The Permanent Stalemate
Argentina is but an extreme example of the huge corporate state that has emerged gradually almost everywhere in the world, but particularly in the industrial and semiindustrial West. Two major wars and the Great Depression have led to the growth of a vast, active, interventionist bureaucracy that is buttressed by various clientela who accept its existence in return for the security and favors it offers. Whether operating behind the facade of a parliamentary system or more openly through the rule of a military-technocratic alliance, the interaction of high civil servants and organized interests increasingly generates official policy. Such a corporativist system has an innate tendency to grow, in Parkinsonian fashion, as it seeks to create an ever more perfect steady state through the control of all conceivable variables that might disrupt society's equilibrium. Its growth, however, must be nurtured by larger and larger inputs of revenue and credit. In the process, it consumes an increasing amount of capital that might otherwise go toward productive investment in the private sector while simultaneously burdening private citizens with higher taxes. Therein lies the real contradiction of this pluralistic, bureaucratic system: by its voracious consumption, its profligate spending, and its complicated red tape it ruins the nation's currency and credit. The result is stagflation--stagnant production coupled with high inflation. Yet, to reform the system is extremely difficult, and perhaps impossible. No group is willing to give up its niche in the corporate state, especially when a deteriorating economy makes life more precarious. Moreover, to the extent that reform requires political action, the bureaucrats are in a position to prevent its implementation. The great political challenge of Western capitalism in the last decades of the twentieth century is to trim down the state and revitalize the private sector; but for the present our concern is to summarize this phenomenon as it pertains to Argentina.