Raúl Scalabrini Ortiz: The Making of an Argentine Nationalist

The Argentine revolution of June 4, 1943—once thought to be a conspiracy hatched in Axis embassies —is now recognized largely as the product of local forces set in motion under the impact of depression and war. The decline of the ancien régime and the coming of the Peronista dispensation has been widely and thoughtfully reinterpreted in terms of the political and economic aspects of the “crisis of 1930”—the collapse of Argentina’s position in world trade and the drying-up of the flow of foreign capital; the overthrow of the middle-class government of Radical President Hipólito Yrigoyen and the return to power of the great landowning class; and finally, the socially disequilibrating effects of Argentina’s rapid industrial growth during the late ’thirties and the Second World War.¹

The intellectual contours of the so-called “Conservative Restoration” (1930-43) remain to be elucidated. Neither passing references to a supposed Argentine affinity for Fascism, nor a frondescent “conspiracy” literature adequately appreciate the ideological ferment which characterized the final years of the pre-Perón era. For throughout the ’thirties and early ’forties, Argentina’s middle-class intellectuals subjected their society and its values—economic and political liberalism and cultural cosmopolitanism—to unusually rigorous examination. Many ended by explicitly repudiating those values and calling for a radical shift in national direction and leadership.²

Although the Argentine establishment attempted to write off the intellectual disaffection of those years as the product of congenital malcontents,³ the movement of dissent, like most, drew upon some of the most talented young men of the time. It is hard to deny that it played a significant role not only in undermining the Conservative administrations of the 1930-43 period, but in providing ideological sustenance for the regime which undertook to liquidate the balance of their rule.

I

The alienation of the Argentine middle-class intellectual during the nineteen-thirties was one aspect of what has been called “the world crisis of the petty bourgeoisie.”⁴ The Argentine middle class— the largest and most self-confident in Latin America—not only absorbed the heavy economic shocks of the depression, but sustained a psychological blow of major proportions.

When the Conservatives, on behalf of the ranching aristocracy, returned to power by means of a military coup on September 6, 1930, the hard-won prerogatives of the Argentine bourgeoisie were sharply reduced. A purge of government offices and a reduction of the national budget deprived its bureaucratically oriented members of much-desired sinecures.⁵ A nascent entrepreneurial sector was faced with an economic policy in which export agriculture apparently took precedence over industry. And finally, the prospect of a middle-class return to power was definitively ruled out by systematic manipulation of elections (the so-called “patriotic fraud”).⁶ Serious middle-sector economic problems throughout the decade were thus aggravated by the prospect of blocked social mobility and a closing off of previously-acquired channels of political influence.

Having already experienced the exhilaration of playing the major role in the Argentine political drama, however, the middle class was not pushed offstage easily or quietly. To protest the electoral fraud, the Radicals under ex-President Marcelo T. de Alvear (1922-28) returned to a policy of electoral abstention which had characterized their activity prior to the widening of suffrage on the eve of the First World War. For a time it even appeared as if Radicalism would go beyond mere abstention and recapture power by force; from 1930 to 1933 some eight revolutionary plots materialized, three of which actually reached the point of armed confrontation.⁷ When the last of these uprisings (patriadas) collapsed in December, 1933, and Alvear decided to lift the party’s abstention in early 1935, the Argentine middle class had spent the last of its “revolutionary” energies. From then on much of the opposition to the Conservative regime was carried on by its disaffected young intellectuals rather than by politicians.

Although the Radical Party was the Argentine middle-class organ par excellence, it was by no means the only political tradition within which youthful dissenters sought to find their way out of the crisis. In fact, quite the opposite seems to be the case. The contradictory cultural, economic and political interests which divided Argentina’s large but heterogeneous bourgeoisie were reflected in widely divergent analyses and proposals for action.

Literary figures, for instance, tended to see the Argentine problem in introspective terms; among them there was much talk of congenital defects in the “creole” character,⁸ and of “inspiration cut short,” the mysterious, apparently inexplicable loss of national direction and purpose.⁹ The moderate left confined itself to calling for a return to civic virtue, honest government, and moderate social reform¹⁰ while a handful of Marxists advocated local replication of the Soviet experiment.¹¹

The most influential group of intellectuals, however, combined nationalism with economic determinism. As nationalists, they addressed themselves to the unique, rather than to the universal aspects of the situation. That is, they rejected the view of Marxists and liberals that the Argentine dilemma was but the product of a larger world cataclysm. As economic determinists, they analyzed the crisis in explicitly “structural” terms, interpreting it as the historical price which the nation was paying for having broken with a more “natural” line of economic development sometime in the past.¹²

There was no agreement among this group, however, as to just what constituted that line. An “aristocratic” wing centered its indictment on the effects of Argentina’s transformation in the late nineteenth century from a predominantly rural and traditional society to one that was at least partly urban and modern.¹³ For example, poet and repentant anarchist Leopoldo Lugones bewailed the breakdown of the ordered, patriarchical society of the traditional estancia, blissfully immune to those unwanted byproducts of economic modernization-anarchism, socialism and democracy.¹⁴ In a similar vein, novelist-biographer Manuel Gálvez attributed Argentina’s ills to its excessive urbanization and its cosmopolitan character. In his novel of the Revolution of 1930, Hombres en soledad, a nationalist legionary rambles on, apparently with the author’s approval, about the need for a “moral housecleaning” of Argentine society—closing down the cabarets, shooting the purveyors of vice, and commencing “the despotism of decency, of austerity, of the daily bath.”¹⁵ Conservative intellectual Carlos Ibarguren initiated a whole cycle of historical revisionism in 1930 with his laudatory biography of the nineteenth-century dictator Juan Manuel de Rosas, in whom he saw an early model of what the nation needed in the modern age—“realism and conservatism” and the defense of order and property—values allegedly undermined by the accession of the Radical “masses” to power in 1916.¹⁶

The other nationalist wing sought the causes of collapse, not at the bottom of Argentine society, but at the very top. Generally coming out of Radical backgrounds, they framed the national dilemma in terms of an unholy alliance between “country-selling” (vendepatria) oligarchs and foreign imperialists. In books like Benjamín Villafañe's La tragedia argentina (1943), Julio and Rodolfo Irazusta's La Argentina y el imperialismo británico (1934), José Luis Torres’ Algunas maneras de vender la patria (1940), and Raúl Scalabrini Ortiz's Política británica en el Río de la Plata and his Historia de los ferrocarriles argentinos (both 1940), they depicted Argentina as a sort of gigantic estancia whose agricultural and stock-raising capacities were being mercilessly exploited by Great Britain through a pliant Argentine élite.

