Since the appearance of The Crisis of Argentine Capitalism in the spring of 1990, people have asked me whether I would revise my pessimistic conclusions in light of President Carlos Menem's progress in attacking many of Argentina's deep-rooted economic problems. Like most other Argentina-watchers, I am impressed by President Menem's boldness in breaking with the past and his courage in supporting his economics ministers as they struggle for reform in the face of relentless political pressure. If ever a governing team deserved success, it is this one; and at this writing Menem's Justicialist party has just won a resounding victory in the September 1991 congressional and gubernatorial elections. The triumph coincided with a tremendous boom on the Buenos Aires stock exchange, which many believe to be an expression of public confidence in Domingo Cavallo, the economics minister. Political commentators are calling Cavallo a genius, although Menem also comes in for his share of the praise for allowing the economic program to proceed despite the approaching elections and the hysterical calls from Justicialist politicians and labor leaders for a respite. Though behind in the polls as late as July, Menem gambled, and the public repaid him with their confidence.
Elected in May 1989, Menem took office under very inauspicious circumstances. His inauguration was moved forward from December to July after rioting, looting, and bombing in Argentina's main cities convinced lame-duck president Raúl Alfonsín to surrender power early. Runaway inflation, falling production, and high unemployment combined to make Alfonsín so unpopular that when he announced a set of emergency measures at the end of May he found the country to be ungovernable. A brief postmortem on Alfonsín's administration may illustrate the lessons Menem had to learn if he was to avoid a similar fate.
When Alfonsín became president in late 1983 he faced two fundamental tasks. The first was to institutionalize democracy by making the military subordinate itself to civilian rule. Humiliated