Argentina is probably the most industrialized major country in the so-called Third World. Well over 60 per cent of its population live in towns, a proportion higher than that in many European countries. The urban and rural proletariat, organized in solidly developed trade unions, comprises two-thirds of its total work-force. This singular configuration for a peripheral capitalist country has created forms of political struggle not to be found elsewhere in the underdeveloped world. Latin America has in recent years been the focus of repeated debate on the role of guerrilla movements and strategy. Argentina is the one country in the continent which last year, on the contrary, witnessed a mass urban insurrection of a classical type, led by the industrial working-class. The background to the great explosion of May 1969 in Córdoba and Rosario must be sought in the complex history of Argentina since the eviction of Peron, and the modifications of its economy and society that were ushered in by it. This history has many lessons for Marxists everywhere, since the imperialist strategy operative in Argentina in the last decade represents a pilot experience for many other non-metropolitan countries, and has important implications for our understanding of the global pattern of capitalism in the present epoch. Likewise, the response of the oppressed masses in Argentina to this strategy, culminating in the events of May 1969, may presage crucial future aspects of class struggle elsewhere. It is therefore necessary to study both strategy and response very carefully.

From the fall of Peron in September 1955 to the military putsch of June 1966, the dominant force in Argentinian political life was the landowning oligarchy and the sectors socially and ideologically linked to it. Since 1943 the Argentinian oligarchy has never been strong enough to exercise direct political power. In consequence its policy has always been to leave the State in the hands of formally anti-oligarchic parties which it could trust, however, to defend its wider agrarian interests. Assured of the latter, the landowners could then obtain decisive advantages through such organizations as the Rural Argentine Society and use of the newspapers La Nación and La Prensa, which it controlled. In 1945 the oligarchy supported the Democratic Union (formed by the Radical Party, the Progressive Democrats, the Socialist and Communist Parties) in opposition to Peronism. The oligarchy in 1955 again took over the levers of economic power without attempting to exercise direct political power. Henceforward no Government plan could be implemented which did not substantially respect its interests. The September Restoration had two central objectives: (1) to abolish all the devices protecting the accumulation of national capital which had been erected in the epoch of import substitution, especially during the Peronist period (2) to establish a new economic policy whose principal beneficiary would be the agricultural sector, and within this, the landowning class. The first objective was achieved by a combination of measures which dismantled all protectionist defences of the Argentinian economy: the State monopoly of foreign trade was abolished, bank deposits were de-nationalized, exchange control was abandoned and credit to small and middle industry was drastically curtailed. The second objective was accomplished by transferring resources to the agricultural sector by means of a succession of devaluations. Policies so antagonistic to the interests of the masses were, for obvious reasons, unrealizable within the framework of a representative democracy. Electoral fraud, through the proscription of Peronism, became the root of all Argentinian politics.

The consequences of this liberalization of the Argentinian economy were, however, not those hoped for by its promoters. Instead of eliminating ‘artificial industries’ and bringing about a return of the pastoral Argentina of the Centenary,footnote¹ it brought about an absolute increase in the investments of foreign monopoly capital in industry. In this way a new sector acquired importance, opposed as much to the agrarian export oligarchy as to the industrial bourgeoisie which had emerged as a result of import substitution.footnote² At a certain stage of its development the interests of international capital became incompatible with the economic policy which prevailed, in particular under the Illia government, and with the financial and political instability inherent in the neo-oligarchic régime. The consequence was the military coup of 1966, led by the former Commander-in-Chief of the Army, General Carlos Onganía.

Since that time, control of the Argentinian State has been in the hands of big monopoly capital, whose nucleus is formed by North American enterprises. This change has radically modified the contradictions which define Argentinian society. During the import substitution period of Peron’s rule, the traditional oligarchy and its satellite sectors were confronted by a nationalist State—based on the Army and the unions—which encouraged autonomous industrial growth by confiscating a substantial proportion of agricultural profits. Today, by contrast, the principal contradiction is that which opposes big monopoly capital to the popular classes affected by its expansion. Industrialization by itself is not a sufficient anti-imperialist strategy, as any analysis of the present régime’s strongly industrializing tendencies will show. Mechanical application of past schemas—oligarchy plus imperialism equals monoproductive agricultural stagnation—is to fall into the political and ideological trap of big capital: the present régime has attempted to create populist support on precisely this misunderstanding, claiming for itself an industrializing role alone capable of overcoming the dichotomy between Peronism and Anti-Peronism. The traditional organizations—parties and trade-unions—found it very difficult to adapt to the change in strategy which the new situation demanded. The result was that they remained impotent and inert for three years of the arbitrary power of the Onganía régime. The events of May 1969, which culminated in the explosion of Córdoba, unfolded outside the entire traditional political framework. The importance of the upsurge of May is that it constituted the first political response to the new conjuncture and indicated the direction of future mass struggles in Argentina.

The decisive change in the Argentinian economy from the fifties onwards was the penetration of industry by imperialist capital. By contrast with the earlier epoch of domination by British imperialism (Argentina was within the British Imperial sphere up to the Second World War), investment was now directed towards the basic productive sectors. In the phase of British domination, foreign capital was primarily oriented towards trade, finance, public works and government loans, while the sector of physical production—agriculture—remained in the hands of an indigenous landowning class. The present phase, on the other hand, is characterized by large-scale North American investments in an industrial sector which has come to predominate within the economy as a whole. This development, indeed, is not limited to Argentina but is to be found throughout Latin America where there has notoriously been for two decades now a growing monopolization of industry by North American capital.

The main features of this expansion are well-known. Between 1951 and 1963 the United States exported 11,000 million dollars of long-term net capital to Latin America. Two-thirds of this sum was private investment, the bulk of it direct investment. The latter grew at a vertiginous pace: $2,700 million in 1943, $4,400 in 1950 and $8,200 million in 1961. A high degree of concentration accompanied it. In 1950, 300 companies with a working capital of 50 million dollars controlled 90 per cent of us investments in Latin America. Moreover, these investments were also very concentrated by region. A quarter of the continent received three-quarters of the capital outflow. Lastly, the sectors mainly concerned were either extractive enclaves of great strategic importance—above all, of course, oil—or monopolization of the industrial sector created in the most advanced of these countries by import substitution processes.

Argentina has notoriously belonged to the latter category. US investments were modest and stationary between 1929 and 1950. From then onwards, they increased constantly. From $81 million between 1951 and 1955, they leapt to $196 million in 1956–60 and passed the 300 million mark in 1961–62. The crucial change occurred in the year 1955, when Peron fell and the economic liberalization which ensued produced a massive rush of North American capital. Indeed, the vast bulk of the huge increase in us investment in Latin America in the second half of the fifties went into only four countries: Argentina, Venezuela, Panama and Cuba. Thus total us investments in 1951–55 were $750 million; in 1956–60 this shot up to $3,332 million. These four countries absorbed $661 million in the first five years, and $2,200 in the next five years—their share rising from 38 per cent to 66 per cent of the total. During the same years, Brazil, Mexico and Argentina accounted for 70 per cent of the public loans of the Eximbank, and Argentina and Brazil alone for 75 per cent of the loans and subsidies granted under the Mutual Security Programmes.