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Paper prepared for delivery at Historical Materialism Conference. York University, Toronto.

March 13-16 2010 Panel: The Latin American pink tide. A post-neoliberal pattern of accumulation?

What do we talk about when we talk about the return of the state? The Argentinean state after the crisis of neoliberal reforms Ruth Felder Phd candidate. Dept of Political Science. York University (Canada), School of Social Sciences. University of Buenos Aires (Argentina). felder_ruth@yahoo.com.ar Draft. Please do not quote

Introduction The economic recovery occurred in Argentina in 2003 and the nature of the

political forces leading this recovery have raised questions about the nature of the post crisis scenario. Academic and political debates have understood the period as a part of a turn to the left in Latin America and have came to different conclusions about the continuity or change of the neoliberal pattern of accumulation and the neoliberal state form. This paper will highlight some theoretical and political problems possed by the post-crisis scenario and by its interpreations by analyzing the response of the sate to the crisis and the context in which it occurred. The analysis of the very diverse economic and political changes occurred after the crisis of neoliberal reforms goes beyond the limits of these pages. The paper will restrict itself to the restructuring of the defaulted public debt and the negotiations with the IMF. As the relationship between the Argentinean state, its

creditors and the IMF were central axes of the integration of the country within neoliberal globalization, the reformulation of this relationship sheds light on the nature of the postcrisis period. Far from giving a definite answer to the question about the end of neoliberalism, the paper will argue that the period defies easy categorizations. 2 Post-neoliberalism as the return of the state After three years of recession, the Argentinean economy collapsed in December 2001. This collapse transformed the best student of neoliberal reforms into a rogue state unable to put its fiscal house in order and to honour its financial commitments or into the best example of the failure of neoliberal reforms, depending on the observer. By then Argentina seemed unable to overcome an unprecedented economic, political and social dislocation that threatened the legitimacy of the state and the reproduction of large part of the population of the country. In less than two years this dire picture was transformed into an unexpected economic recovery. At the same time, the presidential election held in April 2003 seemed to put an end to the massive social hostility to the state, the political system and politicians. In this scenario, Nstor Kirchner assumed the presidency of the country rejecting pressures from domestic business and international actors to carry out adjustment policies and to suppress social mobilization. He criticized the subordination of the government to powerful economic interests during the 1990s and vindicated the intervention of the state, and the regional integration within the Mercosur (Kirchner 2003). During the Kirchner administration, the implementation of policies that challenged some basic tenets of the neoclassical economics helped to prop up the economic recovery and succeeded in reformulationg the financial global integration of the Argentinean state. These gestures and decisions backed the notion that Kirchner
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expressed the beginning of a post-neoliberal development strategy (Garca Delgado and Nocetto 2006).1 This stage is characterized by a revalorization of the state as an agent of development and as the instrument for collective action par excellence (Bresser Pereira 2007). The same idea of a return of the state has led defenders of neoliberal reforms to characterize the period in terms of a populist intrusion of the state in the legitimate terrain of the market (Artana 2006). Without neglecting the importance of understanding the changes in the division of labour between state and private economic agents occurred after 2003, here I will take distance from analyses that frame the recovery in terms of more state and less market and, based on the comeback of the state, celebrate or deplore the end of neoliberalism. To say that the comeback of the state marks the end of neoliberalism is based on the assumption that neoliberalism involves the absence of the state or, at least, a diminished presence of the state. This assumption is problematic for several reasons. First, a state that is able to retreat or return is external to society. It is either a subject that decides to participate or an instrument that can be manipulated by someone who controls it. The shortcomings of the the State as a Suject and the State as a Thing (Poulantzas 2000) are well known but seem to be forgotten in many accounts of the comeback of the state and of its capacity to lead processes of economic and social transformation beyond neoliberalism. Closely related to this, references to a greater or lesser presence of the state and attempts to quantify the adequate activity of the state

