The Nazis Are Taking Over Argentina
“Poverty is the parent of revolution and crime,” observed Aristotle, and, indeed, history provides several profound examples of this fact.[1] Within the past decade, an economic crisis in Argentina grew into political chaos which resulted in the office of president changing hands five times in eighteen months.[2] The county’s economic downfall was due, in large part, to policies endorsed by the International Monetary Fund, which, when they were discontinued, left Argentina with record-breaking international debt.[3] Debt also afflicted Germany after World War I as they were forced to pay exorbitant reparations under the Treaty of Versailles. While the Weimar Republic tried to reasonably address this obligation, its policies merely sparked hyperinflation and could not stop the inevitable discontent of the German people that ultimately led to the rise of the Nazi power. [4] These two cases demonstrate that countries punished with great international debts are fertile breeding grounds for political upheaval and provide the motivation for people to back new and more extreme leadership.
The political turmoil in these countries began with economic changes that the government was powerless to stop. Beginning in the 1980’s, Argentina received loans from the IMF, which gave the IMF a certain amount of say in the economic policies of the Argentine government.[5] The IMF, deciding to make Argentina its poster child of prosperity, spent billions to back various economic policies, most significantly the pegging of the Argentine peso to the American dollar, setting a fixed exchange rate.[6] IMF policies were often supported by Argentine elites, who hoped to grow their fortune through the deregulation of commerce. Along the Argentine economy grew rapidly in the 1990’s[7], these policies also involved numerous foreign commitments, so that when the IMF withdrew its support, Argentina was left with $155 billion of foreign debt.[8] The inevitable crisis struck in December of 2001[9], leaving the Argentine government to choose between paying off its debtors, often very powerful foreign banks, and caring for its destitute citizens.[10] The German government, forced by World War I’s victors to sign the malicious treaty, was almost powerless in preventing economic collapse. A mass printing of Reich marks, about 496.5 quintillion,[11] was the only way for the government to prevent an embarrassing incident such as when the French forces crossed the German border to collect overdue payments.[12]
In both Argentina and Germany, social turmoil stemmed from the fact the citizens’ daily lives had become unbearable. In Argentina, over half of the population was living below the poverty line. Unemployment reached 20%,[13] while the exchange rate, after the peso was no longer pegged to the dollar, fell by 75%.[14] Malnutrition was wide-spread, and reportedly killed 30 children every day.[15] The government no longer paid employees in pesos, but rather in a type of “I.O.U.”[16] The flooding of world markets with Reich marks caused staggering hyperinflation; in the 1920’s, an American penny was worth 42 billion marks. Poverty and unemployment had likewise struck in German, and was worsened by the stock market crash of 1929, particularly because of the loss of support from other countries.[17] These conditions fed a raging fire within Argentine and German citizens, which would force their leaders out of power.
In both Argentina and Germany, there were great disturbances in reaction to the crisis, and anger which fell upon scapegoats more so than debtors themselves. Through days of deadly rioting and looting in Buenos Aires, Argentines demanded a more democratic government and a less corrupt government. The tensions were enough to force several presidents into resignation.[18] In Germany, the people used the crisis as an excuse to expose their anti-Semitism. Out of their poverty also rose a fear of communism; these two factors sent the people looking toward the Nazi’s, who, in power, refused to pay the reparations and punished the Jews for their supposed role in the crisis.[19]
In the midst of this chaos in both countries, the people sought a new leadership that could effectively make decisions, deal with the crisis, and generally “rule with a firm grip.”[20] For Argentines, their ultimate choice for leader was Nestor Kirchner, who campaigned on a promise to not “pay the debt at the cost of sentencing Argentines to hunger and exclusion.”[21] Ironically, the people who so strongly demanded a more democratic government now had a president elected with only 22% of the vote, the lowest percentage in the history of the Argentine democracy.[22] Kirchner, however, has been received very well by the people and, late in 2003, had an 80% approval rate.[23] For most Germans, however, Hitler’s leadership did not match the idealistic, or moral, expectations of many Germans. While Hitler certainly ruled with authority, his anti-Semitic policies were disgusting and he ultimately brought a worse situation for Germany by his instigation of conflicts that brought Germany into WWII. Both countries citizens had reached a point of desperation, and were willing to compromise their values to find a leader who could feed their families.