This “Jacobin” or popular nationalism had considerably wider appeal, not only because it was more sophisticated and plausible, but because it was far less exclusionist. For the popular nationalist, the “un-Argentine” elements in society were not the immigrants, the Jews or the Freemasons (favorite targets of the aristocratic nationalists), but the scions of distinguished families, prototypically portrayed as lawyers for foreign firms or their pawns in national politics. Popular nationalism thus offered the Argentine middle class the gratifying possibility of pursuing its own corporate interests—social mobility, economic opportunity, political influence—within the framework of a crusade for national sovereignty.

The most outstanding exponent of popular nationalism during the ’thirties was probably Raúl Scalabrini Ortiz. Julio Irazusta had a better literary style and José Luis Torres was more splenetic, but none of Scalabrini’s rivals equalled him in expository power or persuasiveness. Like the American muckrakers Charles Beard and Ida Tarbell, Scalabrini owed an unacknowledged debt to Marxism, for like them he sought to explain national problems in terms of the peculiarities of economic development. To the revision of economic history, a genre characterized (in Argentina, at any rate) by innuendos, non sequiturs, and unsubstantiated allegations, he brought clarity, logic, and careful documentation (often drawing on British or impeccably pro-British sources). It was these qualities which made his two major works, both published in 1940, the major source of intellectual ammunition for Argentine nationalists of all tendencies during the critical months between the outbreak of the Second World War and the Revolution of June 4, 1943.¹⁷

Small but athletic, aristocratically handsome, intense, well traveled and well read, Scalabrini was one of the most influential intellectual personalities to emerge in the Argentina of the 1930s. Some ten years after his death he remains a source of lively controversy, and his books are still read and discussed. In the atmosphere of intellectual revision which pervades the post-Perón era, there seems to be a particular place for the cool, close argumentation with which Scalabrini sought to destroy the myth of Argentine progress.¹⁸

II

When Raúl Scalabrini Ortiz was born in Corrientes in 1898, it would have been difficult to foresee his future career as a Jacobin nationalist. His father, Pietro Scalabrini, was an Italian naturalist who taught at normal schools in Entre Ríos and Corrientes, and is credited with having introduced Comtian positivism into Argentina.¹⁹ On his mother’s side he came from the highest provincial aristocracy, and like his third cousin Manuel Gálvez, he was a descendant of the earliest settlers in the River Plate region. The predominant intellectual influences in the Scalabrini home were liberalism, positivism and masonry, blended into the political and social conservatism of the landed élite.²⁰

Raúl showed an early interest in philosophy and mathematics, and his honors thesis at the University of Buenos Aires, “Errors That Affect Tachymetry,” was published in 1918.²¹ Falling under the spell of metaphysical poet Macedonio Fernández, he suddenly abandoned mathematics for literature, and in 1923 he published a small volume of somewhat overwritten short stories entitled La Manga.²²

The following year he made the inevitable pilgrimage to Europe, in the company of his friend Ernesto Uriburu, spending a semester at the Sorbonne in Paris before returning home to dedicate himself to writing and ranching. In the latter part of the ’twenties he was a frequent contributor of verse and theater criticism to Argentine newspapers and magazines, including the powerful Buenos Aires daily, La Nación, the magazine El Hogar, and the fashionable literary review Martín Fierro.

A friend who has described Scalabrini’s early evolution claims that the most important intellectual influences of his youth, apart from Macedonio Fernández, were continental nationalist Manuel Ugarte, French political scientist André Siegfried, Lenin, and Argentine historian and critic Ricardo Rojas.²³ The latter was an early advocate of Argentine cultural (and, to a lesser degree, economic) nationalism, and his La restauración nacionalista (1909) and Blasón de Plata (1910), were much read at the University of Buenos Aires during Scalabrini’s student years there. At any rate, as early as 1924 the young aristocrat was allowing himself to doubt that the highly cosmopolitan nature of Argentine society was an unmixed blessing. “Our greatest anguish,” he wrote in Martín Fierro, “comes from not knowing who we are . . . We speak in Spanish, we act in English, our tastes are French, and we think . . . but do we actually think?” On economic matters he was more cautious. Europe absorbed the wheat of Argentina’s pampas and Argentina “some of the ideas of Europe,” but he confessed his uncertainty as to “who came out ahead in the bargain.”²⁴ The strongest criticism of the Old World he made at this period was that “all European systems try to make man a cog in a wheel,”²⁵ a comment which has the ring of Ricardo Rojas but is hardly remarkable.

At the time of the Revolution of 1930 Scalabrini was at work on an essay interpreting the special sensibility of the porteño—the man of Buenos Aires. Published as El hombre que está solo y espera in 1931, it won its author two important literary prizes and propelled him to the front rank of promising young Argentine writers. Rich in the lunfardo dialect of the Argentine port, the book is written in an extremely disjointed and prolix style. In it Scalabrini constantly referred to a mysterious “spirit of the land” which he believed was an overriding influence in forging national unity and commitment in spite of the highly diverse ethnic origins of many of Argentina’s people. The theme was not new, but it was presented in a highly original and amusing manner.

Though far from being a political treatise, El hombre que está solo . . . is not devoid of political content. Writing at a time when the outcome of the Argentine political situation was uncertain and the economic situation was in a state of flux, Scalabrini argued that foreign capital had a claim to Argentine good will, although its activities required constant surveillance. Since the porteño, “even when he knows nothing about finances, instinctively understands that capital is an international power that refuses to be nationalized,” there was little cause for alarm. “The porteño has prevented capital from infecting the state machinery, and has reminded members of the government who have favored its aims that their real profession is elsewhere.” The man of Buenos Aires will tolerate anything from a politician, Scalabrini boasted, but what he will not tolerate is “to have control of the government slip into foreign hands.”²⁶

He attributed the rise of Hipólito Yrigoyen and Radicalism to the Conservatives’ excessive solicitude for foreign capital, and conceived of the Revolution of 1930 as a return of foreign influences to power. The prospect did not greatly alarm him, however; in fact, he was so confident of an immediate reaction that he invoked Providence with the hope that “it cost but little blood and chaos to dislodge” the usurpers.²⁷ Events undermined Scalabrini’s faith in the porteño’s sense of national identity and his intransigence so quickly that hardly had he won his laurels as a literary figure when he felt compelled to abandon poetry for politics.

