Can a rich and stable country decline, lose its wealth, and devour itself in spasms of bitter polarization? Americans hope not. We like to believe we’re on top to stay. But this month, an Independence Day will be celebrated not just here but in what is sometimes called the world’s only formerly developed country: Argentina. The story of its rise and fall is full of warnings for the United States.
Argentina is vast — the largest Spanish-speaking country in the world — and blessed with fertile land, many rivers, and a long coastline. It shot to prosperity in the late 19th century. By 1913 it was one of the world’s 10 richest countries. In faraway France, if someone flaunted great wealth, friends would say he was “riche comme un Argentin.”
No one uses that line anymore. Argentina has squandered its gifts. Once, its per-capita income was equivalent to that of Switzerland; now it hovers around the level of Russia or Turkey. A veritable mini-industry has sprung up trying to explain how this happened. How could a country that was once rich and confident stumble and fall?
A key factor in Argentina’s decline was the weakening of political institutions. Venal leaders were able to twist the government to their will. Checks and balances stopped working. Central to this institutional collapse was the decline of the Supreme Court. It became a pawn of the powerful, even ordering compliance with presidential decrees that Congress had not approved. Honest judges were subjected to political trials or forced to resign. Not surprisingly, citizens lost confidence in the justice system.
Argentina rose to its peak of wealth by becoming a great exporter. That vigor faded as the country adopted protectionist trade laws. It cut itself off from countries that did not meet its economic or political criteria. At the same time, it failed to invest in research and had to seek technology abroad.
The other major investment that Argentina failed to make was in education. Like some other countries over the course of the 20th century, it made the mistake of concentrating on accumulating physical and monetary capital without building human capital. Yet countries thrive when they encourage and support education. Those that limit access to education let a valuable resource go to waste. Argentina’s experience suggests that this contributes to national decline.
The final blow came as bewildered Argentines were seeking to understand why their run of prosperity had ended so abruptly. A power-hungry demagogue, Juan Domingo Perón, told them that their decline was not their own fault or the fault of bad policies but the work of evil foreigners. He whipped up the masses, won the presidency in 1946, and, by the time he was through, managed to destroy much of Argentina’s remaining prosperity. This led to decades of electoral fraud, corrupt presidents, military coups, and spasms of brutal repression. The population became passionately divided, even to the point of civil war. Thousands died violently. Argentina’s institutions proved unable to withstand the turmoil and temptations of modern politics.
Comparing today’s United States with yesterday’s Argentina produces some uncomfortable parallels. Our political institutions are weakening. Congress is a pit of rancor where the public good seems lost amid scorching invective. The Supreme Court has become a partisan battleground. It is no wonder that public confidence in both Congress and the Supreme Court has plummeted. That is dangerous in any democracy.
Also dangerous is our refusal to pay for the education of young people. It seems a no-brainer that if a country assures every citizen access to a full education, the country will become stronger and richer. Yet in the United States, many kids don’t get first-rate primary and secondary education. Many high school graduates can’t afford to pay for college. Every one of them is a missed opportunity for our country.
Most chilling of all the Argentine specters is that of the flag-waving, rabble-rousing, chest-thumping, foreigner-blaming political messiah. Perón rose to power with the support of angry voters who felt cheated and left out. Argentina was in bad shape. Incomes were dropping, inflation was rampant, and the government was run by sleazy thugs. Meanwhile, a rich elite thrived. By the 1940s, one percent of the population owned 25 percent of the country’s wealth. Something similar is happening in today’s United States. According to Federal Reserve data, one percent of our population now owns about 35 percent of the nation’s wealth.
Enraged by what they saw as massive injustice, Argentine voters fell under the spell of a charismatic charlatan who promised to return their country to its past glory. He did the opposite, leaving a legacy of destroyed institutions, political instability, and deep polarization. Argentina is today a free and vibrant society, but it has not recovered from its tortured past. Until it does, it won’t be able to climb back into the ranks of prosperous countries.
Argentina’s story reminds us that there can be such a thing as a formerly developed country. Its decline teaches other countries clear lessons: Educate your citizenry, trade with everyone, and promote scientific research. Also: Don’t let your institutions, especially the Supreme Court, become politicized. Finally: Resist the siren call of political demagogues. That way, as Argentines know, lies perdition.
Stephen Kinzer is a senior fellow at the Watson Institute for International and Public Affairs at Brown University.