You Stay Classy, Argentina: Report Points to Expanding Middle Class

(This article and its content were first published on thebubble.com, August 4, 2015). 

http://www.thebubble.com/stay-classy-argentina/

The rise of the global bourgeoisie continues. In a recent study published by the US-based PEW Center for Research, it was revealed that among a renewed expansion of the “middle” stratum of humanity, the Argentine middle class had more than doubled over the last ten years, from around 15 percent in the immediate aftermath of the 2001 economic crisis to almost 32.5 percent a decade later in 2011.

This itself is an increase of 117 percent and shows a meteoric rise in the number of individuals lifted out of the complex and disadvantaged mass of those who find themselves below the middle class in the 21st-century capitalist world order. Argentina is now a regional leader in this regard — along with Uruguay and Chile, they are the only Latin American states that can boast having a majority of their citizens belong to the “middle income” group.

The report was accompanied by new numbers released by the International Monetary Fund (IMF) and World Bank pointing to a corresponding, remarkable reduction in poverty levels in Argentina in the years following the economic catastrophe of 2001, when poverty stood around 50 and 60% of the population, to now, where (depending on your choice of study and, apparently, voting intentions) it is between 20 and 40% lower.

Temples of disposable income—Shopping on Florida Avenue, Buenos Aires. Image: en.wikipedia.org

Is this a vindication of the economic road the Kirchner-led governments since 2003 have taken, placing and delivering poverty reduction at the forefront of their targets for the economy? Or is it simply capitalism’s benevolent tentacles of disposable income and consumerist luxuries reaching down into the quagmire of the unwashed masses and lifting more lucky winners out of the ooze?

We asked leading economics professor Augustín Salvia from the UCA, who told The Bubble that it was probably a bit of both. He said that an expanding global economy had helped raise income for consumers:

“THANKS TO A FAVORABLE INTERNATIONAL ENVIRONMENT FOR EXPORTS AND DOMESTIC MARKET GROWTH, LEAVING MORE CAPACITY FOR SOCIAL SPENDING BY THE STATE.”

Crucially, government policy over the last decade (i.e. Kirchnerite government policy) and such social spending, he continued, had helped dramatically reduce poverty from the 60% levels Néstor’s government inherited in 2003.

“OF COURSE, IT WAS ALSO DOWN TO PUBLIC POLICIES TAKEN. WHAT HAS HAPPENED OVER THE PAST DECADE UP TO 2011-2012 WAS AN EXTRAORDINARY SOCIO-ECONOMIC RECOVERY,” SALVIA SAID.

(N.B: It’s worth pointing out that Augustín Salvia, as part of the UCA economics faculty, has recently been very critical of the current government’s Panglossian approach to viewing poverty levels in the last two years, contributing to a report that refuted Cristina and Capitanich’s “5%” claims as outdated).

So it seems that fewer people in poverty since 2001 has helped a general shuffling along on the social scale. It has meant there are less people struggling to eat, work and generally support themselves with the paper IOUs we call money — virtually as precious to post-modern survival as bread, water or oxygen, and often exchanged for some of these things directly.

In a society with an expanding middle class, more money slowly becomes available outside of it being needed for basic necessities and little else. What happens next was documented over 100 years ago by H.G. Wells in his book satirizing the growing bourgeoisie during the turn of the Twentieth Century (1909) in Britain.

“WITH AN IMMENSE ZEST … THEY BEGIN SHOPPING. … THEY PLUNGE INTO IT AS ONE PLUNGES INTO A CAREER; AS A CLASS THEY TALK, THINK AND DREAM POSSESSIONS.”

The “pro-business” right may have screamed and still be screaming “next Venezuela” and “dictatorship” at the Victory Front (FpV) and their economic policies, but in truth the Kirchner era has, overall, helped capitalism and the system’s favored class, the bourgeoisie, expand and grow in Argentina since its spectacular collapse at the hands of a neoliberal model in 2001-2002.

Investing in the economy directly with government funds and lifting people out of poverty through expanded welfare programs has helped grow consumption, since more people now have more money to spend, as Salvia helped explain for us.

“Expanding coverage and retirement benefits, the income transfer programs such as Progress or Universal Child Allowance (AUH), higher minimum wages, constituted important countercyclical social policies to avoid increasing poverty and boost domestic consumption. This led not only to a fall in inequality, but social improvements. In this regard, 2011 was the best year of the decade.”

President Cristina Fernández de Kirchner announces the Universal Child Allowance (AUH), 2009. Image: ANSESGOB via flickr.com

The Krichner era has, in fact, been one of remarkable capitalist growth in a mixed economy of well-balanced public and private sectors — often a good recipe for regenerating an economy with sustained economic growth and middle-class expansion, as demonstrated in Western Europe after 1945. The Inter-American Development Bank (BID) confirmed as much recently:

“SINCE ITS 2002 ECONOMIC CRISIS, ARGENTINA HAS BEEN ONE OF THE COUNTRIES WITH THE BEST PERFORMANCE IN LATIN AMERICA AND THE CARIBBEAN IN THE REDUCTION OF POVERTY AND POSTING GAINS OF GROWING PROSPERITY, EXPANDING THE MIDDLE CLASS.”