Kirchner also differentiated himself from his predecessors by pushing for a renewal of the Supreme Court that had been seriously discredited for its subordination to the Executive and arguing for the prosecution to the military and civilian responsible for human rights violations during the 1976-1983 dictatorship. The analysis of thes initiatives goes beyond the limits of this paper but should be mentioned because they have been important factors in the building of the center-left credentials of the government.

seem to overlap state and public administration2, neglecting the difference between the state as a relationship and the state apparatus as its specific material condensation (Poulantzas 2000). More importantly, it leaves aside the nature of the state in a capitalist society, its relation to the economy, to different classes and class fractions and, in the current historical context, to the dynamics and actors of globalization. Theoretical arguments that systematically link the state to the relation between capital and labour and shed light on the structural determinations that account for the capitalist nature of the state are useful to go beyond these narrow views of state institutions (Holloway and Picciotto 1978). But they fall short to recognize shifts that, without constituting radical challenges to capitalist social relations, produce alterations in in public policies and institutional arrangements and in the underlying balances of forces between classes and fractions and forms of global integration of domestic economies. When analyzing the crisis of neoliberal reforms, some observers from the left seem unable to recognize that a post-neoliberal period is not necessarily associated to a post-capitalist society or, to put it differently, that the historical patterns of capitalist accumulation may change without disarticulating the capitalist nature of society and unjust capitalist social relations. This is why characterizing the public policies that responded to the crisis of neoliberal reforms as a mere rethorical smokescreen to legitimize the continuity of neoliberalism (Born 2006) may be politically appealing but fails to recognize the actual characteristics of the historical stage of capitalism, the institutional arrangements and the balances of forces associated with it. Similarly, the true intentions of the government hidden behind some progressive gestures are not the most relevant pieces of information when analyzing the

And not the entire public administration, but mostly the agencies related to the protection of workers and the satisfaction of social rights.

nature of the economic and political period initiated in 2003. Indeed, in the absence of a revolutionary overthrown of capitalist social relations, the emergence of a post-neoliberal pattern of accumulation is expectedly a process of disarticulation and rearticulation, in which the balances of forces and the institutional configurations of neoliberalism may gradually and not without contradictions mutate into something different (not necessarily better for workers). This is an open ended process in which diverse circumstances may help to consolidate this mutation or may push for a return to the forms of fiscal and monetary discipline and of global integration associated with neoliberal reforms. Thus, a more fruitful line of analysis is the historically situated analysis of what the state has done after the crisis of neoliberal reforms. This view may help to shed light on the nature of the period that followed the crisis of neoliberal reforms if we keep in mind that what the state does (i.e. the institutional architecture of the state, its resources, tools, the criteria to assess the efficiency and effectiveness of state policies and the very definition of what the state should or should not do) results from and help to consolidate or modify historical balances of forces, specific forms of relation between capital and labour, forms of articulation of interests and priorities of dominant and dominated classes and relations between national territories and global capitalism. On the basis of these categories, it is possible to interpret the meaning of state policies and changing institutional configurations. Taking these premises into account, the analysis of what the state does is a way to reflect about the continuity or the transformation of neoliberalism. In the case of Argentina, the crisis of 2001 was followed by shifts from fiscal adjustment, strict monetary discipline and a deeper integration within financial

globalization to a competitive exchange rate, fiscal stimuli to domestic production and consumption and a partial delinking from global finance.3 These shifts were labelled as the return of the state. The challenges to some of these prescriptions are not negligible when contrasted with the discourse and policies of the previous decade. There are important differences between the discourse that prioritized the confidence of international markets and the discourse that stresses domestic production and social inclusion, and the active role of the state in guaranteeing them. Of course, discourses do not reverse the material effects of neoliberal reforms. The patterns of wealth distribution have not been significantly altered, public goods that were commodified have not been recovered, a good part of the institutional reconfiguration of the state imposed during the 1990s remain in place and many state policies have been guided by the goal of making the country attractive for investors by lowering costs and regulations. Nevertheless, in the same way that new forms of state regulation should not lead us to conclude that Argentina has left neoliberalism definitively behind, the presence of the structures built during the period of neoliberal reforms does not suffice to argue that the economic recovery and political recomposition initiated in 2003 did not produce any meaningful change. Static comparisons with prescriptive accounts of a desirable postneoliberal stage or with the the economic and social figures of the previous decade fall short to make sense of the complex and contradictory nature of the period. A subtler interpretation of economic policies, institutional arrangements and political realignments should pay attention to the context in which occurred, including the balances of forces, the structural conditions and the global scenario. A reconstruction of the historical trajectory of the

