This article was published in La Nación on June 22nd, 2021.
If we add pasty ingredients to the many serious problems we face as Argentines, confusion naturally increases. It is one thing to adhere to Keynesian recipes – which in themselves create enough problems – and quite another to brag about being a dictator in overtly fascist ways.
Fortunately, Biden has put the Russian and Venezuelan autocracies in their place in a forceful way, in stark contrast to our local Peronists. He counteracts the xenophobia of his predecessor, who ended his term with an embarrassing episode of pretending to ignore the rules of the electoral process. He failed to accept a result that was recognized by his own vice president, the 50 states, and by 61 federal and local judicial instances (including 8 judges appointed by Trump himself). Biden also announced the withdrawal of troops from Afghanistan after 20 years, finding himself basically in the same initial situation, recalling the fiascos in Korea, Vietnam, Iraq, Bosnia, Kosovo and Somalia, to say nothing of the military interventions in Central America.
At any rate, Keynes and Mussolini have different preferred methods and ideological bases. The first erupts again on the American scene, while the second has been present in Argentina in one way or another since the military coup of 43.
It is appropriate to review the central points of John Maynard Keynes’ theory, refuted over and over again, among others, by the Nobel laureates in economics Milton Friedman, James M. Buchanan, Gary Becker, Vernon L. Smith. George Stigler and Fredrich Hayek. In Keynes’s foreword to the German edition of the General Theory of Occupation, Interest, and Money in 1936, in the midst of the Nazi era, he wrote: “The theory of global production that is the goal of this book can be applied much more easily under the conditions of a totalitarian State than under the production and distribution of a certain volume of goods obtained through free competition and an appreciable degree of laissez-faire ”. A confession of a party relay test.
In that book, he advocates for “the euthanasia of the rentier and, consequently, the euthanasia of the cumulative oppressive power of the capitalists to exploit the value of the scarcity of capital.” Likewise, with respect to customs barriers, he proclaims “the element of scientific truth of the mercantilist doctrine” (meaning protectionism) and, in times of capital consumption, advises the deterioration of wages through inflation maintaining the nominal levels so recipients to believe they maintain their income: “The solution will usually be found by altering the monetary standard or the monetary system in such a way as to raise the quantity of money.”
It is truly curious, but one of the most striking myths of our time is that Keynesianism saved capitalism from collapsing in the 1930s. It was exactly the opposite: the crisis didn’t end while the policies that arose from it lasted and the insistence in continuing with those recipes the crisis lasted. The collapse was conceived as a consequence of monetary disorder when the de facto abandonment of the gold standard imposed discipline (“the ancient relic”, according to Keynes). This happened in the Genoa and Brussels Agreements of the 1920s, which established a system in which they allowed the issuance of dollars to be unleashed.
This way, the United States has ventured into a policy of erratic expansion (and contraction) similar to the one which caused the boom of the 1920s and the subsequent crash of 29. This was followed by the rest of the world, which at that time used the US dollar as its currency. Thus, dollar reserves lead to an expansion of their local currencies against the rise of the US currency.
As Anna Schwartz, Benjamin Anderson, Lionel Robbins, Murray Rothbard, Jim Powell, and so many other thinkers explain, Roosevelt, in contrast to the promises he had made on his campaign to evict Hoover, chose to emphasize monetary policy and excessive state spending in the best Keynesian style. To this, he added an attempt – that fortunately failed – to domesticate the Supreme Court, and legislation that created absurdly regulatory entities for industry, commerce, and banking, intensifying bankruptcies and wage-fixing. This created a debacle, leading to fourteen million unemployed who were later somewhat disguised by the war and finally resolved when Truman removed the controls. In chapter 22 of the aforementioned work, Keynes summarizes his idea by writing: “In conclusion, I affirm that the duty to order the current volume of investment cannot be left with guarantees in the hands of individuals.”
The fascist style is different; its central axis consists of the Argentine copy of Mussolini’s Labor Letters regarding authoritarian union organizations. Perón’s lexicon is in line with the dictators of the region: “If the Soviet Union had been in a position to support us in 1955, I could have become the first Fidel Castro on the continent.” In correspondence with his lieutenant John William Cooke he wrote: “Those who take over an oligarch’s house and arrest or execute the owners will stay with it. Those who take a stay in the same conditions will keep everything, the same as those who occupy establishments of the gorillas and enemies of the people. The NCOs who kill their bosses and officers and take over the units will take command of them and will be the bosses of the future. The same will apply to simple soldiers who carry out military action ”.
Other well-known phrases include “To our enemy, not even justice“, “We will raise gallows throughout the country to hang our opponents” and a laudatory correspondence with Mao. Some applauders and some who were distracted have affirmed that “the third Perón” was different, without considering the alarming corruption his government carried out through his economy minister José Ber Gelbard, who also caused a serious inflationary process, which naturally he called “zero inflation ”. His third period in office saw a return to the maximum prices of the first two Peronist governments, in the end, markets didn’t even have white bread. He promoted his other minister, curiously in charge of social welfare, from corporal to general commissioner in order to establish the Triple-A criminal organization. In this context, Perón, who has encouraged terrorists and congratulated them on their murders, realized that these movements were aimed at taking over his space of power and decided to fight them.
In summary, it is appropriate to mark differences in behavior and approach between Biden's policies and our autochthonous Peronism. We may disagree with both positions, but it is not conducive to confuse duck with coot, since it does not help the analysis of two conceptual scaffolds that slide down different lifts.