NO ROOM FOR COMPLACENCY

Not everyone is convinced that the social situation is so rosy, however. Presumably in response to the recent and understandable triumphalism of the government when they read the Pew report and following praise from the the World Bank/IMF duo (heady praise indeed from institutions that have lambasted social spending in favor of privatization and austerity for decades), conservative broadsheet La Nación quickly published a repost in the form of a study conducted by a group of fringe think tanks that have challenged the good news.

While the bodies referenced in the report appear to be politically interested, explicitly pro-market organizations (the clue is in the names), we shouldn’t just dismiss the arguments used. They raise genuine social concerns about the last few years in particular and underline that it’s important not to get carried away and view Argentina as the universal bourgeois paradise it clearly is not.

Salvia agreed, telling The Bubble that there was little room for complacency when it comes to growing the middle class further, despite the stunning achievements over the last decade.

“On the other hand, if we make the comparison between 2011 and 2014, the trend reversed. Not catastrophically but again, increased homelessness and poverty have reduced the middle class. Hence, structural poverty remains between 15 and 20% in Argentina and in that area, improvements are very slow.”

So the current government, the latest link in the Kirchner chain born in the ashes of the 2001 crisis, should not rest on its laurels at the remarkable poverty reduction achieved since those dark days and confirmed by the Pew Research Center, World Bank, IMF, BID and so on.

Poverty may well be back on the rise. And yet the temptation for Kirchnerites is to celebrate the new figures (which only go up to 2011, remember) as a final triumph, especially in this, a crucial and finely poised election year. This is dangerous.

For the current administration — and whoever takes up the reins of power after December 10 — to legitimately claim the mantle as champions of social justice,  these returning and disgraceful problems of child poverty, homelessness, hunger and so on must be addressed rather than rest easy on the undeniably impressive achievements witnessed since 2003.

Villa 31, a barrio in the suburbs of Buenos Aires City. Image: en.wikipedia.org

The job is not yet done. Massive social inequality between classes and regions continues to exist alongside the comfortable wealth of those privileged who have made it into or remain part of the property-owning bourgeoisie, who can buy stuff they want, not only stuff they need. According to Salvia, this class might now be shrinking again, despite what we will hear on Cadena Nacional.

BEYOND NUMBERS

So what about this middle class itself? What about the actual subject of the PEW report that kickstarted this latest merry-go-round debate? Clearly, its growth in Argentina over the last ten years or so has been remarkable. All the numbers say so, after all.

But to what extent do these precise statistical measurements and abstract paint-by-the-numbers social research actually help us understand the human stories involved in social development?

Most of the studies can tell us a lot about the base economic status of people in society and their relation to other groups, how much they can spend on niceties and so on. But the number crunchers’ use of the social grouping and labelling system called “class” doesn´t do enough to tap into human experiences on its own. It’s cold, hard data that cannot help us understand completely what it’s like to live in a certain social group that might be different from our own.

Perhaps a different definition with a bit more nuance, used alongside the necessary data crunching, would help the human element in class-based studies emerge. That’s what  Ezequiel Adamovsky, a historian of the Argentine middle class, said recently anyway, refuting an economic definition.

Here’s another definition I read earlier.

In the preface to The Making of the English Working Class, one of the most influential history books ever written, EP Thompson (a cool guy as historians go — here he is at Glastonbury) looks at the problem head on and right away.

 “I DO NOT SEE CLASS AS A ‘STRUCTURE,’ NOR EVEN AS A ‘CATEGORY,’ BUT AS SOMETHING WHICH IN FACT HAPPENS (AND CAN BE SHOWN TO HAVE HAPPENED) IN HUMAN RELATIONSHIPS.”

So…

“Class happens when some men, as a result of common experiences (inherited or shared), feel and articulate the identity of their interests as between themselves…Class is defined by men as they live their own history, and, in the end, this is its only definition.”

It’s a process and a living, breathing thing. As much a verb as a passive noun or inert box on a spreadsheet. Studies like the latest reports from the Pew Center, IMF and so on are vital to show the hard evidence of social development and help us and the people in charge look at the broad scope of the economy and society, see where we’re heading and what issues we need to address

They can only ever give an incomplete picture of the situation though. When Salvia tells us that Argentina has a 15-20% structural poverty, what are the personal implications of that on people and their families? It’s difficult for these numerical studies agreeing and disagreeing with academics, economists, politicians and so on to cut through the esoteric clutter and actually tell us about the human experiences they ultimately try to describe.

That’s why we need to think carefully about what “class” actually means when wading into the political mud-slinging and statistical warfare the like of which we have seen from the pro and anti-government forces in Argentina recently.

The PEW Center report provided fascinating insights into the direction this country has traveled and the social advances achieved since the worst economic crisis in its recent history. Let’s not waste it by looking only at the numbers and forgetting the countless human stories that lie behind them.

 @lando_j
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