III

The Revolution of 1930 restored the Conservatives to power in Argentina at a particularly critical moment. Stock-raising and agriculture, the chief source of national and private wealth, had entered the doldrums under the impact of the world economic slump. Argentina’s export income had been steadily dropping since October, 1929, and in 1930-34 a 40 per cent fall in the world prices of meat, wheat, flax-seed, hides and wool inflicted upon the primary sector a loss of $600 million a year.²⁸ Declining prices led to cutbacks in agricultural production, but failed to check Argentina’s deteriorating terms of trade. No less serious was the drying up of the flow of foreign capital, increasing the burden of the country’s foreign debt, for it had been a frequent practice for Argentine governments to meet old obligations by contracting new ones.²⁹ Finally, prospects of Argentine recovery were clouded by growing European attempts at agricultural self-sufficiency through protective tariffs, regional trade blocs, and the institution of import quotas and exchange controls.

From the point of view of the Argentine beef magnate, the most alarming development was the Ottawa Conference on Imperial Preference to which England summoned her dominions in 1932. The result of this meeting was a decision to replace Argentine wheat and meat with imports from Australia, New Zealand, and Canada. Reduction of British purchases of Argentine chilled beef and frozen mutton was to go into effect in June, 1932, initially at the rate of 5 per cent per quarter, increasing after nine months to 15 per cent. It appeared that ultimately the British market would be closed to Argentine meats altogether. Since 99 per cent of Argentina’s chilled beef went to England, and since meat exports accounted for half of her foreign exchange earnings, the Ottawa protocols threw grazing interests into a state of near-panic.

The response of Argentina’s new president, General Agustín P. Justo, was to dispatch a high-level economic mission to London headed by his vice-president, Julio A. Roca, Jr. At the same time he abandoned traditional laissez-faire for a vigorous policy of state intervention in the economy. To improve the Argentine trade balance, he instituted exchange controls and devaluated the peso. Then, to force up the domestic price of agricultural products he created regulatory boards empowered to limit the production of staples like cereals, meat, sugar, and wine through a quota system.

Meanwhile, after three months of negotiations with Board of Trade President Walter Runciman in London, the Roca mission reached a series of bilateral agreements which assured continued British purchases of Argentine beef. In exchange the Argentines agreed to make important tariff concessions to British manufactures, to refrain from compelling the (largely British-owned) Argentine railroads to reduce their passenger and freight fares, and to award 85 per cent of the meat business to British-owned packing houses. Finally, the Argentines promised to accord “benevolent treatment” to the £420, 375, 352 worth of British investments in the country,³⁰ a pledge so vague in its wording as to admit of the freest interpretation by friends and enemies alike.³¹ The work of discrediting the Roca-Runciman Pact was made immeasurably easier by the obsequious conduct of the Argentine negotiators in London, who went out of their way to assure their British hosts that “Argentina is very like a British dominion,” and that in economic matters it was “an integral part of the British empire.”³²

Nonetheless, had the Justo government rested upon a genuine popular mandate, the London treaty might well have been accepted with a minimum of discussion as the nation’s only possible alternative in a time of crisis. (The reception of the D’Abernon agreements, negotiated by the Yrigoyen administration in 1928, would seem to suggest this.) But in the climate of political cynicism and distrust generated by its handling of the 1932 “elections,” the regime found its dealings in Great Britain and its economic policies at home subjected to an unwantedly severe scrutiny by its opponents.

The tone of much that was to follow was set by Lisandro de la Torre of Santa Fe when the Roca-Runciman Pact reached the Senate for ratification in early 1934. In a speech which lasted several days and climaxed rather spectacularly with an assassination attempt, de la Torre condemned the agreement on the grounds that it awarded a virtual monopoly to the British meat-packing houses. The quota system (with 85 per cent going to foreign packers) artificially created a buyer’s market in which smaller cattlemen would be ruined. Furthermore, he concluded, such a concession amounted to a surrender of national sovereignty; England had wrung from Argentina concessions which her own dominions would never grant. Others picked up this theme, which quickly reappeared in an infinity of variations, all emphasizing the point that the Conservatives had “sold out” the country as a whole for the benefit of a handful of beef barons and their British customers.

One of the most dramatic manifestations of opposition to the treaty and to the government that had signed it was the abortive Radical revolt of December, 1933, in Corrientes, Entre Rios and Buenos Aires, led by Yrigoyen’s former aide-de-camp, Lieutenant Colonel Francisco Bosch. A combined civil-military movement aimed at the simultaneous seizure of several provincial capitals, its revolutionary manifesto called for a “denunciation of all agreements contracted by the government since September, 1930, and the forced withdrawal from all public, representative and judicial or executive positions of persons who had or who might have had anything to do with foreign capital.”³³ The author of that document was Scalabrini Ortiz, who had been recruited by Bosch to draft proclamations in the Buenos Aires headquarters of the revolutionary general staff.

The revolutionaries acted with great boldness and spirit of sacrifice, but failed to hold a single city or provoke a general uprising. In Rosario the movement was suffocated by regular troops, and in Buenos Aires a security leak led to a general round-up of revolutionaries, ultimately amounting to 1, 000 throughout the province. The most critical encounter took place from December 30, 1933, to New Year’s Day, 1934, in Corrientes, where a small force of irregulars —students, soldiers, and young professional men—were quickly routed in a clash with army troops at Paso de los Libres (“Passageway of the Free”). When news of this defeat reached the remaining rebel forces that had managed to capture the Correntine city of San Tomé, they withdrew and the entire insurgency collapsed.³⁴

After Paso de los Libres Scalabrini spent a short time in jail before going into exile, first to Uruguay, and then to Europe with his bride Mercedes Comaleras.³⁵ We are told that his second visit to Europe transformed him from a skeptical observer to a fiery nationalist who saw in the Old World’s inability to deal with the economic crisis the definitive proof of its decadence.³⁶ The process must surely have been more gradual, but the second European journey does mark the end of Scalabrini’s purely literary career and his emergence as a major nationalist intellectual and publicist.

