ESSAYS ON THE ARGENTINE POLITICAL ECONOMY THROUGH THE LENS OF THE CLASSICAL- KEYNESIAN APPROACH RAMIRO EUGENIO ÁLVAREZ SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY IN ECONOMICS SUPERVISOR: ARIEL DVOSKIN UNIVERSITIES OF FLORENCE, SIENA, AND PISA JOINT PHD PROGRAM IN ECONOMICS PROGRAM COORDINATOR: UGO PAGANO CYCLE XXXII — ACADEMIC YEAR: 2019-2020 CONTENTS Acknowledgements .................................................................................................... 4 Glossary of Symbols ................................................................................................... 5 Introduction ................................................................................................................ 7 1 Chapter I ...................................................................................................... 9 Prices, Distribution And Accumulation In A Peripheral Economy Through The Lens Of The Classical-Keynesian Approach. An Analytical Reconstruction Of The O’Donnell’s Argentine Pendulum (1956-1976) ...... 9 I. Introduction ................................................................................................. 9 II. O’Donnell’s Pendulum: Productive Sectors, Classes and Political Alliances in Argentina, (1956-1976) .......................................................................................... 11 III. Modelling O'Donnell's (1978a) Systems of Prices, Quantities and Relations among Productive Sectors ...................................................... 17 III.I. Prices and Distribution ...................................................................... 18 III.II. Quantities .......................................................................................... 23 IV. An analytical representation of the O’Donnell’s Pendulum ................. 26 IV.I. EPM: Tensions of the Argentine BA State from a Growing Economy and the External Constraint ............................................................... 27 IV.II. The CPM: Tensions in the BA State from the adoption Of SPs....... 35 V. Conclusions ............................................................................................... 39 VI. References ............................................................................................. 41 2 Chapter II ................................................................................................... 45 Prices, Distribution And Accumulation In An Economy With Technological And Financial Dependences Through The Lens Of The Classic-Keynesian Approach: A Formal Reconstruction Of Argentine Political Economy (1973-1983) ................................................................................................ 45 I. Introduction ............................................................................................... 45 1 II. Modelling Prices and Distribution, Quantities and Relations among Productive Sectors ..................................................................................... 47 II.I. Assumptions ...................................................................................... 47 II.II. Prices and Distribution ...................................................................... 48 II.III. Quantities .......................................................................................... 52 III. The Political Economy of the Third Peronism (1973-1976): The Import Substitution Industrialization led by the Popular Government ............... 56 IV. The Political Economy of The State Terror (1976-1983): Terror and De- Regulation to Prevent the Political Aspects Of Autarchic Development 63 IV.I. The Opening of the Economy: Trade Liberalization Reform (1976- 1978) .................................................................................................. 66 IV.II. The Opening of the Economy: Financial Reform ............................ 68 IV.III. The Anti-Inflation Policy ................................................................ 70 IV.IV. The Global Evaluation of Economic Programme Implemented during the Dictatorship ............................................................................... 78 V. Conclusions ............................................................................................... 83 VI. References ............................................................................................. 84 VII. Appendix: Over-Determination of Price System in An Economy with Technological And Financial Dependence ........................................... 89 3 Chapter III .................................................................................................. 92 Inflation and Stabilization Experiences in Argentina Through the Lens of the Classical-Keynesian Approach: The Austral and Convertibility Plans (1985-1991) ................................................................................................ 92 I. Introduction ............................................................................................... 92 II. Theories of Inflation and Hyperinflation in the Light of the Classical Theory of Value and Distribution .......................................................................... 94 II.I. The Distributive Conflict and the Inertial Inflation in a Closed Corn- Economy ............................................................................................ 94 II.II. Inflation in an Open Corn-Economy ................................................. 97 2 II.III. On Hyperinflation and the Explosive Trajectory of Price Growth Paths .......................................................................................................... 99 III. The Austal Plan. The Avoidance of the Hyperinflationary Trajectory 101 III.I. The Austral Plan: A Description of its Main Measures .................. 103 III.II. The Austral Plan: Internal and External Tensions .......................... 105 III.III. The Austral Plan: Foreign Debt as the Main Priority in determining Economic Policy ............................................................................ 106 IV. The Convertibility Plan ....................................................................... 109 IV.I. The Fourth Peronist Government: The Political Economy Under Hyperinflation ................................................................................. 109 IV.II. The Convertibility Plan: The Economic Anomie as an Opportunity to state a Legitimated Class Domination ............................................ 112 IV.III. The Convertibility Plan’s Consequences: Price Stabilization, Technological and Financial Dependences and Hegemony ........... 115 V. Conclusions ............................................................................................. 117 VI. References ........................................................................................... 118 3 ACKNOWLEDGEMENTS I would like to start by thanking my parents Patricia and Marcelo, and my brother Gonzalo for their love and understanding. They supported me unconditionally in every decision of my life, and I feel very grateful to them for giving me light and love in the most darkness and loneliness moments. I would like to extend my thanks to my grandparents, Ademar José, Malena, Nory and Eugenio. My aunt Andrea and my cousins Camila and Juan Ignacio gave me their support and love, regardless of distance or my absences. They all were decisive to develop the person I became and the student who wrote this Ph.D. dissertation. Next, I should continue to thank to Ariel Dvoskin, who has been my supervisor and mentor for the past five years. He has been not only a teacher who instructed me in the theoretical perspectives to address the problems of value, distribution or accumulation but also in the passion for the search of the truth and the nature of economic phenomena. Ariel has never doubt in my capabilities and always read my thoughts, ideas and preliminary drafts with patient and willingness to help and improve the arguments and hypothesis. Without Ariel’ intellectual support and wisdom this thesis would never have materialized, and for this I feel extremely thankful with him. I also very thankful with Germán Feldman for reading and commenting my work. The discussion with Ariel and Germán during my visiting period at the Universidad de San Martin (UNSAM) was an very useful and inspired, and I am very grateful with the university and its faculty, Instituto de Altos Estudios Sociales (IDAES), for hosting me for the period August-December 2018 and July-September 2019. A special mention is dedicated to Fabian Amico, who discussed my work during the Ph.D. student Seminar at UNSAM visiting period. His discussion was very helpful in improving the second essay. During the PhD I had the opportunity to attend excellent lectures and to learn from professors who motivated me greatly through their knowledge and passion, especially Fabio Petri and Ugo Pagano. I would like to thank Prof. Petri and Andre Cieplinski for the interesting suggestions they made to my work, which substantially improved it. Andre discussed, in a very constructive way, my first essay during our annual meeting at Pontignano and I will always be grateful to him for his intellectual support. I am also very thankful with friends and colleagues, such as Guido Ianni, Santiago Gahn and Gabriel Brondino, for having read and discussed my ideas and preliminary drafts with them. I shared with them wonderful times during my years in Italy. 4 GLOSSARY OF