This delinking has not been a policy goal but resulted from the lack of access to international financial markets after the default on the public debt.

economic recovery occurred in Argentina after 2003 and, as a part of this, of the state policies that responded to the crisis and succeeded in re-establishing conditions for capital accumulation and the legitimacy of the political system is useful to identify the factors that helped to shape the outcomes, recognize changes and continuities in regards with the action of the state and interpret the content of this action. In the following pages, I will argue that policies that responded to the crisis of neoliberal reforms did not result from a comprehensive plan to leave neoliberalism behind but from a combination of pragmatic responses to specific economic problems, struggles between different actors affected by the crisis, the political impossibility to impose adjustment policies, the ideological crisis of neoliberalism and the progressive leanings of the new government. The historical analysis of these policies shows the existence of conflicts and ambiguities between acceptance and rejection of the neoliberal prescriptions. 3 Neoliberal reforms and crisis: From bad to worse The structural reforms imposed during the 1990s under the leadership of the president Carlos Menem were presented by their defenders as the solution to the cycles of high inflation and stagnation that had affected the Argentinean economy during the previous years and as the foundation of a stage of sustainable market-oriented development. Initially, reforms succeeded in controlling inflation and stimulating growth. But the combination of a gradual overvaluation of the currency, fiscal restrictions and liberalization became economically fragile and politically conflictive. Politically intolerable fiscal cuts and unprecedented levels of unemployment and poverty compounded with doubts about the capacity of the state to service a growing public debt
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and a run against the domestic banking system ended in the violent repression of social protest, the resignation of the president Fernando de la Ra in December 2001, the appointment of the Senator Adolfo Rodrguez Sa as the provisional president. Rodrguez Sas period lasted one week in which he announced the default on part of the public debt. Rodrguez Sa was replaced by Senator Eduardo Duhalde who announced the abandonment of the currency board that had organized the economy during the previous decade. While the default aggravated the hostility of the IMF, the US and some European governments and creditors towards the country, the devaluation produced a drastic alteration of relative prices that benefited exports and import substitution and hit wage earners. The first weeks of 2002 witnessed numerous clashes and demands on the state about the allocation of the costs of the crisis, an abrupt fall of the level of economic activity, growing unemployment and impoverishment and the prospect of a bankruptcy of the state in a context of a crisis of legitimacy of neoliberal reforms, social protests and repression. The governmental response to the crisis combined abstract criticisms to neoliberalism with efforts to control the distributive conflicts associated with the devaluation and to meet the requirements of the IMF. Based on a close alliance with large domestic capitalists and unable to impose discipline on mobilized popular groups, the government failed to organize a coherent response to the crisis and restricted itself to meet very diverse demands of subsidies and compensations.4

The most conspicuous example of this was the so-called pesification of debts. Debts nominated in dollars were converted into pesos at a subsidized exchange rate. Domestic firms with large dollar denominated debts saw their financial commitments drastically reduced. The state compensated banks for the gap between the subsidized exchange rate and the real exchange rate.