In Europe the young exile’s first opportunity to strike back at the Justo government came on a visit to Germany, where Hitler had been in power for more than a year, and where enemies of British imperialism could be sure of finding a sympathetic audience. At the request of the Frankfürter Zeitung Scalabrini wrote two articles setting forth his own views on the Argentine situation.³⁷ Although they contained nothing that would not become the common intellectual property of all Argentine nationalists by the late ’thirties, the fact that they appeared in a German newspaper laid Scalabrini open to charges of being a Nazi sympathizer, an accusation which arose on the eve of the Second World War, when he was a leading figure in the movement to preserve Argentine neutrality.

Until 1930, he wrote in the first article, the Argentine Republic ‘lived in complete confidence of the unlimited possibilities it possessed for future development.” Argentine leaders “wallowed in an optimism of plenty that they never thought to analyze. Nobody wanted to wait for the fruits of his labor. Instead, they were tasted in advance in the form of mortgages, bank credits, and loans of every description.” Argentines had mortgaged the future to live in an opulent present, a trap into which they were led by the illusion that national wealth was synonymous with the symbols of material progress.³⁸ Argentina did possess an impressive array of ports, railroads and telegraph wires, but it was unclear who owned them, and in any case it would not have been easy to find out, because there was no law in Argentina which distinguished foreign from native capital.³⁹

Had they undertaken an investigation, Scalabrini wrote, Argentines would have made some surprising discoveries. Although the national wealth was calculated at 50 billion pesos, he contended that only 18, 464 millions’ worth actually remained in Argentine hands, while the rest belonged to British or North American interests. Divided among 14 million Argentines, the per capita share of Argentine wealth came to 1, 318 pesos or US$ 285 (at the then-current rate of exchange). This made Argentina one of the poorest nations in the world, and explained how “a nation that exports food suffers from hunger, for the Argentine people have learned to know what hunger means.”⁴⁰

The effects of the stock market crash destroyed Argentine illusions about the country’s economic possibilities. The measures of the Justo government and its concessions to British capital led the Argentine people to suspect “though somewhat dimly, that behind all of the political positions, certain powerful interests had succeeded in attaining their aims.”⁴¹ The best indication of this rising national consciousness were armed revolts like Paso de los Libres, which had compelled “constitutional” governments to live in something like a perpetual state of siege. “Something basic was trying to express itself in Argentina’s public fife. Economic realities suddenly became more important. Mere words lost their effectiveness when confronted by the cold, tyrannical elegance of figures.”⁴² The crisis had finally compelled the Argentine people to understand that “the economic factor can operate exactly as a civil war, and that a country can be conquered with money as well as guns.”⁴³

Scalabrini argued that the most important political consequence of the crisis of 1930 had been to reveal the true divisions within Argentine society. “On one hand stands the whole nation, the whole people, without distinction as to rank or class. On the other stand the English and North American capitalists and their [Argentine] representatives, who are . . . hoping to direct the outburst of national passion” either into internecine (class) conflicts or into xenophobic outbursts against “the innocent, defenseless new immigrants, who work side by side” with native Argentines.⁴⁴ The growing clarity with which he believed Argentines were coming to comprehend their own situation led him to predict that they would “make good the mistakes we did not make,” and more important still, he pledged that they would “reconquer what has been stolen from us.”⁴⁵

Following his return to Argentina in early 1935, Scalabrini searched for a means of more widely propagating his views. He participated briefly in the publication of a weekly, Señales, which printed muckraking exposés of irregularities in the government’s financial operations. Señales was short-lived, but served to put Scalabrini in contact with a number of like-minded young men, including Arturo Jauretche, a lawyer who had fought at Paso de los Libres and had been active in the Radical Party’s youth wing since 1923.

Jauretche and another Paso de los Libres veteran, Luis Dellepiane, shared Scalabrini’s appreciation of the Argentine situation, but sought to remedy it by working through the Radical Party. They credited the administrations of President Yrigoyen (1916-22, 1928-30) with having groped for economic sovereignty—they believed, for instance, that Yrigoyen had been overthrown in 1930 by North American oil companies fearing imminent nationalization—but they felt that he and his party had failed in their mission for want of sufficient ideological sophistication. What was needed, they reasoned, was an organization within the party to engage in economic and political studies with a view to revealing the true nature of Argentina’s subservience to foreign powers. It was with this objective that they called together a group of young Radicals in July, 1935, to found the Fuerza de Orientación Radical de la Joven Argentina (FORJA).⁴⁶

Although FORJA never succeeded in fully redirecting the Radical Party to its own satisfaction, it did engage in an extremely intensive campaign in favor of its goals of economic independence, popular sovereignty, and social justice. From 1935 to 1945 its activities ranged from street-meetings and lectures to the publication of books, pamphlets, periodicals and fliers, as well as agitation in Argentine universities, particularly Buenos Aires and La Plata. Although Scalabrini had never been a member of the Radical Party, he found FORJA a congenial organizational home for his own activities, and almost immediately after its founding he became the group’s resident ideologist and chief intellectual attraction.

IV

During Scalabrini’s FORJA years (1935-43) he sought to discredit the Argentine aristocracy by re-examining its conduct of national economic policy in the nineteenth century, and calculating the long-range national and social costs of its stewardship. He concluded that by entering the world market as a producer of cheap raw materials in the eighteen-seventies, Argentina had discarded an historic opportunity for autonomous national development. The domestic and foreign interests that had grown up around Argentina’s export economy had not only enriched themselves at the expense of the majority of the population, but had created a self-perpetuating “colonial” structure.

Argentina was an agricultural and pastoral nation, Scalabrini asserted, not because it was “particularly suited” to be so, but because its primitive state suited the interests of Great Britain and the Argentine oligarchy. In fact, as a result of more than one hundred years of association with the British Empire, certain areas of Argentina had been depopulated because they produced manufactures that competed with English imports. Former centers of commercial and intellectual activity during the colonial period, such as Santiago del Estero, were ghost towns today. British policy had made it impossible “to manufacture cigarettes in the tobacco regions, spin and weave in the wool centers, mill wood in the lumber centers. The imperative of primitivism and annihilation closes all horizons to human activity.”⁴⁷ Argentina’s failure to develop her own industry, then, was not due to lack of resources or entrepreneurial talent but to capitulations which made the country hardly less a British colony than India.⁴⁸

Scalabrini’s incursions into economic history were intended to show how this state of affairs was brought about and how it was maintained. To describe the former he turned to a study of English loans and investments. To analyze the latter he singled out England’s role as principal consumer of Argentina’s raw materials and major supplier of manufactured goods.

