University of Tennessee, Knoxville TRACE: Tennessee Research and Creative Exchange Masters Theses Graduate School 12-2008 From authoritarian dirty war to neoliberal, 'democratic' class war neoliberalism as class struggle in Argentina Aaron Thomas Rowland University of Tennessee Follow this and additional works at: https://trace.tennessee.edu/utk_gradthes Recommended Citation Rowland, Aaron Thomas, "From authoritarian dirty war to neoliberal, 'democratic' class war neoliberalism as class struggle in Argentina. " Master's Thesis, University of Tennessee, 2008. https://trace.tennessee.edu/utk_gradthes/5753 This Thesis is brought to you for free and open access by the Graduate School at TRACE: Tennessee Research and Creative Exchange. It has been accepted for inclusion in Masters Theses by an authorized administrator of TRACE: Tennessee Research and Creative Exchange. For more information, please contact [email protected]. To the Graduate Council: I am submitting herewith a thesis written by Aaron Thomas Rowland entitled "From authoritarian dirty war to neoliberal, 'democratic' class war neoliberalism as class struggle in Argentina." I have examined the final electronic copy of this thesis for form and content and recommend that it be accepted in partial fulfillment of the equirr ements for the degree of Master of Arts, with a major in Sociology. Jon Shefner, Major Professor We have read this thesis and recommend its acceptance: Accepted for the Council: Carolyn R. Hodges Vice Provost and Dean of the Graduate School (Original signatures are on file with official studentecor r ds.) To the Graduate Council: I am submitting herewith a thesis written by Aaron Thomas Rowland entitled “From Authoritarian Dirty War to Neoliberal, ‘Democratic’ Class War: Neoliberalism as Class Struggle in Argentina.” I have examined the final electronic copy of this thesis for form and content and recommend that it be accepted in partial fulfillment of the requirements for the degree of Master of Arts, with a major in Sociology. Jon Shefner Major Professor We have read this [dissertation or thesis] and recommend its acceptance: Paul K. Gellert Stephanie A. Bohon Accepted for the Council: Carolyn R. Hodges Vice Provost and Dean of the Graduate School [Original signatures are on file with official student records.] From Authoritarian Dirty War to Neoliberal, ‘Democratic’ Class War: Neoliberalism as Class Struggle in Argentina A Thesis Presented for the Master of Arts Degree The University of Tennessee, Knoxville Aaron Thomas Rowland December 2008 ii Copyright © 2008 by Aaron Thomas Rowland All rights reserved. iii Acknowledgements For Gryphon, whose entire life has coexisted with this project and my graduate school experience. Thank you Ashley for putting up with this project and helping me make it from one day to the next in these busy times. Thanks for always being there and making it worth while. Also, thank you Mom and Dad, without whom I would not have been able to make it this far. I’d also like to thank my thesis committee: Jon Shefner, Stephanie A. Bohon, and Paul K. Gellert, for their invaluable time, input, and encouragement in the writing of this thesis. iv Abstract This paper is a critical analysis of the theoretical assertions made, made by David Harvey and others, that neoliberalism is the ideological foundation for a one-sided, class- based struggle intended to restore or reconstruct the power of economic elites. Tracing neoliberalism back to its roots in the Austrian School of economics, I analyze the historical development of neoliberal theory and its critics. I show that it provides theoretical justification for elite class struggle. This theoretical argument is then grounded in a case study of Argentina’s period of neoliberal reforms. In the case of Argentina, I show that this process was one that can be classified as class-based social change. I examine how neoliberal reforms were instituted; including how they were implemented at various levels of society, how they were received, and whether they benefited elite groups at the expense of the rest of society. The intent is to create a coherent narrative of the transition to neoliberalization and then, to the period after 2001, when neoliberal reforms were largely stopped. The reforms that I study are 1) privatization of industry and services controlled by the government, 2) fiscal austerity in the form of decreased government employment and spending on social services, 3) financial and labor deregulation, and 4) trade liberalization in the form of decreased tariffs on imports. The way in which neoliberal reforms were implemented, as well as the effects they had (and continue to have) on society affect the quality (i.e. depth and breadth) of democracy in Argentina. v Table of Contents Chapter 1 Introduction ........................................................................................................ 1 Chapter 2 Neoliberalism .................................................................................................. 10 What Is Neoliberalism?................................................................................................. 10 Historical Development of Neoliberalism .................................................................... 13 Neoliberalism and the Role of the State ....................................................................... 18 Neoliberalism as a Class Project................................................................................... 27 Neoliberalism and Clientelism/Patronage Networks.................................................... 31 Chapter 3 Argentina’s Neoliberal Experience ................................................................. 34 Argentine Neoliberal Reforms...................................................................................... 35 Privatization .............................................................................................................. 38 Austerity.................................................................................................................... 42 Financial and Labor Deregulation ............................................................................ 44 Free Trade Reforms .................................................................................................. 45 The Implementation of Reforms and Their Effects ...................................................... 45 The Effect of Neoliberalization on Argentine Society ................................................. 47 The Effects of Neoliberalization on Argentine Democracy ......................................... 53 Class Warfare?.............................................................................................................. 57 Government Collapse.................................................................................................... 63 Kirchner’s Presidency................................................................................................... 67 Chapter 4 Conclusion....................................................................................................... 72 Was Argentine Neoliberalism Class Struggle?............................................................. 72 Bibliography ..................................................................................................................... 80 Vita.................................................................................................................................... 90 vi List of Figures Figure 1: Argentine Inflation Rate 1991-2000.................................................................. 48 Figure 2. Argentine Urban Unemployment Rate.............................................................. 50 Figure 3: Argentine Share of Income by Quintile 1986-2004. ......................................... 52 Figure 4: Argentine Inequality.......................................................................................... 53 Figure 5: Freedom House Ratings for Argentina, 1982-2006 .......................................... 56 Figure 6: Polity IV Scores for Argentina, 1983-2005....................................................... 57 1 Chapter 1 Introduction In his influential book, The Third Wave, Huntington (1991) describes the period 1974-1991 as the third wave of democratization to wash over the world. Mainwaring and Pérez-Liñán (2005) build off of Huntington’s work, citing several studies that support Huntington’s assertion that this third wave was one of transition to and consolidation of democracy in Latin America as well. Certainly, the region has become more politically democratic, at least in formal democratic, procedural terms, over the last twenty years. Argentina in particular has managed to move from a propensity for military intervention in domestic politics to a democracy that has been able to withstand significant economic crises without military intervention (Levitsky 2005). Although more countries have been transitioning to greater formal political equality and democracy, consolidation of economic power by multi-national corporations (and the financial and managerial elites associated with them) has also been occurring. The expansion and consolidation of capitalism during the twentieth century has produced greater and greater levels of inequality in the past thirty years. This inequality is growing both within states and between states (Callinicos 2000; Stiglitz 2002; Harvey 2003; Stiglitz 2004). According to Robinson (2006), this period of democratization