History provides several profound examples of political chaos arising in countries under the burden of international debts. In the last decade in Argentina and in post-WWI Germany, the governments were forced to watch as their economies collapsed, and forced to choose between serving their people or paying the debt. Trapped in these situations, the governments had no choice but to take actions which would only worsen their citizens’ plight. Facing starvation, unemployment, and terrible inflation, the Argentine and German peoples naturally sought new leadership. In Argentina, this political bedlam was evident in a quick succession of interim presidents; in Germany, the upheaval allowed Hitler’s rise to power. In general, the events sparked by this debt were characterized by violence, immorality, chaos, and suffering. International debt, often an issue overlooked in history, has the undeniable ability to ruin a nation, not only financially, but also politically and morally.
[1] Moncur, Michael. “Quotes by Subject: Poverty.” 2005. The Quotations Page. 17 Dec 2006.
[2] Schemmel, B. “Argentina” 2006. Rulers. 17 Dec 2006.
[3] “Argentina blames IMF for crisis.” 31 Jul 2004. BBC News Online. 17 Dec 2006.
[4] “Germany and the Treaty of Versailles.” 11 Jul 2004. Schools History.
[5] Macewan, Arthur. “Economic Debacle in Argentina: The IMF Strikes Again.” Dollars and Sense Magazine. Mar/Apr 2002.
[6] “Argentina blames IMF for crisis.” 31 Jul 2004. BBC News Online. 17 Dec 2006.
[7] Macewan, Arthur. “Economic Debacle in Argentina: The IMF Strikes Again.” Dollars and Sense Magazine. Mar/Apr 2002.
[8] Macewan, Arthur. “Economic Debacle in Argentina: The IMF Strikes Again.” Dollars and Sense Magazine. Mar/Apr 2002.
[9] “Argentina blames IMF for crisis.” 31 Jul 2004. BBC News Online. 17 Dec 2006.
[10] Weisbrot, Mark and Dean Baker. “What Happened To Argentina?” 31 Jan 2002. Center for Economic and Policy Research. 17 Dec 2006.
[11] Sennholz, Hans F. “Hyperinflation in Germany.” 27 Oct 2006. The Age of Inflation. Mises Institute. 17 Dec 2006.
[12] “Germany and the Treaty of Versailles.” 11 Jul 2004. Schools History.
[13] Macewan, Arthur. “Economic Debacle in Argentina: The IMF Strikes Again.” Dollars and Sense Magazine. Mar/Apr 2002.
[14] Contreras, Joseph and Peter Hudson. “A Comeback?” Newsweek. 20 Oct 2003. 60-62.
[15] Haskel, Guillermo. “Kirchner takes office today.” Buenos Aires Herald. 25 May 2003. Buenos Aires Herald Online Archive. 2 Dec 2006
[16] Klein, Naomi. “IMF Go to Hell.” 19 Mar 2002. ZNet: Argentina Watch.17 Dec 2006.
[17] Sennholz, Hans F. “Hyperinflation in Germany.” 27 Oct 2006. The Age of Inflation. Mises Institute. 17 Dec 2006.
[18] Macewan, Arthur. “Economic Debacle in Argentina: The IMF Strikes Again.” Dollars and Sense Magazine. Mar/Apr 2002.
[19] “The Rise of Hitler.” 11 Jul 2004. Schools History.
[20] “The Rise of Hitler.” 11 Jul 2004. Schools History.