The president and the economic authorities also made efforts to obtain IMFs assistance. These efforts transformed Argentina into a test case of a new IMFs strategy to impose fiscal adjustment, liberalization and structural reforms as a condition to release its funds. In early 2002, when negotiations between the Argentinean government and the IMF started, the latter demanded a sustainable program. The actual content of this sustainable program was not clearly defined but gradually included more ambitious goals, whose purposes were to orient the costs of the devaluation away from international banks and creditors, prevent a return to protectionist policies, and discipline a government that was seen as populist and weak to impose adjustment on local governments and on increasingly organized and militant unemployed workers and other popular actors. This way, the IMF situated itself in a privileged position to orient and veto economic policies without releasing any money. A central axis of the negotiations between the government and the IMF was the exchange regime that would replace the currency board. Immediately after the devaluation, the government implemented a regulated exchange rate regime. The regulation was aimed at preventing an uncontrolled devaluation of the peso that would trigger inflation and worsen the uncertainty about the prospects of the Argentinean economy. But the IMF conditioned its assistance to the implementation of a floating exchange rate regime. As soon as the government let the peso float, an abrupt devaluation occurred and inflation accelerated. This in turn reduced the purchasing power of wages and aggravated the existing recession. Social conflict intensified and so did the demands of order and repression of protests on the part of conservative political and economic actors (including several government officials).

In this context of economic and political instability, policies were announced that failed to be implemented or were radically modified due to disagreements between government officials, and between the Executive and members of Congress from the ruling party, and the rejection of some of the affected actors. In April 2002, as macroeconomic instability worsened and presssures on the state grew, the Economy Minister Jorge Remes Lenicov resigned. Remes Lenicov was replaced by Roberto Lavagna, whose appointment was the starting point of an economic recovery based on a certain degree of state autonomy regarding the immediate and contradictory demands of domestic and international capitalist fractions, governments and international institutions. Without posing any substantive challenge to these actors, the economic authorities attempted to recover the authority of the state to impose regulations and carry out policies that recreated the conditions for capital accumulation. These reorientations would be accompanied by a political normalization based on the decline of social mobilization and on a repressive response to popular demands. 4 The unexpected recovery The new minister and his team recognized the need to obtain IMFs assistance but their strategy to revert the crisis departed from the neoliberal recipes for adjustment. This strategy succeeded in controlling the devaluation of the peso by intervening in the exchange market and imposing regulations on capital movements. The combination of stabilization and a more competitive exchange rate created the conditions for an economic recovery based on exports and import substitution. The economic authorities also refused to implement some of the IMFs conditionalities that would predictably generate social hostility and worsen the political crisis, while pushing for the
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implementation of some legal reforms demanded by the institution.5 These legal changes raised broad social and political controversies but did not help to obtain IMFs support. The Fund demanded further fiscal discipline, the immediate restructuring of the defaulted debt, compensations to banks affected by the devaluation and the elimination of capital controls. Without IMFs assistance, Argentina was unable to refinance its debt with the World Bank and the IADB. Then, refusing to use the reserves of the Central Bank to meet the financial commitments of the country, the government decided to default on part of the debt with the World Bank in November 2002 and announced that it would also default on the debt with the IADB and the IMF. As the country already lacked access to international financial markets, the default did not have any immediate economic consequence. But the default was a pragmatic tool to achieve an agreement rather than a clear challenge to the IFIs. In January 2003, Argentina signed a short-term agreement with the IMF to refinance its short-term debt with these institutions. In exchange for the financial assistance to rollover the debt, the Argentinean government committed to reduce public spending, to compensate banks for the costs of the devaluation, to rise the prices of public utilities, to grant immunity to the Board of Directors of the Central Bank and to rationalize state-owned banks (Lavagna and Prat Gay 2003). The economic recovery was a central factor of the political normalization but this normalization had its own dynamics marked by social mobilization and demands of repression of social indiscipline on the part of memberes of the government and

Lavagna and his team refused to pass a bill that granted the immunity of Directors of the Central Bank and to impose a compulsory exchange of banking savings by bonds. Conversely, they pushed for the amendment of the the so-called bankruptcy law that protected firms with outstanding debts from being taken over by their creditors and the economic subversion law that was being used to judge financiers accused of fraud.

