instability. Its collapse, after a decade-long tenure, led Argentine authorities to declare the largest debt default in history. The dissertation examines a series of paradoxes faced by many Western nation-states that are acutely manifest in Argentina. How is the indebtedness implicit in the payment of tax, a debt that is not subject to cancellation or the reciprocal laws of market exchange, reconciled with the form of personhood C.B. Macpherson called ―possessive individualism‖ (1962) whose lineage originated in the Lockean rights-bearing citizen? How is this paradox negotiated in light of what many scholars have noted is a reversal characteristic of modernity where the individual rather than the state is seen as the primary sovereign? How is an elusive trust in authority, upon which national currency depends, reconciled with the widely disseminated perception of economy as a set of rational processes? The dissertation argues that monetary stability hinges, in part, on the state‘s successful management of these paradoxes. Through multi-sited ethnography, I offer insight into discourses that condition perceptions of the proper directionality of debt between state and citizens, often expressed in views of tax as theft or gift, which critically inform the willingness of elites to store wealth in Argentine currency. Examining the new discursive links forged between accounting and accountability, I trace President Nestor Kirchner‘s re-signification of the debt default from a source of shame and humiliation to a triumphant gesture of sovereign refusal. I argue that this fiery anti-imperialist discourse, which garnered massive popular support and managed to reconstitute an image of the state as protector rather than thief, was critical to imposing an unprecedented ‗haircut‘ on foreign creditors in debt default negotiations. In cafés and households, I document conversations with elites angered by the widespread backlash against neo-liberalism, exasperated by the return of ―populism,‖ and persuaded that neo-liberal policies failed only because of a corrupt ―political class‖ (clase politica). Firmly identified with a view of themselves as the primary sovereigns, and believing monetary policy should pivot around individual choice, they feel the country is unworthy of their wealth. Several ethnographic chapters document contentious encounters between tax authorities and elite subjects in seaside resort towns and gated communities, analyzing the strategies mobilized by tax administrations to re-initiate what I call the ‗fiscal politics of recognition.‘ The dissertation offers an ethnographic portrait of how elite Argentines grapple with a deep and unresolved tension between the methodological individualism shared by neo-classical economic science and Anglo-American citizenship theory, and the relational and recursive nature of monetary value, which exceeds, and cannot be encompassed by, the languages of market exchange and the social contract. The first chapter is a genealogy of the birth of public finance in relation to theories of liberal individualism in Great Britain, documenting the process through which affectively entangled creditor-debtor relations between state and subjects, while constitutive of civic obligation, nation-building, and trust in modern state economies, were ―purified,‖ (Latour 1993) subjected to disciplinary amnesia. A historical chapter considers how the rarefied sciences of economy traveled to South Atlantic shores to be incorporated into a very distinct historical and geo-political assemblage, one where the fiscal and financial entanglements, disavowed but nonetheless exerting a spectral presence in Western European countries, were absent. The sequence and trajectory of state building in Argentina lead to an accentuated version of the paradox discussed above, making it especially difficult to perceive money, not only as a medium of exchange, but as a pathway of recognition, constitutive of economic obligation. Despite a resurgence of interest in the question of sovereignty in critical theory, scholarship on taxation -- by all accounts a defining feature of sovereignty -- is surprisingly limited, often treated as an afterthought in work on economic anthropology and globalization. Building on work in political and economic anthropology on market and fiscal subjectivities, this research focuses on citizens in their capacities as debtors and creditors of the state, providing insight into a fragile fiscal bond that, despite its centrality, has received little attention in anthropologies of modern capitalism. Offering new analytic tools and re-valorizing older ones, this dissertation elucidates the relationships among value, national belonging, and economic insecurity, made newly visible in the wake of financial crisis. TABLE OF CONTENTS LIST OF CHARTS, GRAPHS AND ILLUSTRATIONS ............................................................................................ ii ACKNOWLEDGMENTS ........................................................................................................................................... iii DEDICATION .......................................................................................................................................................... viii INTRODUCTION ......................................................................................................................................................... 1 Fiscal Sovereignty: Reconfigurations of Value and Citizenship in Post-Financial Crisis Argentina The Secret Power of the Sovereign‘s Debt: Reconstituting Citizens as Moral Creditors ...................................... 13 Neo-Liberalism and an Economy without Domestic Credit .................................................................................. 18 Shifting Class Alliances and Political Visions ....................................................................................................... 25 Argentine Capital‘s Divergent Path ....................................................................................................................... 33 Re-Materializing Class Practices ........................................................................................................................... 44 CHAPTER 1 ................................................................................................................................................................ 53 The Gift in the Market: Liberal Personhood, the Willing Taxpayer and the Fiscal Politics of Recognition The Government of Finance: Sovereign Credibility and the Production of Fiscal and Financial Subjectivities .. 60 Tax as (Sovereign) Gift: The Moral Creditor‘s Agency and the Fiscal and Financial Constitution of ‗Society‘ . 69 The Security of New Origins: Counter-Gift as ―First Gift‖ and the Economics of Forgetting ............................. 84 After the Market: The Post-Purification Anthropology of Capitalism ................................................................... 96 CHAPTER 2 .............................................................................................................................................................. 115 The Market without the Gift: Fiscal (Mis) recognition and the Volatility of Public Finance in Argentina Money in the Absence of Political Community: Currency Boards and the ―De-Nationalization of Money‖ ..... 134 The Return of the Gift and the Challenge to Market Sovereignty ....................................................................... 142 CHAPTER 3 .............................................................................................................................................................