There is a prominent Socialist Party of Argentina, and the Argentine economy is often criticized for its socialist policies. However, Argentina does not meet the criteria of a full-blown socialist country. Massive inflation problems and sovereign defaults in Argentina during the 1980s and in 2000 to 2001 have caused populist economic sentiment among many Argentinean voters.

After yet another sovereign debt default and restructuring in 2013 and 2014, many were quick to blame the socialist policies implemented by the Argentine government, but there were many other factors, such as political corruption and an irresponsible monetary policy, that were culpable and not necessarily part of a socialist platform.

Key Takeaways

  • Socialism describes an economic and political system of centralized and shared production and ownership lacking free markets, often directed by a central government.
  • Argentina has seen socialist movements since the 1980s, along with other countries in South America, often in response to failed efforts at global integration.
  • Argentine bond failures in the 2000s and 2010s and again in May 2020, coupled with high inflation, have put a critical eye on some of the country's socialist policies.

The Rise of New Latin American Socialism

Argentina could be considered one of the more socialist countries in Central or South America. Other countries, notably Ecuador, Cuba, Bolivia, and Venezuela, have strong ties to socialist movements. Some of Argentina's neighbors are less socialist, and these include Chile, Uruguay, Colombia, and Saint Lucia.

The Latin American region has a long history of populist, socialist, and communist movements. For example, the political waves led by Salvador Allende in Chile, the National Liberation Army in Colombia, and Che Guevara and Fidel Castro in Cuba. By the fall of the Soviet Union in 1991, however, most of these movements had petered out.

This modern wave of Latin American socialism can be seen as a direct response to failed attempts at international development efforts by supranational organizations such as the International Monetary Fund, or IMF, in the 1980s and 1990s. During this period, many countries in the region leaned on foreign loans, printed large quantities of money, and focused on their respective balances of trade. These policies were subsequently blamed for poor economic performance and rising levels of inequality, according to the Gini index.

No country declined as rapidly or as severely as Argentina. In 1989 the average inflation rate in Argentina approached 5,000%, and in March 1990 it peaked at over 20,000%. The country defaulted on its loan obligations, and international investing dried up.

The Socialist Tendencies of Argentina

Many people confuse socialism with a strain of equitable egalitarianism, which advocates the belief that everyone should have equal outcomes. Many socialists might agree with this, but socialism is a public policy platform that argues for government control over the production and distribution of resources; it is not necessarily egalitarian.

If you consider socialism to be the absence of private economic freedom and subjugation of private property to the state, then Argentina is the most restrictive as it pertains to property rights and the least restrictive as it pertains to freedom of trade.

Some areas of Argentinian life are becoming more socialist. In response to new inflation problems , Argentina's President Cristina Fernández de Kirchner confiscated private pension plans to be added to the country's Social Security fund in 2008 and then applied more than 30 new restrictions on capital and monetary freedom from 2011 to 2014. These included high taxes on foreign product purchases, limits on purchases of foreign currencies, and restrictions on airline tickets to foreign destinations.

But many fundamental Argentinean problems, such as massive debt and irresponsible monetary policy, are not part of an official socialist agenda. Some argue that socialist policies lead to larger government deficits, but there are many indebted countries in the world that do not have strong socialist movements.

The Bottom Line

Few countries can be considered explicitly socialist. Even countries such as China and Sweden allow for private property, profitable business enterprises, and freedom of labor movement. There are many in Argentina who would like a more socialist country; a fact that highlights the concept that avowed socialists believe there is still work to be done.