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conservative political sectors. In this regard, the assassination of two members of the Movimiento de Trabajadores Desocupados Anbal Vern (Movement of Unemployed Workers Anbal Vern) in the context of police repression of a protest in June 2002 was a political turning point. Hit by the political scandal produced by these killings and without an agreement with the IMF, Eduardo Duhalde called an anticipated presidential election for May 2003.6 The announcement of the presidential election made visible the crisis of the main political parties that lacked candidates capable to address the crisis, unify their own political force and gain support. When several peronist leaders refused to run for president, the governor of the southern province of Santa Cruz, Nstor Kirchner became the candidate fielded by the party in power. In his electoral campaign, he argued for an active intervention of the state in the economy. Among his competitors, the dissident Peronist candidate and former president Carlos Menem argued for the elimination of the obstacles to the integration of the country within the global economy for and a return to the stabilization policies of the 1990s. Even though Menem obtained the largest number of votes in the first electoral round, the hostility of the majority of voters would expose him to a foretold electoral defeat in a second round. Thus, he resigned and Nstor Kirchner became the president of the country with only 22% of the votes. 5 A turn to the left? When Kirchner was elected, demands of further fiscal adjustment, structural reforms and social discpline became more intense. Kirchner rejected these pressures and

Duhalde had been appointed as a provisional president in December 2002 to complete De la Ras presidential period that ended in December 2003.

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argued for an active intervention of the state in the economy (Kirchner 2003). The elected president also criticized the FTAA and blamed neoliberalism and the actors benefited by neoliberal reforms for the crisis. He argued for alliances with other Latin American countries and announced that his government would not crush social protests. These announcements and initial gestures backed the notion that Argentina was undergoing a turn to the left. The renegotiation of the defaulted debt in 2004 and the cancellation of the IMFs assistance program in 2005 helped to reinforce this notion. But Kirchners initial positions can also be interpreted as a product of the constraints and opportunities created by the crisis. In other words, they expressed a recognition that the orthodox economic policies would be economically ineffective to contain the crisis and politically unfeasible, while social mobilization and the crisis of legitimacy of neoliberal reforms created favourable conditions for policies that departed from the neoliberal formulas. Some policies that responded to the consequences of the crisis would gradually increase the room for implementing heterodox economic policies, which backed the notion that they inaugurated a post-neoliberal stage. But these changes were accompanied by paths of continuity that have been articulated in a conflictive and contradictory fashion. Since then, the relation between the Argentinean government, the international financial institutions, the governments of core countries and the domestic capitalist fractions benefited by the previous neoliberal reforms has been marked by many tensions, by very few breakups and by successive negotiations, pressures and concessions. This contradictory combination has been politically conflictive and unstable. As soon as Kirchner assumed, his government had to resume negotiations with the IMF to renew its assistance program. Kirchner announced his intention to reach an

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agreement with the IMF compatible with economic growth and the reduction of poverty. The Economy Minister Roberto Lavagna rejected the IMFs pressure to increase the fiscal surplus. He also refused to use the foreign reserves of the Central Bank to pay the public debt without a previous reduction of the total amount of the debt and of its interests. But Lavagna also insisted on the need to pass the laws and to implement the policies required by the IMF to sign an agreement with Argentina. The economic team also prioritized fiscal discipline. But the unyielding position of the IMF and the refusal of the government to put the stabilization and incipient economic recovery at risk by eliminating regulations and imposing adjustment policies led negotiations to a dead end. In this scenario Nstor Kirchner intensified his criticism to neoliberalism, blamed the IMF for the crisis and rejected its conditionalities. In September 2003, he announced his decision to postpone a payment to the IMF. After the annoucement, an agreement between the Argentinean government and the IMF was signed that included the commitment to restructure the public debt and to maintain fiscal surpluses, among many other conditions (IMF 2003; Ministerio de Economa 2003). But the agreement did not put an end to the tensions. The IMF used the reviews of the agreement as opportunities to insist on its usual demands of fiscal discipline and structural reforms. By mid-2003, the government started negotiations with private creditors of the defaulted debt. Its formal proposal for the restructuring of the debt released in September 2003 included a 75% haircut of the total amount of the defaulted debt. The rationale of this restructuring was to make debt servicing compatible with the predicted evolution of the economy (Lavagna, 2003). A reformulation of the proposal was released in 2004 that involved a substantial improvement in the offer to creditors. To soothe creditors negative

