What am I missing?

Protesters in Buenos Aires during a cacerolazo against Cristina Kirchner's goverment in 2012. (La Nación)

Protesters in Buenos Aires during a cacerolazo against Cristina Kirchner’s goverment in 2012. (La Nación)

Reading this piece about the authoritarian leanings of a subset of the kirchnerista movement (followers of late former president Néstor Kirchner and his wife and current president Cristina Fernández de Kirchner) in Argentina* sparked a recurring question l have about these types of governments’ intellectual supporters; what are they seeing that I’m not? Specifically, how does someone from the left look at Argentina or Venezuela and see it as a desirable model, especially compared to Uruguay, Chile or even Brazil?

For instance, when I look at Venezuela, I see a country with a decimated productive capacity, 20% inflation, rampant crime, and a complete disregard for the rule of law (not least, the constitution that the current government’s supporters drafted just 14 years ago) that is borrowing huge sums of money at rates above 15% in spite of the trillion dollar oil boom over the last decade that has buoyed the economy. I don’t see anything that would be much of a model for anyone, much less Europe, and yet there are very intelligent people who do see something valuable and worthy of replication, perhaps even in Europe. The situation is similar in Argentina, except without the oil and not as advanced in its interfering in the economy or circumventing the rule of law, though the government is moving quickly on both fronts.

On the other hand, one can look at countries like Chile between 1990 and 2009 and Uruguay over the last decade and see examples of governments that are clearly left-of-center, but pragmatic in their economic policies. Chile in particular, has had consistent, strong economic growth over the last two decades even while other countries in the region suffered dramatic crises that erased entire half decades of growth. Moreover, the poverty rate has fallen and stayed down, all while maintaining a robust (though still not ideal) democratic system that remains in the process of reforming itself. Uruguay presents a similar case. It possesses Latin America’s oldest and in many ways, most robust, welfare state, and the current president was a left-wing guerrilla fighter during the 1960s and 1970s. Yet he has governed economically in a manner similar to the Socialists in Chile (i.e. broadly in a neoliberal fashion) and recently described the indefinite reelection so popular among Latin American presidents of the left and right (including among chavistas and kirchneristas) as being “monarchic.” None of this is to say that these countries don’t have their problems but they do illustrate that it is possible to achieve economic growth and work toward a more equitable society within a democratic framework and without intervening dramatically into the economy.

So what do they prefer about the more heavy-handed approaches? Typically, the main argument in favor of a more chavista or kirchnerista model–whether the person making it endorses or merely tolerates their undemocratic tendencies–is that they can achieve similar levels of growth without the pernicious effects of capitalism on inequality. However, as a paper by Birdall, Lustig and McLeod entitled, Declining Inequality in Latn America: Some Economics, Some Politics demonstrates, it’s the Social Democratic model epitomized by Chile and Uruguay that has done a better job of reducing inequality and increasing social spending over the last decade. And it’s not clear at all that, even in the short run, these alternative models are better for growth, notwithstanding the likely scenario (at least from my view) that the arbitrary meddling with the economy will stunt future growth as investment disappears and the productive capacity stagnates or declines.

So I return to my initial question, what makes these models more attractive to a certain class of intellectuals? What is it that they see that don’t? Is it a situation more along the lines of what Scott Sumner outlines here where these people are projecting how they would prefer the world to be rather than reacting to the world as it is (or vice versa for me)?

* For the record, I find this argument a bit overwrought. I could be wrong, since I have very little contact with any kirchneristas, but I tend to believe that most people choose to see undemocratic actions by the president as a necessary evil rather than a feature of the model.

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