Argentina has a strong socialist party, and many people have criticized that country for its socialist policies. However, Argentina does not meet the criteria of a full-blown socialist country. Massive inflation problems and sovereign defaults during the 1980s and from 2000 to 2001 have caused populist economic sentiment among many Argentinean voters, but there is currently no move towards significant public ownership.

After yet another sovereign debt default and restructuring in 2013 and 2014, many were quick to blame the socialist policies implemented by the government in power at the time. However, 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 publicly-owned industry, 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 has a long tradition of protectionist and pro-worker politics, dating back to the presidency of Juan Peron. Other countries, notably Ecuador, Cuba, Bolivia, Peru, and Venezuela, have explicitly leftist governments. 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 fairly restrictive with respect to property rights, as measured by the International Property Rights Index.

Some areas of economic life have become more socialist. Following the election of the center-left Alberto Fernandez in 2019, the new president raised taxes on foreign currency purchases, agricultural exports, and car sales, while freezing utility rates and increasing subsidies for the poor. Fernandez also restructured the country's debt, which was at risk of imminent collapse.

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.