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reaction, the Economy Minister announced structural reforms aligned with some of the requirements of the IMF.7 Around 75% of the creditors accepted the restructuring. While the Argentinean government was negotiating with the holders of the defaulted debt, the IMF argued that the default would remain in effect unless a large majority of creditors accepted the restructuring. When the restructuring was completed, it refused to recognize the end of the default. It also pushed for the deepening of fiscal adjustment and structural reforms and demanded the cancelation of the principal of its own credit. In August 2004, the IMFs Director Rodrigo de Rato announced that the institution would cancel its assistance program because Argentina had not made any progress with regards to structural reforms. The Argentinean authorities reacted criticizing the IMF and temporarily interrupting the negotiations with the institution. However, they used the reserves of the Central Bank to service the debt with the IFIs, expecting that this gesture would help to gain their support in the negotiation with private creditors. After the failure of the successive attempts to resume negotiations with the IMF without accepting the conditionalities that hindered the economic recovery and the stabilization, in late 2004, Kirchner announced that Argentina would fully repay its debt with the institution. A payment was made in early 2005 that put an end to the IMFs assistance program and gave the Argentinean government a considerable degree of freedom to implement macroeconomic policies and regulations that would be unfeasible

A tax reform, a restructuring of the federal share, the implementation of a scheme of inflation targets, compensations to banks affected by the crisis, a renegotiation of the contracts ruling the operation of privatized public utilities and other measures aimed at improving the business climate (Lavagna 2003). The minister refused to raise the fiscal surplus goals, to liberalize the exchange rate and to reduce taxes on exports as demanded by the IMF (Pgina 12, August 6, 2004).

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in the context of an IMFs program. IMFs pressures have not ended with the cancellation of the debt but they lost political effectiveness. The government ignored its recommendations to control public spending and to carry out deflationary policies. During the years of sustained growth, it also rejected pressures to negotiate with the bondholders that had not accepted the restructuring of the debt. 6 A reality check The combination of some heterodox policies, a new economic and political scenario and a positive international scenario gave room for a vigorous economic recovery. A competitive exchange rate and the rise of the international prices of agriculture products favoured Argentinean exports. The devaluation also gave room for a process of import substitution. Later, the recovery fuelled the growth of imports. On the other hand, the drop of international interest rates resulted in lower domestic interest rates, which stimulated productive investment (CENDA, 2008). Also, the productivity of labour and profits experienced a meaningful growth. Employment and wages followed a less linear path. Immediately after the devaluation, a crucial alteration of relative prices occurred that had a strong negative impact on wages (Costa, Kicillof and Nahn, 2004). Then, employment grew and wages improved for different groups of workers. Retirement pensions were adjusted and pensions were given to a large number of people that had been previously excluded. Wage earners did not completely recover the purchasing power lost during the 1990s and the early 2000s. However, wage rises and the fall of unemployment reduced the high levels of poverty and indigence of 2001 and 2002. These trends in turn helped to legitimize a discourse of growth with social inclusion.
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Public spending grew and the burden of debt servicing fell. But growing spending has not been accompanied by strategic redefinitions about the role of the state in a postneoliberal pattern of development. The action of the state has been based on a rejection to the deepening of fiscal and monetary discipline and on the good macroeconomic performance, rather than on the building of strategies, institutional and organizational agreements and instruments that replaced those imposed in the 1990s. Many institutional arrangements, managerial styles and instruments consolidated by the neoliberal restructuring of the state apparatus remain intact. The reversal of fiscal hardship has resulted in the development of ad hoc mechanisms of allocation of funds to respond to crises (v.g. compensations to diverse groups affected by the devaluation, subsidies to prevent price increases and to alleviate the consequences of the lack of investments in infrastructure, increases in the coverage and amount of retirement pensions, etc.). To make sense of these economic and institutional dimensions of the recovery the political scenario in which they occurred should be taken into account. After the peak of social conflict of 2001 and 2002, social mobilization declined, and the contradictions between, and within, different social movements and organizations grew. While the organizations of bank customers and neighbourhood assemblies gradually faded away the movements of unemployed workers that had had a crucial role during the crisis were weakened by divisions about the characterization of the new government, the fall of unemployment and the cut of unemployment relief payments. The rise of employment was accompanied by a rise in labour conflict under the lead of local unions, usually opposed to the leadership of their unions and federations. These conflicts have been virulent but had limited consequences beyond the companies or sections in which they