Conventional wisdom had long held that British loans were the means by which Argentina survived as a politically independent state after her definitive separation from Spain in 1816, and a major factor in the growth of national prosperity and progress after the fall of Juan Manuel de Rosas in 1852. Scalabrini cautioned against hasty acceptance of these claims, for they implied full faith in British protestations of economic and political liberalism. His own study of British foreign policy in the nineteenth century led him to conclude that British hegemony was founded on the discovery that “the first arm of economic domination is the loan.”⁴⁹ Whatever its form, the substance of British foreign policy had been to strive for the indebtedness of new nations far beyond their capacity for repayment. This discovery had enabled England to realize her imperial ambitions not by war, but by subtler methods of economic penetration which required force only in the last resort, and even then only by proxy.

To indebt one country in favor of another, wrote Scalabrini, is “to chain it to the wheel of compound interest.” The creditor not only ends by absorbing the debtor, but is in a position to direct his trade patterns—deciding from whom the debtor shall buy and on what terms he shall sell. Indebtedness also provides an ample pretext for intervention in the internal policies of a country—as China, Venezuela, and Egypt learned to their sorrow—and is an advance free from risk, because in the final analysis the bill collector is the British squadron, to whom it is impossible not to be “at home.”⁵⁰

Like all tributary states of Great Britain, Argentina had long been the recipient of two quite different, but simultaneous, policies. One—the visible, “impetuous, impassioned, rich in flowery phrases and beautiful declarations,” mesmerized the subject people with expressions of sentiment, while the other—the invisible policy—“extracts the richest veins of national wealth . . . for the greater glory of England.”⁵¹

No transaction offered a better illustration of Britain’s invisible policy than the first British loan to Argentina, contracted with the London financial house of Baring Brothers in 1824. Although Argentine school children learned that the Baring Brothers loan amounted to one million pounds sterling at 6 per cent annual interest, Scalabrini deduced from official reports and from Professor J. Fred Rippy’s The Rivalry of the United States and Great Britain over Latin America (1929) that only 70 per cent of that sum was ever allocated by the creditor, and that Baring Brothers had discounted two years’ annual service payments in advance, so that in the end the maximum amount which Argentina could have realized would have been £570, 000. However, instead of dispatching the cash, the British forwarded letters of credit to English merchants in Buenos Aires, most of which were never fully redeemed by the government. In the final analysis the maximum amount of hard money that the Province of Buenos Aires received in consideration of the loan was £85, 500. As security the government had been compelled to put up its public lands, so that when concluded, the affair “had cost the loss of economic sovereignty, demanded a service equivalent to one-third of the total revenue of the province, and fulfilled no visible function.”⁵²

Why then had the loan been contracted? The Governor of the Province of Buenos Aires, Bernardino Rivadavia, had claimed it would relieve a serious shortage of hard currency, but Scalabrini objected that this problem could easily have been overcome by forbidding British merchants from exporting Argentine gold, which they had been doing since 1810.

The other argument in favor of the loan had been the need to construct a port and waterworks in Buenos Aires and to erect villages on the Indian frontiers, but Scalabrini pointed out that these were never built. “The only visible and probable reason for the loan,” he concluded, “was the curtailment of our national development.”⁵³ It provided the British with a handle to manipulate Argentine trade policies and detain local economic growth. All governments subsequent to Rivadavia (1820-23) were loath to enact protective tariffs for fear of irritating the British, to whom Argentina was deeply in debt. While a simple loan, no matter how large, was not enough to eternally enslave a nation, if its annual service payments greatly exceeded the country’s fiscal capacity, then, Scalabrini insisted, the debt could become “an arm or an instrument of foreign influence.” Such was the case of all British loans to Argentina.⁵⁴

The role played by financial credits was complemented by British investment, and for Scalabrini by far the best example of that was the “Argentine” railroad network, largely owned and operated by British firms. In a series of FORJA lectures, later published in book form as Historia de los ferrocarriles argentinos,⁵⁵ Scalabrini questioned that British (as opposed to Argentine) capital and management had been necessary to build the lines originally, and then challenged the frequent assertion that the British railways had promoted, or at any rate, made possible Argentine progress.

Under what conditions had England come to own Argentina’s railroads in the first place? Had Argentina lacked the capital to build them? Scalabrini’s investigations of the Western Railway, the Central Argentine Railway, the Central Córdoba, and the Buenos Aires-Pacific line convinced him that the British had acquired ownership either by purchasing already functioning Argentine lines, or by obtaining construction subsidies from the Argentine government and later acquiring its shares.

The former case was illustrated by the Ferrocarril Oeste, the country’s first line. Founded in January, 1854, by a group of porteño investors, and backed by both the Bank of the Province of Buenos Aires and the national government, it functioned for 27 years in Argentine hands. During that time, Scalabrini, maintained, it was “the most luxurious and the least expensive fine . . . offering the most economical freight and passenger rates. It was a model enterprise in relation to which all British railroad enterprises established in Argentina were, without exception, of the second rank.”⁵⁶

For Scalabrini the history of this first Argentine venture in railroading established a pattern for the alienation of numerous public services to the British. The first ten kilometers of the Oeste were completed in 1857, and by 1866 the line was carrying freight farther for less money than its competitor, the British-owned Ferrocarril Sud. In 1885 it was the undisputed leader of the Argentine system, extending from Constitution Station in Buenos Aires to Trenque-Lauquen in the west and Azul in the south. While the Sud exceeded it in mileage, the Oeste offered better equipment, services, and comforts.