[21] Garcia, Marcelo. “Moving step by step tutorial toward ‘a normal country.’” Buenos Aires Herald. 25 May 2003. Buenos Aires Herald Online Archive. 2 Dec 2006 ARGENTINA>
[22] “Argentina.” The World Factbook. 30 Nov 2006. Central Intelligence Agency. 2 Dec 2006. https://www.odci.gov/cia/publications/factbook/geos/ar.html
[23] Contreras, Joseph and Peter Hudson. “A Comeback?” Newsweek. 20 Oct 2003. 60-62.
The political turmoil in these countries began with economic changes that the government was powerless to stop. Beginning in the 1980’s, Argentina received loans from the IMF, which gave the IMF a certain amount of say in the economic policies of the Argentine government.[5] The IMF, deciding to make Argentina its poster child of prosperity, spent billions to back various economic policies, most significantly the pegging of the Argentine peso to the American dollar, setting a fixed exchange rate.[6] IMF policies were often supported by Argentine elites, who hoped to grow their fortune through the deregulation of commerce. Along the Argentine economy grew rapidly in the 1990’s[7], these policies also involved numerous foreign commitments, so that when the IMF withdrew its support, Argentina was left with $155 billion of foreign debt.[8] The inevitable crisis struck in December of 2001[9], leaving the Argentine government to choose between paying off its debtors, often very powerful foreign banks, and caring for its destitute citizens.[10] The German government, forced by World War I’s victors to sign the malicious treaty, was almost powerless in preventing economic collapse. A mass printing of Reich marks, about 496.5 quintillion,[11] was the only way for the government to prevent an embarrassing incident such as when the French forces crossed the German border to collect overdue payments.[12]
In both Argentina and Germany, social turmoil stemmed from the fact the citizens’ daily lives had become unbearable. In Argentina, over half of the population was living below the poverty line. Unemployment reached 20%,[13] while the exchange rate, after the peso was no longer pegged to the dollar, fell by 75%.[14] Malnutrition was wide-spread, and reportedly killed 30 children every day.[15] The government no longer paid employees in pesos, but rather in a type of “I.O.U.”[16] The flooding of world markets with Reich marks caused staggering hyperinflation; in the 1920’s, an American penny was worth 42 billion marks. Poverty and unemployment had likewise struck in German, and was worsened by the stock market crash of 1929, particularly because of the loss of support from other countries.[17] These conditions fed a raging fire within Argentine and German citizens, which would force their leaders out of power.
In both Argentina and Germany, there were great disturbances in reaction to the crisis, and anger which fell upon scapegoats more so than debtors themselves. Through days of deadly rioting and looting in Buenos Aires, Argentines demanded a more democratic government and a less corrupt government. The tensions were enough to force several presidents into resignation.[18] In Germany, the people used the crisis as an excuse to expose their anti-Semitism. Out of their poverty also rose a fear of communism; these two factors sent the people looking toward the Nazi’s, who, in power, refused to pay the reparations and punished the Jews for their supposed role in the crisis.[19]
In the midst of this chaos in both countries, the people sought a new leadership that could effectively make decisions, deal with the crisis, and generally “rule with a firm grip.”[20] For Argentines, their ultimate choice for leader was Nestor Kirchner, who campaigned on a promise to not “pay the debt at the cost of sentencing Argentines to hunger and exclusion.”[21] Ironically, the people who so strongly demanded a more democratic government now had a president elected with only 22% of the vote, the lowest percentage in the history of the Argentine democracy.[22] Kirchner, however, has been received very well by the people and, late in 2003, had an 80% approval rate.[23] For most Germans, however, Hitler’s leadership did not match the idealistic, or moral, expectations of many Germans. While Hitler certainly ruled with authority, his anti-Semitic policies were disgusting and he ultimately brought a worse situation for Germany by his instigation of conflicts that brought Germany into WWII. Both countries citizens had reached a point of desperation, and were willing to compromise their values to find a leader who could feed their families.