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erupted. On the other hand, the economic recovery and the recomposition of political authority gradually reversed Kirchners untrustworthiness among economic actors. This reversal has undoubtedly to do with the economic performance of the country, but it is also explained by the fact that the anti-neoliberal discourse coexisted with a rigorous fiscal discipline; criticisms to the privileges granted to the suppliers of privatized public utilities and financial actors during the 1990s has been accompanied by policies aimed at recomposing the relation with these actors and the statements about social inclusion have not altered the general patterns of distribution of wealth (Gerchunoff and Aguirre 2004). But the dynamics of growth and the accelerated rise of the international prices of agriculture products that constitute a large part of Argentinean exports resulted in strong inflationary pressures that affected workers purchasing power.8 Price increases led the economic authorities to implement different forms of price regulation of massive consumption goods that had only short-lasting effects. Since 2007, official data about inflation have become unreliable, which in turn has helped to fuel price indexation and wage demands. In 2008, the government attempted to delink the domestic prices from the international prices of agriculture products by increasing the tax on exports but the reaction of landowners blocked its implementation. It also united different fractions of dominant classes that have been increasingly active to protect their existing privileges, strengthen social discipline and set limits for the action of the state with the support of the main opposition parties.

Some of them are wage goods (weath and corn) while the production and export of soybeans and oil that have growth exponentially in the last decade are not consumed domestically but compete with them for the use of land.

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The ongoing international financial crisis has not directly affect Argentinas financial balance because the country lacks access to international financial markets. However, in 2009 exports fell, the growth of the GDP de-accelerated, and unemployment grew. State revenues fell while spending grew due to the implementation of several anticyclical policies. This new scenario led the government to initiate negotiations with bondholders of the defaulted debt that had not accepted the restructuring in 2005, with the purpose of regaining access to international financial markets. A defeat in the 2009 mid-term election led the government to lose its Congressional majority and opened a new political period in which an increasingly organized political and social opposition has pushed for limiting what came to be seen as irresponsible fiscal policies and the arbitrary use of public resources.9 7 The end of neoliberalism? The question about the end of neoliberalism is not an easy one. Accepting the common sense notion that neoliberal reforms are a retreat of the state, the post-crisis scenario is a post-neoliberal scenario. However, as I said before, the activity of the state cannot be defined in terms of its presence or absence. Rather than a retreat of the state, the process of neoliberal reforms involved a redefinition of its functions and a reconfiguration of its institutional apparatus. While some activities were transferred to private actors (i.e. supply of public utilities), the state kept in charge of others whose supply deteriorated considerably (i.e. education, health care, etc.), took over new tasks (deregulation of labour relations, building a safety net for banks and financial investors)

Examples of this have been the implementation of a citizen income for families with children, the abolition of the independence of the Central Bank, the use of the foreign reserves to service the public debt and the refusal to go back to fiscal adjustment policies.

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and prioritized existing ones (negotiation of the public debt, repression of social demands, etc.). Underlying these changes there was a transformation of the social relation expressed in the the materiality of the state apparatus and the building of the neoliberal accumulation pattern. The crisis of neoliberal reforms, the post-crisis the political scenario and the political inclination of the government do not produce an automatic reversal of the economic, institutional and social transformations produced during the period of reforms. Not only are state policies unable to correct the negative effects of these reforms but the state itself is shaped by these transformations.10 An epochal change depends on the disarticulation of the balances of forces and the institutional arrangements built during the stage of neoliberal reforms.11 These conditions do not mean that change cannot occur. Left and center left governments may have diverse degree of autonomy vis--vis different social groups and modify the forms in which legitimacy issues are addressed. Their priorities may introduce tensions in the power bloc that will eventually help to produce reorganizations within it. But the political will itself does not produce an immediate and coherent transformation of the state, nor an alteration of the structural transformations produced by neoliberal reforms. This means the recent changes in Argentin (and arguably in Latin America) should be analyzed in the historical context of the structural reforms that preceded them. There is an additional difficult to think about the end of neoliberalism. The