Nonetheless, in 1890 the Oeste was sold to a British consortium. The government of the Province of Buenos Aires rationalized the sale on the grounds that the State was a bad administrator, and that it needed the money for the construction of roads, canals, and other public works. This argument, Scalabrini insisted, could not have been honest, for the Oeste was realizing an annual profit of 7 per cent, and the public works for which it was ostensibly sold were never built. It was rather the governor’s off-hand comment that the Oeste’s low rates presented the Sud with unfair competition that pointed to where the dog was buried. Rather than expropriate the Sud under these conditions, the government decided to alienate the Oeste.⁵⁷

Examining the conditions of purchase, however, Scalabrini found that the British did not really “buy” the Oeste at all. In the first place, 60 per cent of the price was “paid” by taking over the line’s outstanding obligations, which could of course be met out of current revenues. The other 40 per cent was raised by selling half the system to other railways. While the purchase price of the “Western Railway,” as it was now called, should have been 41 million gold pesos, Scalabrini ruefully pointed out that “any citizen could have acquired the line under the conditions under which the British enterprise took it over.”⁵⁸

Like other British railways, the Western rarely had to pay a tax on profits. The Oeste was “bought” by a certain H. G. Anderson for £8, 134, 920. Thirty days later, Anderson, who was a director of the Western Railway, turned over the line to a new company for £1, 150, 000 more. Thus the Western’s stock, one month after its sale, was watered in the amount of one million pounds sterling. As far as the British were concerned, Scalabrini wrote, this was “capital invested in Argentina.”⁵⁹

The second method of British acquisition was less subtle. The Argentine government paid subsidies to British companies to construct specific lines, such as the Ferrocarril Central Argentino, which finked Rosario and Córdoba. The constructing company was guaranteed a 7 per cent annual profit, and subsidized with more than three million hard pesos. In spite of this, the enterprise, by hiding its profits in a subsidiary land company whose capital was vastly inflated, continually claimed that it was losing money. The government not only ceded to the railroad a league of some of the most fertile land in Argentina on either side of the track, but was forced under the conditions of contract to make up the company’s “losses” whenever it failed to realize its minimum profit—an event which occurred with striking frequency.

In 1870 the line was finally finished at a cost of $f 3, 026, 265, although based on the construction costs of the Oeste, it should have required only $f 2, 275, 000.⁶⁰ In spite of the fact that the Argentine government was theoretically the company’s majority stockholder, it was not represented on the line’s London board of directors, and it completely lost control over the enterprise in 1902 when it was “sold” to the British-owned Buenos Aires and Rosario Railway. This transaction was little more than a fusion if Scalabrini is correct in asserting that the conditions of sale were the mere assumption of the Central’s obligations by the buyer.⁶¹

Having argued that the Argentines did not require foreign capital to construct their railroads, Scalabrini then turned to the more politically volatile question, namely, why were the fines sold to the British at all? They were sold, he replied, simply because the British wanted to buy them. “With the appropriation of our national railroads, the English ‘financiers, ’ besides obtaining the direct profits of the operation, acquired the exclusive control of the economy of the Interior, consolidating their [economic] domination . . . [they] deterred the natural growth of dangerous [railroad] competitors, and impeded the formation of national capital.”⁶²

More than that, the sale of these lines subjected Argentina’s entire agrarian economy to the will of Great Britain. “If the English need flax, they will lower the rates for it and it will be sown. If they need com, it will be sown. Economically (Argentine producers) will not be independent citizens; they will be colonial subjects of His Britannic Majesty . . . The English will impede our spontaneous development, foreclose industrial possibilities, and maintain us in the state of agricultural and stock producers.” In the case of the Oeste, for instance, as long as it belonged to the Province of Buenos Aires, all national industrial efforts received its aid, but when the line changed hands, everything non-agrarian was slowly corroded and eliminated through differential railroad rates.⁶³

“If one looks at a map of Argentina,” said Scalabrini, “its vast extension appears to be divided by an intricate network of rail lines that form a spider web. This visual impression is a very exact representation of the truth. The Argentine Republic is an immense fly trapped and immobilized in the network of English railway domination.”⁶⁴

Since the Argentine government had no right to intervene in the determination of railroad fares, through their manipulation of the lines the British were capable of shaping—or misshaping—the entire nature of the Argentine economy. “They can kill industries, as they have. They can isolate entire zones of the country, as they have done also. They can create regions of preference, and they have created such. They can immobilize populations according to their convenience. They can strangle certain types of crops, as they have done.” Destruction of Argentina’s industrial impulse “does not obey mere economic and financial reasons. To kill local industry is in effect to eliminate the deficits in the British balance of payments, and obtain greater profits,” for to detain Argentine industrialization was an old imperial British policy.⁶⁵ It was the configuration of the Argentine railroad map, and the schedule of English railway rates, rather than “centralism”— a fictitious political concept—which explained the disparity of development between Buenos Aires and the provinces of the Interior.⁶⁶

Other nations, such as Bismarckian Germany, the United States, and Japan, had recognized the importance of railroads to economic independence from the very start. Even the British dominions, Canada and Australia, owned their lines. Brazil and Chile, he said, expropriated British railroads in 1896. The only place where foreign countries enjoyed the privileges they did in Argentina was in Asia, where “concessions were wrenched under force” from imperial subjects. The Argentine Republic offered the British the same advantages without firing a shot.⁶⁷

The result was that “Argentine” railroads, except for the relatively insignificant state fines, were “as far from Argentina’s reach as they would be were they in India. The railroad is Argentine only to the extent that it manacles, paralyzes, suffocates and exploits natural products—that is to say, it is Argentine only as a primordial factor of anti-progress, which is the essence of a colonial railroad.”⁶⁸

If British capital and investment had been unnecessary—indeed, dysfunctional—to Argentine development, of what value had Argentina’s commercial relationship with the United Kingdom been? Whatever purposes the exchange of Argentine raw materials for English manufactures might once have served, Scalabrini replied, since 1930 the terms of trade had been disadvantageous for the Argentines. While England actually increased its imports of Argentine raw materials from 1929-33, Argentina was compelled over the same period to accept increasingly lower prices for her products.⁶⁹

The social costs of this arrangement were disastrous; in 1933, Argentina sent 9, 903, 717 tons of agricultural products to England at a time when her own consumption of food products was falling. Comparing the figures for meat, cheese, fish, wheat, sugar, potatoes, oats and butter in both countries for 1933 and 1934, he concluded that British per capita consumption exceeded that of the Argentines anywhere from 70 to 100 per cent. The average Englishman ate about 66. 7 kilograms of meat per year, but some Argentine provincials were literally dying of hunger. The man of Jujuy ate 43. 8 kilograms; of La Rioja, 27; of Catamarca, 26; of Santiago del Estero, an incredible 19. 6 kilograms.⁷⁰ What Argentina was sending to England was no surplus; the Argentine people were eating badly and living poorly so that the English people could eat and live well.⁷¹

