20 January 2009

The K's and the redistribution of wealth

The K's want a grand redistibution of wealth in Argentina. Ultimately this means taking from the rich and giving to the poor. This has been a standard practice in Argentina since the days of Peron and has been tried in so many other places around the world. To be honest, I cannot think of a single country where it has been successful, except for the rulers like the Kircheners and all their new found wealth (but more on that in another post)

Let me state that I do believe in a fairer distribution of income. The more well off have a duty and obligation to help those who are less fortunate. Where, in terms of state policy, this goes wrong is that normally, and Argentina is certainly no exception, the first people to be "helped" are the ruling cabal ... namely the Kircheners and their allies. Only after their insatiable appetite has been satisfied does anything trickle down to those in true need. Because the rich tend to be better educated they understand this is the consequence of redistribution schemes and, therefore, rarely if ever support them. I honestly believe that if the money actually made it to those in need there would be much more acceptance by those more well off.

There is no doubt Argentina is plagued by poverty. I see it every day, cartoneros on their bicycles, mothers begging in the street, children washing windshields and not in school, not to mention the villas miserias. It is a depressing site and depressing state of affairs. What I have come to understand, and I expect you to enlighten me if I am wrong, is that there are two kinds of poor.

The first are the working poor, those who work en negro whose wages are low, often with little education, but with a strong work ethic and a sense of self reliance. A belief that their hard work will make life better for their children if not for them. These people, and there are many, deserve our respect and help. They are honorable people striving to make a better living.

The second group does not share those values of hard work and honesty. They expect that Government to give whatever they want or need. There is no need to work, let others pay for their existence. These are the piqueteros and D'Elias' of this world. They have no apparent self-respect. The K's use this group to keep a hold on power. They pay them with tax money to protest, to beat up, to disrupt. When we had the farmers strike these were the people the K's bussed into the city to beat up the legitimate protesters, whose leader (D'Elia) said he wanted to kill the rich. These are the people Christina paid to go to Salta to applaud her. While every living person has value I would prefer 1 of the working poor to 1000 of this group.

So, how does wealth get redistibuted. First, EDUCATION. Without education there is no future for any citizen. Argentina has been a pioneer in free education for well over 100 years. In general the population is very well educated. Despite a history of public education the system seems to be failing. Schools are in disrepair, there are not enough schools, and many children do not attend school. Money that has been promised for new schools, to improve existing schools and for education often does not seem to make it to the intended recipients. Hmm, maybe there is some corruption involved. Many times, too many times, parents would rather have their children begging on the streets than getting an education. The value of education is not preceived as important to many parents, especially when they need money to put food on the table. Without the feeling that education is both important and neccesary poverty will continue to exist.

Second, PUBLIC WORKS. In the midst of the Depression in the United States in the 1930's President Roosevelt embarked on a remarkable series of public works. Anyone that wanted a job could have one, building roads, working in the national parks, excpanding the power grid, etc. All meaningful work that enabled America's infrastructure to expand, excellerate and improve the lives of everyone. The pay was not always the best, but it was meaningful work that instilled a sense of self worth in the individual. Why is this not possible in Argentina? I know, I know the politicians are so corrupt the money would never make it down those actually doing the work. Think of how the lives of many would change and would be improved if only the government did what was possible, not what was expedient.

Finally, TAXATION. If, and that is a BIG IF, the retenciones actually made it back to the provinces where the crops were grown I would wholeheartedly support the system. Knowing that the money will NOT make it back there and only go to line the pockets of the K's, the piqueteros and the city/province of Buenos Aires I cannot support it. Why should the farmers give up their money to support the very people who hate them? Farming is not easy, success is not a given, it is hard work and for people like the K's and D'Elia to criticize them as they do is hypocracy. Trust is not easily won and once lost is very hard to regain. The farmers do not trust the government, they have been fooled too many times. At the same time a way has to be found to get the farmers to actually feed Argentinos and not turn the country into one big soybean field. Tax incentives would help this as well, food IS too costly in a country as rich as Argentina.

So what conclusions does this outsider have. (1) If the government actually put the money it collects to its proper use the culture of work in Argentina would, over time, change dramatically. (2) It would help if the Argentine voter actually voted out of office those who are using the government as their private bank account. (3) Of course if things continue the way are and people don't become indignant enough to make the country work, we can always just change the name of the country to Zimbabwe.

But hey what do I know, I am only an extranjero.


  1. Good diagnosis. I disagree on a few minor points, especially the "two kinds of poor people" thing - it's a continuum, not a clean split.

    The real problem is lack of consistent policies that are stable in time. With a welfare program that pays poor people (say) 300 pesos per child per month as long as they attend school every day, structural poverty could be remedied, but this has to be done for no less than 10 or 15 years, no matter what, even if you have to sacrifice nice public works and tax the hell out of the rest of society. In the long term it will be shown to be beneficial to all. But in Argentina "long term" means "until I get reelected".

  2. Pablo, thanks. My experience here is that there really are 2 kinds of poor (the same is true in the US). The honest, working poor and the poor-who-don't-want-to-work-but-want-the-government-to-give-them-everything. Maybe at one time the second group was a part of the first group and then lost hope, I don't know.

    I like your idea about paying familes to get kids to go to school (as opposed to begging), as well as your definition of "long term". THANKS!

  3. You explain the situation very well indeed. I couldn't have put it any better myself.