The old Peronist smiled when I asked what would be the next big change in world politics. Speaking in immaculate English, he replied: “The decadence of market power.” Near the end of the Nineties, it was a strikingly prescient observation. Comfortably seated beneath a vast portrait of the dictator’s wife, Eva, the exquisitely tailored survivor from another political era anticipated the deliquescence of the post-Cold War global market, which opinion formers throughout the West believed to be everlasting.
A few years later, the control of economic policy by institutions insulated from politics – one of the pillars of neoliberalism in Argentina as everywhere – began to collapse. Pegging the peso to the American dollar by an independent currency board was acclaimed by economists as a constraint on inflation and a precondition of growth. When I visited Argentina, everyone – senior officials at the central bank, the current generation of politicians, even journalists – assured me the peg was inviolable. But an overvalued peso meant uncompetitive exports and a steep recession, whose consequences were evident in poverty and crime in the streets. The peg was becoming unsustainable, and I was not surprised when it broke down.
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