Britain’s most-favored nation status in Argentina cost the country more than if it were an undisguised British province like Canada, Australia or New Zealand. While Argentina shipped US$ 290 million worth of raw materials to England in 1933 (Canada, US$ 422 million; Australia, US$ 290 million; New Zealand, US$ 108 million), it had a lower standard of living (average salaries, per capita consumption of automobiles, electricity, machinery, etc.) than any of them.⁷²

As long as Argentina remained dependent upon Britain for capital and manufactured products, she would be subject to absolute British control, with the attendant social costs. “A country whose railroads are English, whose public debt resides in a great measure in England, a country whose leaders consider it an honor to defend the interests of British companies, a country whose factories are in the majority the property of the English, whose meat packing plants are English ... a country without trade union organization, a country whose youth is ignorant of the most elementary principles of economics and whose intelligentsia are all at the service of England, a country whose only national consciousness is a diffuse and declamatory sentiment” was a country that England “had in her hand.”⁷³

V

From 1935 to 1940 Scalabrini carried on his campaign in FORJA lectures, and in books and pamphlets. In November, 1939, a few weeks after the outbreak of the Second World War, he decided to transfer his energies to the publication of a daily newspaper, Reconquista. The tone of the paper was set in its very title, which alluded to the successful repulsion of a British expeditionary force in 1806-7 by a small force of creoles. Ostensibly founded to advocate continued Argentine neutrality in the world conflict, Reconquista was also an excellent vehicle for the dissemination of FORJA’s program of economic nationalism—the nationalization of the railroads, the annulment of the Roca-Runciman Pact, and the reassertion of Argentine authority over mineral resources and export operations.⁷⁴

Scalabrini utilized the European war to dramatize many of the other issues he had been raising, and in the pages of his newspaper he characterized the conflict as a clash of rival imperialisms, whose only value to Argentina was the opportunity to fight its own battle against British domination. Those who argued that the country could not remain neutral in a world-wide struggle between Fascism and democracy, he insisted, were trying to make Argentines believe that their proper battlefield was in Europe and not in America, with the conscious or unconscious object of “diverting our attention to alien and non-immediate problems, so that we will not notice . . . the terrible reality of our own colonial situation.”⁷⁵ Were Argentina to enter the war, the result would be the liquidation of the few remaining Argentine fortunes by the costs of the conflict, but even more important, the extermination of “all the men of a generation that, for the first time in our history, has confronted the essential [economic] problems of our nationality.”⁷⁶

While the establishment of Reconquista spread FORJA’s influence more widely than ever before, it also generated serious internal tensions within the organization. In the first place, although most of the signed articles in the paper were written by Scalabrini or Arturo Jauretche, the former as editor accepted contributions from Argentine nationalists like Julio Irazusta or Ernesto Palacio, who were reputed to be Axis sympathizers. Scalabrini claimed that the neutrality question was the transcendent issue of the moment, and that it behooved FORJA to join hands with all political groups—whatever their motives —who opposed Argentine belligerency.⁷⁷ This was a position that many FORJA members found difficult to accept.

In the second place, some Forjistas had come to believe that Reconquista was being financed by Hitler’s embassy in Buenos Aires. Certainly the paper was published in an expensive format, and it was known that other pro-neutrality dailies like Manuel Fresco’s El Pampero were receiving German subsidies. Unlike El Pampero, however, Reconquista never indulged in blatant pro-Axis propaganda, and consistently favored Associated Press, Reuters or Havas over the German Transocean agency or the Italian Stefani wire. Although Reconquista lasted only forty-one issues—a surprisingly short life span for a paper alleged to have had access to a reliable source of funds⁷⁸— suspicions were hardly allayed when Scalabrini refused to discuss the source of the paper’s support, or when he made clear that he was not agonizing over the prospects of an imminent British surrender.⁷⁹

The controversy over Reconquista illustrated the dilemma facing an anti-colonial movement seeking liberation from an imperial power that adheres to liberal political forms at home and claims to represent them abroad. The war issue complicated matters, forcing the Forjistas to choose between the fact of British domination in the present, and the threat of German hegemony in the future. Some, like FORJA President Luis Dellepiane, although strong opponents of the British were frankly more terrified of the Germans. Others, like Scalabrini and Jauretche, believed that the world conflict offered them opportunities which domestic Argentine politics never would, and they were loath to forego the possibilities of the moment, whatever the long-term risks. The lines were drawn, and in September, 1940, Dellepiane and those who shared his views left FORJA to return to the mainstream of the Radical Party. Scalabrini and Jauretche, along with the remainder of the group, severed their contacts with Radicalism and closed ranks with other (openly pro-Axis) groups who were working for Argentine neutrality, a move which led some to doubt their patriotism and good faith. Scalabrini’s own reputation suffered accordingly, and his name became anathema in liberal circles.

The gap between Scalabrini and the Argentine left widened still further when he enthusiastically supported the Revolution of June 4, 1943, and then Colonel Juan D. Perón as its leader. The two men were brought together in July, 1944, by a former FORJA militant who had become one of Perón’s closest aides. They struck up an immediate friendship, and it was Scalabrini who first approached Perón directly about the nationalizing of the British railroads. In recognition of Scalabrini’s work in this area, Perón invited him to be a guest of honor on March 1, 1948, when the lines were “repatriated” in an impressive public ceremony.⁸⁰

Although he held no government position during the Perón years, Scalabrini remained throughout a close advisor to the President on economic questions. If the activities of the Justicialist régime raised any doubts in his mind, he kept them to himself, for his public position was that Perón embodied all he had worked for during the ’thirties.⁸¹

After the nationalization of the railroads Scalabrini returned to private life and to literary activity. The fall of Perón brought him out of retirement briefly to contribute to the neo-Peronista publications El Federalista (1955) and De Frente (1955), and later to Que (1956-58), a magazine which brought Intransigent Radicals together briefly with Peronistas in an attempt to forge a new popular nationalist consensus.⁸² His health already failing, however, Scalabrini was forced to withdraw from further public activity, and on May 30, 1959, he succumbed to cancer at his home in Olivos, Province of Buenos Aires.