The idea of a state that corrects the negative effects of capitalist social relations is related to the notion of a subject state that I criticized above. 11 I am borrowing from Osorio (2007) who differentiates between neoliberal economic policies and the neoliberal pattern of capitalist accumulation that these policies helped to build in the context of the global restructuring of capitalistm. From this point of view, a reorientation of economic policies is not immediately translated into a structural transformation of the relation between capital and labour.

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balances of forces, the patterns of wealth distribution, the institutional arrangements and political forms of a post-neoliberal pattern of accumulation will predictably be built on the basis the economic, political, institutional and social conditions of neoliberalism.12 This in turn will be expressed in important contradictions and incongruences in public policies. The implementation of neoliberal reforms (gradually and not without conflicts) set the conditions for a coherent pattern of accumulation and integration within the global economy, and simultaneously imposed idiosyncratic forms of discipline of the state and diverse social groups within the country. This pattern was closely linked to the neoliberal ideological premises and policy blueprint and predictably, it strengthened the power of capital over labour and restricted the ability of non capitalist groups to put demands on the state. Conversely, the response to the crisis of reforms was based on a piecemeal approach in which the challenges to some of the neoliberal truisms were combined with gestures to attract capital and to regain the confidence of international economic actors, and with the acceptance of the irreversible nature of many of the previous structural changes. Underlying these qualitatively different degrees of coherence there are significantly different balances of forces. While a major feature of the decade of the 1990s was the capacity of the state to impose discipline on workers and on disparate capitalist interests, the crisis of the early 2000s and the subsequent recovery have expressed the disarticulation of this capacity and the re-emergence and gradual intensification of inter-class and intra-class tensions. The presence of forces that push for changes (in diverse directions) and of forces that push for maintaining the status quo transforms the ongoing responses to the crisis of neoliberal reforms into an open-ended

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Unless a revolutionary transformation of capitalist social relations occurs.

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process whose results cannot be predicted but depend on balances of forces in a global scenario of crisis whose outcomes are not predictable either. The political crisis that put an end to the deepening of fiscal adjustment and deflationary policies in Argentina occurred in the context of the coming to power of progressive, center left and left governments in several South American countries and of regional alliances different from the projects of continental and global integration that had prevailed during the 1990s. These political alliances emerged in an international scenario marked by the ample availability of liquidity and high market prices for the commodities exported by Latin American countries. The question is whether this will be a sustainable trend that could eventually put an end to the structural changes and the effects of neoliberalism or the spread of the current crisis will push Argentina and other countries of the region to a new wave of disciplinary adjustments in order to attract capital flows and get financial assistance. Thus, the arguments about the future of progressive, left and center left Latin American governments should be based on a careful analysis of the evolution of the current global crisis combined with domestic balances of forces more or less favourable to a new stage of subordination to the disciplinary rules of a changing global economy.

Bibliographical references

Artana, Daniel (2006) "Populismo y polticas de estado". Indicadores de Coyuntura N 468, Buenos Aires Born, Atilio (2006) Argentina. Elas, Antonio (ed.) Los gobiernos progresistas en debate. Argentina, Brasil, Chile, Venezuela y Uruguay. Buenos Aires, Consejo Latinoamericano de Ciencias Sociales. Bresser Pereira, Luiz Carlos (2007) "Estado y mercado en el nuevo desarrollismo", Nueva Sociedad, N 210, julio-agosto, Caracas. CENDA (2008) La economa argentina en la encrucijada: de la poltica macroeconmica a la estrategia nacional de desarrollo?. Notas de la Economa Argentina, N 5Buenos Aires: Centro de Estudios para el Desarrollo Argentino.
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