"This could be accompanied by the transformation of dollar debts into pesos. That would stop widespread bankruptcies as most Argentines earn in the local currency but have debts -- such as mortgages -- in the greenback."
The above forecast is entirely untrue. The pesoisation of the Argentinian economy will lead to super devaluation. This will lead to a massive cut back in the living standards of the working class. The outcome will be an enormous fall off demand for consumer commodities which means that many such companies will go to the wall. This in turn will lead to a corresponding fall off in demand in the industrial sector leading to the closure of companies that produce means of production commodities. Both these developments will lead to further unemployment and further falling demand. The companies that will survive, the largest and most competitive, will be able to enlarge their size and make themselves even more competitive. Super devaluation will lead to a fall in the price of exported commodities. This will make exporting firms more competitive. However this may generate further competitive devaluation. Countries, such as Brazil, may in turn further devalue their currencies generating further problems. The source of the Argentinian economic crisis is located within the production process. Yet the bourgeoisie engage in futile attempts to solve the crisis within the sphere of circulation --such as tinkering with currency. The principal condition for solving the profitability crisis facing Argentinian capital is deep recession. The reason as to why the recession has been so enduring --some say it is four years old- is because the recession has not bitten deep enough. The more thorough going the recession the better the recovery. However since Argentina is merely one unit in the world capitalist system there still only limits to the success of domestic economic depression as a solution to its problem. Since the Argentinian crisis is an expression of the sharpening contradictions within the global capitalist economic system the contradictions must be ultimately resolved at that level.Nationalism increasingly is highlighted as an obsolescent force against the increasing globalisation of capital. The problem facing the Argentinian bourgeoisie is that if it allows the recession to bite even deeper it may end up with no economy at all. The resistant working class may seize the power and taking the economy away from the bourgeoisie. Already the massive popular unrest expressed in workplaces and on the streets is evidence of the existence of the growing challenge of the working class. Then there is the fact that the Argentinian bourgeoisie is presently split as to what strategy to embark. The extent of the crisis facing capital is on such a scale that it has split the bourgeoisie. To successfully embark on a further offensive against the working class the capitalist class requires unity. As I intimated the deeper the economic depression the greater the chance of the conditions for economic recovery taking place. The deeper the economic depression the more individual capitals go to the wall. Consequently the bigger surviving capitals cannibalistically gobble up the capital of other individual capitalists forced out of business. The outcome is increased concentration and centralisation of capital. The process too entails the pushing of the price of labour power down --even below its value. Under these conditions there is a devalorisation of capital (constant and variable capital) sufficient to make capital profitable again. The outcome is rising accumulation of capital leading to economic boom. Regards Karl Carlile (Communist Global Group) Be free to join our communism mailing list at http://homepage.eircom.net/~kampf/
