The Paralysis of the State
Argentina faced many issues--each of them significant enough to divide the country--in the years following Perón's fall. Much debate centered on how to achieve economic development, or more particularly, how to revive a formerly dynamic industrial sector. Everyone agreed that the system was stagnant, but public opinion was sharply divided on the remedies offered for revitalization. Economic liberals, blaming Perón for everything, wanted to reduce the state's role and return to free enterprise. Investment should be encouraged by restricting consumption and encouraging savings, they argued. Moreover, foreign capital should be enticed back to the country, and incentives should be offered to agriculture to produce more for export.
Economic nationalists, on the other hand, looked to a reformed state, purged of Peronist excesses, to lead the revival. They put their faith in a more socially equitable distribution of wealth as the way to encourage industrialization, arguing that a stronger domestic market would provide the incentive for industry to expand. Such industry would have to be protected from foreign competition, and agriculture, rather than producing for export, would be encouraged to supply the home market. Foreign capital had little or no place in this inward-looking strategy. It could not be allowed to penetrate essential areas of the local economy, nor would it be allowed to drain off precious capital through profit remittances. As might be expected, the nationalist position was more popular with the trade unions, smaller businessmen, and tenant farmers, whereas big business and large farming concerns tended to support liberalism.
In politics, the main issue was how to treat the Peronist masses. The military set the parameters of the possible: Perón would not be allowed back, and his party could not be permitted to win power. Beyond that, the military was as divided as the rest of the country. From the outset, military and civilian liberals faced a nagging question: Would democracy be fully restored in Argentina if the largest segment of the electorate was unable to vote for the party it pre-