VI

The nationalism of Raúl Scalabrini Ortiz represents the response of what might be called an incipient “national bourgeoisie’ at a moment of crisis in a predominantly export-oriented economy. During the late nineteenth and early twentieth centuries, the volume and vigor of Argentina’s foreign trade, the prospect of an ever-wider overseas market, and general prosperity all encouraged belief in the “trickle down” effect. Hence the group for which Scalabrini spoke preferred to remain before 1930 in the shadow of Argentina's traditional elite—the wealthy ranchers-cum-lawyers who took turns in the government, the major law firms, the diplomatic service, and the representation of foreign economic concerns. Whatever his differences with the “oligarchy,” in an expanding agro-grazing economy the small landowner or entrepreneur could expect to find little common ground with the (immigrant) working class (invariably identified with radical social doctrines like anarchism or socialism), or even with the more impecunious sectors of the urban middle class, for whom politics was above all a question of patronage. This may explain Scalabrini’s early coolness to Radicalism, a movement which— whatever else it may have been—was a protest against “the politics of last names.”

The crisis of 1930 and the measures by which the Conservatives sought to meet it, however, led Scalabrini to conclude that he was threatened less by Argentina’s small and relatively powerless labor movement than by the landed aristocracy and the “consular bourgeoisie,”⁸³ whose economic interests were totally enmeshed with those of the English, The apparent sacrifice of domestic agriculture and national industry to the exigencies of the agro-export sector drove Scalabrini and men like him, who possessed so many political and social affinities with the traditional elite, to go over to the opposition and discover points of contact with the Yrigoyen wing of the Radical Party. In the process Scalabrini discarded much of his inherited intellectual baggage; electoral fraud and the ineffectual resistance of the traditional parties convinced him that political liberalism was, in the best of times, an illusion; the events of 1930 led him to equate economic liberalism with the fact of colonial domination. When the world crisis forced the actors of the Argentine drama to drop their masks momentarily, it became clear to Scalabrini who really owned the country and at what cost.

Like other Argentine nationalists of the ’thirties, Scalabrini believed that economic problems ultimately reduced themselves to the reassertion of Argentine authority over the key points of the economy —the transportation network, banking, and foreign commerce. This approach was based on three assumptions. The first was that the Argentine economic crisis was largely political in nature. The nation’s deteriorating terms of foreign trade were less the result of free market forces than of a deal between the local elite and the British.⁸⁴ By recapturing control of the critical mechanisms, Argentina would be in a position—if not to dictate her own terms—at least to obtain equitable prices for her products.

The second assumption was that “industry” was the result of economic independence rather than its cause. Scalabrini saw industry as something toward which the Argentine economy automatically tended, and if that stage of development had not been reached, the reasons, again, were political. The Conservative oligarchy had deliberately placed obstacles in the way of industrialization—low tariffs on imports, high duties on raw materials, high railroad rates, manipulation of credit and currency—so that the problem was not so much to plan and promote industry as to dislodge the oligarchy and the British from power and allow events to take their “natural” course.

Finally, Scalabrini believed that, properly speaking, there was no “land question” in Argentina. While he opposed the large landowners for their collaboration with the British, he saw no necessary contradiction between the existence of latifundia, as such, and industrial growth. Once in control of the market, in fact, Argentina would be able to finance industrialization with the earnings from agriculture, thus avoiding the necessity of “forced marches” which characterized the Soviet Union of that period.

How profoundly Scalabrini’s writings directly influenced Perón’s economic policies remains to be more fully established. Certainly they provided much of the intellectual atmosphere in which those policies were formulated, and important congruities make it possible to discuss the limitations of one in terms of the other. Perón’s nine-year rule was marked by various statist measures which it was believed would promote, if not insure, autonomous national development. The keystone of his first Five Year Plan (1947-52) was the Instituto Argentino de Promoción de Intercambio (IAPI), a state monopoly charged with purchasing the entire harvest and negotiating its sale in Europe. In effect this imposed a high tax on agricultural producers, for the government paid inordinately low prices for yields at a time of world food scarcities. The considerable profits made from IAPI operations were then diverted to the purchase of ships, machinery, and equipment for industrialization.⁸⁵

Perón’s government also asserted control over banking, credit, insurance and transportation. In addition to purchasing some 18, 000 miles of British-owned railroads, approximately 70 per cent of Argentina’s track and rolling stock, it greatly expanded the Argentine merchant fleet and created a national airline. The state petroleum monopoly (YPF) was strengthened, and in the Constitution of 1949 all natural and mineral resources were declared to be “the imprescriptible and inalienable property of the nation.”

The limitations of the kind of economic nationalism propounded by Scalabrini and practiced by Perón became painfully manifest after 1951. Changing conditions of the world market caused a precipitous drop in the price of agricultural raw materials, and the regime had exhausted its $1.6 billion cash reserves on acquiring public services (including $600 million for the railroads), on public works, and on the purchase of military equipment. Failure to attack the question of agrarian reform had left extraordinary reserves of economic power in private hands, and when the landowners responded to IAPI prices by cutting back production, short of expropriation there was little that Perón could do but meet their terms.

At the same time, a somewhat cavalier approach to industrialization had neglected many problems of economic planning, so that by 1954 a shortage of fuels drove the government to the politically distasteful position of having to invite foreign companies to assist in the exploitation of Argentine petroleum. An unanticipated conflict between the needs of agriculture and industry urgently needed resolution; Scalabrini had not expected it, and Perón preferred to postpone action on it as long as possible. As a result, the regime drifted rudderless for four more years, until a combination of deteriorating economic conditions and political ineptitude brought about its downfall in September, 1955.

If Scalabrini’s prescription for Argentina’s economic ills had been inadequate, however, his diagnosis was not. Before 1930 Argentines tended to confuse the infrastructure of a vigorous export economy with national economic development. After Scalabrini’s eight year campaign, few of his fellow-citizens could overlook the distinction. Moreover, he had made Argentines aware of the pitfalls of economic liberalism, and taught them to doubt the extravagant claims of foreign capital. Finally, he had helped undermine a deep-seated belief in Argentina’s inevitably pastoral role in the world economy.

Scalabrini may have been incapable of charting the course of Argentine industrialization, but he had contributed to making it the goal of a wide range of political forces. While his adherence to Peronismo was something which many Argentines could never share, by the time of his death his views—as well as his personal motives and integrity—had been vindicated by a far larger public. Perhaps no greater evidence of this could be imagined than the impressive floral offering that arrived from President Arturo Frondizi⁸⁶ as Raúl Scalabrini Ortiz was laid to rest in the Recoleta Cemetery, among the aristocrats whose legacy of economic liberalism he had fought so hard to destroy.

Author notes