Before Jorge Bergoglio’s election as the first Latin American pope in 2013, Argentina was famous for many things: tango, its magnificent pampas, the beautiful late-nineteenth century architecture that marks much of Buenos Aires, to name just a few. Unfortunately, other things also come to mind: rampant and persistent corruption, extreme political instability, and, above all, the fact that Argentina is the twentieth century’s textbook-case of largely self-inflicted economic decline. Consider that as late as 1940, Argentina was the economic equal of Australia and Canada. Since then it’s been generally downhill.
During a recent trip to Argentina, however, I was immediately struck by the optimism that marked Argentines themselves. This contrasted with the widespread gloom visibly characterizing the country that I’d noticed on previous visits. One reason for the difference is that Argentina elected a non-Perónist to the presidency in November 2015, thus terminating 13 years of rule by the late Néstor Kirchner and his wife Cristina. They belonged to the wave of Latin American leftist-populists who came to power from the late-1990s onwards and who brought political and economic disarray in their wake.
Since assuming office, Argentina’s new President, Mauricio Macri, has sought to take the country in very different directions. He ended Argentina’s backing of the Chávista regime that has all but destroyed Venezuela. Macri is also exposing deep-seated corruption, the most notorious case thus far being a former Kirchner government official caught hiding several million US dollars in a convent. This has been accompanied by an effort to detoxify public discourse of the demagogic rhetoric that’s long plagued Argentine politics. Economically, Macri has started, albeit cautiously, moving Argentina away from its closed, highly-statist economic arrangements. This has included abolishing currency and capital controls as well as eliminating some price-controls, particular export taxes, and specific subsidies.
Thus far, opinion polls suggest that a slim but wavering majority of Argentines support Macri’s reforms. As one Jesuit remarked to me, many Argentines view Macri as the nation’s last chance to reverse the trend towards permanent decline. Judging, however, from the anti-Macri posters and demonstrations throughout Buenos Aires, plenty of Argentines oppose the reforms. Perónist politicians, long accustomed to using public office to dispense favors to supporters, aren’t going quietly. Likewise, Argentina’s powerful trade unions have said they’ll resist changes to the country’s heavily-regulated labor markets which, like all such markets, effectively discourage businesses from hiring people.
Another question occupying many Argentines’ minds is the stance of another important institution in the country’s life. Is the Catholic Church going to help smooth the path away from populism? Or will it, in the name of defending the poor, encourage resistance to reform? In all such discussions, Pope Francis’s words and actions feature prominently.
Still a Catholic country
Numerically and culturally, Argentina remains a Catholic nation. Even in a city like Buenos Aires where the practicing-rate among Catholics is approximately 20 percent, signs of popular religiosity are everywhere. It’s hard not to notice the number of people wearing crosses and religious medals, or the taxi-drivers who prominently display rosaries in their vehicles. Catholicism’s presence is also very visible in the educational field, whether through its extensive network of schools or first-class universities such as the Universidad Católica Argentina or Universidad Austral.
Most Argentine politicians, believing or otherwise, pay attention to public statements by the nation’s Catholic bishops. But the fact that the pope is Argentine has undoubtedly increased the Church’s influence. It wasn’t for idle reasons that Cristina Kirchner undertook a U-turn in her hitherto-hostile relationship with the Church after March 2013, or that Macri visited the Vatican in February this year.
On the basis of talking with many Argentine Catholics—clergy, academics, journalists, lay people—and reading homilies and articles in Catholic publications such as the quality periodical Criterio, it’s clear that some of them believe their present responsibility is to repeat whatever the pope says about political and economic subjects. In a way, this isn’t surprising. A similar phenomena marked Poland during John Paul II’s long pontificate. It does, however, create several challenges for the Church in Argentina if it wants to help the nation transition to becoming, as an Argentine theologian forcibly stated to me several times, “a normal country.”
Bread and work
From the beginning, Francis has made poverty a central concern of his pontificate. It’s also an omnipresent reality in Argentina. According to a report issued on August 11 by the Universidad Católica Argentina’s Social Observatory, Argentines living in poverty increased from 29 percent to 32.5 percent of the population in the first quarter of 2016. What constitutes economic poverty and adequate measures of poverty are constantly debated. What’s not debatable is the squalor, poor sanitation, drug-abuse, and violence marking the villas miseria found in and around major cities such as Buenos Aires, Mendoza, and Córdoba.
It’s also evident that the manner in which the pope speaks about poverty is shaping many Argentine Catholics’ approach to this subject. In an August 1 letter to Argentina’s bishops, for instance, Francis spoke of people’s need for bread and work. People must be able to feed their families, he noted. But they also want to earn their bread through work, Francis stressed, instead of receiving handouts.
On one level, this is hardly controversial. In fact, Francis’s emphasis on earning one’s bread should be praised. Not so uncontroversial was the fact that, following widespread attention being given to the pope’s words on the following Sunday inside and outside churches throughout Argentina, large protest marches against Macri’s economic reforms occurred. It’s as if some Argentine Catholics simply won’t accept that a healthy economic future for Argentina requires a winding back of state interventionism. And, correctly or incorrectly, they believe Francis agrees with them.