History provides several profound examples of political chaos arising in countries under the burden of international debts. In the last decade in Argentina and in post-WWI Germany, the governments were forced to watch as their economies collapsed, and forced to choose between serving their people or paying the debt. Trapped in these situations, the governments had no choice but to take actions which would only worsen their citizens’ plight. Facing starvation, unemployment, and terrible inflation, the Argentine and German peoples naturally sought new leadership. In Argentina, this political bedlam was evident in a quick succession of interim presidents; in Germany, the upheaval allowed Hitler’s rise to power. In general, the events sparked by this debt were characterized by violence, immorality, chaos, and suffering. International debt, often an issue overlooked in history, has the undeniable ability to ruin a nation, not only financially, but also politically and morally.
[1] Moncur, Michael. “Quotes by Subject: Poverty.” 2005. The Quotations Page. 17 Dec 2006.
[2] Schemmel, B. “Argentina” 2006. Rulers. 17 Dec 2006.
[3] “Argentina blames IMF for crisis.” 31 Jul 2004. BBC News Online. 17 Dec 2006.
[4] “Germany and the Treaty of Versailles.” 11 Jul 2004. Schools History.
[5] Macewan, Arthur. “Economic Debacle in Argentina: The IMF Strikes Again.” Dollars and Sense Magazine. Mar/Apr 2002.
[6] “Argentina blames IMF for crisis.” 31 Jul 2004. BBC News Online. 17 Dec 2006.
[7] Macewan, Arthur. “Economic Debacle in Argentina: The IMF Strikes Again.” Dollars and Sense Magazine. Mar/Apr 2002.
[8] Macewan, Arthur. “Economic Debacle in Argentina: The IMF Strikes Again.” Dollars and Sense Magazine. Mar/Apr 2002.
[9] “Argentina blames IMF for crisis.” 31 Jul 2004. BBC News Online. 17 Dec 2006.
[10] Weisbrot, Mark and Dean Baker. “What Happened To Argentina?” 31 Jan 2002. Center for Economic and Policy Research. 17 Dec 2006.
[11] Sennholz, Hans F. “Hyperinflation in Germany.” 27 Oct 2006. The Age of Inflation. Mises Institute. 17 Dec 2006.
[12] “Germany and the Treaty of Versailles.” 11 Jul 2004. Schools History.
[13] Macewan, Arthur. “Economic Debacle in Argentina: The IMF Strikes Again.” Dollars and Sense Magazine. Mar/Apr 2002.
[14] Contreras, Joseph and Peter Hudson. “A Comeback?” Newsweek. 20 Oct 2003. 60-62.
[15] Haskel, Guillermo. “Kirchner takes office today.” Buenos Aires Herald. 25 May 2003. Buenos Aires Herald Online Archive. 2 Dec 2006
[16] Klein, Naomi. “IMF Go to Hell.” 19 Mar 2002. ZNet: Argentina Watch.17 Dec 2006.
[17] Sennholz, Hans F. “Hyperinflation in Germany.” 27 Oct 2006. The Age of Inflation. Mises Institute. 17 Dec 2006.
[18] Macewan, Arthur. “Economic Debacle in Argentina: The IMF Strikes Again.” Dollars and Sense Magazine. Mar/Apr 2002.
[19] “The Rise of Hitler.” 11 Jul 2004. Schools History.
[20] “The Rise of Hitler.” 11 Jul 2004. Schools History.
[21] Garcia, Marcelo. “Moving step by step tutorial toward ‘a normal country.’” Buenos Aires Herald. 25 May 2003. Buenos Aires Herald Online Archive. 2 Dec 2006 ARGENTINA>
[22] “Argentina.” The World Factbook. 30 Nov 2006. Central Intelligence Agency. 2 Dec 2006. https://www.odci.gov/cia/publications/factbook/geos/ar.html
[23] Contreras, Joseph and Peter Hudson. “A Comeback?” Newsweek. 20 Oct 2003. 60-62.