When it comes to “bread,” for instance, much of Argentina’s economy has been marked by price-controls imposed by the Kirchners. That includes staple food-items like milk, bread and meat, as well as goods such as cleaning products. But imposing price-controls on such goods means that the prices for many consumer products in Argentina haven’t reflected the real state of the supply and demand for these goods for some time. Producers consequently don’t know consumers’ real preferences. Nor can consumers signal to producers what they actually want, how much, and at what quality-level through the price-system. That’s a recipe for economic chaos.
Fixing this situation requires abolishing price-controls, for only free prices will allow the true state of supply and demand to manifest itself. In February, Macri removed controls on price-labelling on food. The subsequent adjustment means, however, that some food prices will increase—perhaps beyond some people’s capacity to pay—in the short and medium-term. Macri himself estimates that the process of price-stabilization could take as long as two years.
It’s not a question of the government somehow intending harm to poorer people. Rather, the point is that the economy’s ability to serve the common good requires free prices. The alternative is to leave untangled the web of controls bequeathed by the Kirchners and accept a severely dysfunctional price-system as a permanent feature of life. And that isn’t an alternative—unless you actually want to become the next Venezuela.
Or, take Pope Francis’s other point: that people want to work. Christianity has long extolled work’s importance, and not just for economic reasons. A major problem with Argentina’s economy, however, is the sheer number of people who work for the state. The government employs approximately 25 percent of Argentina’s working population. In some provinces, the proportion reaches over 40 percent.
Starting with Juan Péron in the mid-1940s, Argentine governments have created government jobs to reduce unemployment rather than pursuing the more difficult, often unpopular task of maintaining flexible labor markets. Macri insists, however, that Argentina must move beyond “an era in which we hid unemployment with public-sector jobs.” This means ending what an Argentine priest described to me as “fake jobs” or what one Catholic economist denoted as “Potemkin employment programs,” and allowing the private sector to generate real opportunity.
Again, however, this transition means hardship for some people, especially those government-employees who have already or may lose their jobs. It’s not that Macri callously wants to thrust people into unemployment. Instead his Administration accepts that using the state to create Potemkin jobs is fiscally-unsustainable and introduces deep dysfunctionality into labor markets. It’s a classic situation of short-term pain versus long-term gain.
Getting beyond the State
Argentina’s Catholic bishops had generally been careful not to comment on the precise policy details surrounding these challenges. This is, they recognize, primarily the responsibility of lay Catholics. But on August 13, the bishop who heads the Argentine episcopal conference’s Social Pastorate Commission publicly called for a “greater presence of the state” to combat unemployment, food-shortages, and poverty-increases.
Like other Argentines, Catholic leaders would have to be less-than human not to see the suffering of their country’s most vulnerable sectors. Some of the same Catholics, however, are reluctant to accept that it’s precisely the government’s excessive presence—whether in the form of price-controls or Potemkin job-programs—throughout much of Argentina’s economy which has helped cause these difficulties. At some point, this issue of government-overreach must be addressed if the country is to move towards normality.
During my week in Buenos Aires, I met many faithful Argentine Catholics who support Macri’s agenda. Most were on the younger side of the demographic equation. They aren’t sentimentally attached to Perónism. They also understand the damage inflicted by economic populism upon their country. That doesn’t mean they agree with everything Macri says and does. Some mentioned, for instance, that they wished he was doing more to open up the economy. Nor do they like his backing of same-sex marriage. Nevertheless they’re inclined to be more supportive of decidedly un-populist economic measures than, for instance, their parents. After all, it’s their future which is at stake.
Some of the same reform-minded Catholics, however, also mentioned that Pope Francis’s undisguised skepticism about economic liberalization and markets in general—which they describe as having become more rhetorically-charged and even radicalized since his election to Peter’s Chair—is helping fuel populist opposition to long-overdue changes.
They—and I—doubt this is the pope’s intention. Nevertheless, they point to speeches such as Francis’s remarks to the World Meeting of Popular Movements in Bolivia last year, delivered while sitting next to Bolivia’s arch-populist president Evo Morales. Such remarks, they claim, provide cover for Argentina’s own career-populists: people who, for all their talk about defending el pueblo, oppose any meaningful change to a status-quo that maintains their power but which has steadily eroded the Argentine economy’s ability to lift the poor out of their misery.
Pope Francis has stated on several occasions that he’s now “beyond [Argentina’s] internal affairs.” There’s no reason to disbelieve this. At the same time, words and speeches have consequences. Francis’s native land is running out of opportunities to stop the generally-downward spiral that’s afflicted Argentina’s economy since the 1940s. Defending the poor and helpless is certainly one of the Church’s responsibilities. But so too is trying to ensure that reason and wisdom rather than populist rhetoric characterize public debate—especially when doing the right thing may be unpopular but necessary for the common good.