The Writer and the World (71 page)

There was a smiling boy in a patterned shirt moving lightly in and out of the room while we talked. I asked about him. He was a special case. He had
entered at
Grade Twelve. How had he done that? Nobody could say; and the boy just smiled, going out of the room and then coming back
again, while the others talked of money and politicians and inflation and prices and the Grade Nine lady said she hadn’t been to a restaurant. They were not allowed to leave their offices; they were as people hemmed in by an invisible fence: confined and complaining, but timid, like a group of shades waiting for religious burial in a Virgilian netherworld.

At dusk, after the heat, the tedium of the day exploded: on unsilenced motorbikes the young men and their girls rode round and round in the streets off the main square in a blue-brown smoke haze, like people now accustomed to doing nothing.

A
RGENTINA
has consumed the people whom it has attracted; and the last twenty years have been particularly hard.

Jorge, an Anglo-Argentine, who worked as economic adviser to a large company, had said in 1972, “We could be on the verge of a real crisis.” Inflation, running on an average at 25 per cent since the Perón years of the 1940s, had risen in that year to 60 per cent; and the colonial agricultural economy of the country hadn’t really been altered. There was an industrial sector, but it ate up imports, which had to be paid for by agricultural exports.

Jorge said, “Perón precipitated this vicious circle. He didn’t start basic industries. He had to be popular, so he did the light stuff, and distorted the economy further. Industrialization was an emotional response; there was no industrial policy.” Argentine industrial goods were protected; they cost twice as much as equivalent goods abroad; and the average wage in 1972 was $50 a month. Perón had done much for the workers, but their wages could never keep up with the inflation that Perón’s policies, and policies like Perón’s, had produced.

The year before, Jorge had bought a flat. Prices were rising so fast that a week’s indecision had cost him $200—his salary at that time was $400 a month. But already—less than a year later—his flat had appreciated 80 per cent. Nineteen years on, in 1991, that purchase seemed an even better bargain.

“I bought it with a twelve-year mortgage from the bank. A fixed price, the only variable thing being the interest payable on the balance. As from 1973, when John Sunday came back”—John Sunday: the Anglo-Argentine translation of Perón’s given names, Juan Domingo—

“inflation rose even higher, and eroded the debt. So who paid? The rest of the community, the people who were not in debt. The terrible thing is that for the last forty-five years inflation has been growing steadily, month by month, with oscillations. Very few countries have been able to withstand this sort of inflation
over such a long time.
This is like the German experience of the twenties in slow motion.

“Things got really out of hand in 1974, after John Sunday’s death, when his widow Isabelita and her astrologer–witch doctor took over. An ex-corporal in the police. There was a sudden burst of inflation. I remember this: I had paid down for a suit—say $200 in pesos—and the tailor had taken my measurement. Such was the convulsion at the time, the peso lost half its value in a month. I didn’t feel I could hold the tailor to his price. And he preferred to forget about it. When we met we never talked about the suit. The stillborn suit: it was too embarrassing. He still owes me a suit—in today’s currency it would be about ten cents.

“One of the curious things about Argentina’s decline and fall—a decline without reaching the heights—is that much of the decline happened during the democratic period. The acceleration of the decline coincided with a return to democracy in 1983, after the Falklands. The irony is that both of the big parties, the Peronists, the Radicals, want to outdo one another in distributionism, and there is no longer John Bull or Uncle Sam to put in the pound sterling or the dollar.

“Things worked under the British, if you assume that we were informal members of the British empire. In 1917 our GNP was about three-quarters of the United States’s. We had the markets, we had the productivity. We had the methods—the systems, the technology. Today we have none of these things.

“You must always remember in Argentina that you’re only seeing the survivors. All the others are on Boot Hill or in mental homes. Inflation keeps you on your toes.

“Our company is in an industry where we can let you have only about four or five days’ credit. Otherwise, with the kind of inflation we have, working capital gets murdered. In our company at any time we have out about twelve million dollars’ working capital as credit to wholesalers. You want to keep that money turning over quick. If you can reduce the credit period by half a day, that’s important. Companies that have a slower turnover, like consumer durables—they probably have to give sixty days’ credit. If you’re building a ship, you have to give a lot of
credit, and you may sell only one ship a year. So you’re really up shit creek, as the Americans say.

“Another negative aspect of inflation is that you cease to worry about productivity and even technology. Now, that is the secret of all progress: productivity. But you really can get no more than 3 or 4 per cent per annum improvement in productivity anywhere in the world. With inflation like ours you can get 10 per cent
in one day
, if you know when and where to invest. In our business we have on average to pay the government taxes every fifteen days. So in those fifteen days we have to invest that money as wisely as we can. It is much more important to protect your working capital than to think about long-term things like technology and productivity—though you try to do both.

“So capital investment in Argentina is not even covering capital wear and tear. In short, when the current plant reaches the end of its working life there won’t be a provision built up to purchase new capital equipment. This is the inevitable result of inflation, which is the monetary disease. Your money is disintegrating. It’s like a cancer. You live day by day. That’s all you can do when you have inflation of more than 1 per cent a day. You cease to plan. You’re just happy to make it to the weekend. And then I stay in my flat in Belgrano and read about ancient cricket matches.

“We are now 25 per cent poorer on a per capita basis than we were in 1975. The people who are really suffering are the people you won’t see—the poor, the old, the young. These people get washed up at the big railway termini that curiously resemble Victoria and Paddington stations, because they were built by the British. The flotsam and jetsam of Argentine life—like spray from the sea, these people. I’ve never seen such signs of poverty in B.A.”

W
HAT
J
ORGE
said about industry and business was also true of agriculture: you had to remember you were seeing only the survivors. In Argentina they were either very big or very dedicated.

The Indian land had encouraged an immense greed in the four hundred families who came to possess it. And then, just sixty years after the Conquest of the Desert, Perón had appeared, driven by that same idea of the limitless wealth of the land, to plunder and to punish. At that time the big landowners were livestock farmers. Tenant farmers did the crop
rotation, renting the land for short periods; in between, the land was put back to alfalfa, for grazing. Perón, when he came in, froze the rents of the farmers. This was when Susana’s family, finding that their taxes were higher than their rents, panicked and sold. The people who held on endured some hard years. Foreign trade was nationalized; commodity prices were fixed by the state trade monopoly. The state looked for profit; it needed foreign exchange. So people had to sell at under world prices and sometimes under the cost of production. Agricultural production fell. In 1951 Argentina’s exports, which were mainly agricultural, were less than they had been in 1901. Argentina’s foreign reserves had been squandered on the nationalization of the railways and other utilities; and its imports now increased, to support such industrialization as had been got going. These imports could only be paid for by agriculture, in which people had ceased to invest. So the inflation began, ensuring that the land could never be worked by the small farmer.

Julio farmed three thousand acres. He was not of one of the old landowning families. He had turned late to agriculture, and was a dedicated man. In the 1960s he took over an estate which—from being prosperous and go-ahead during the war, and among the first in Argentina to use tractors—had fallen into ruin in the Perón time. Julio got a loan from a state bank. Of course, the manager made him wait, made him come back a few times, asked for plans, statements; and the clerks drank coffee and maté and looked straight through him and then invariably told him to go and see somebody else.

“We were lucky. We started all this on credit. We couldn’t have done it otherwise. We got in at the very last stage when credit was subsidized: the interest rate was less than the inflation rate. The bank manager knew very well he was doing us a favour.”

The inflation that worked for Julio at the start then became the tiger he had to ride.

“To survive, you have to do things that are unethical, strictly speaking. You have to be slow to pay your bills. Though now that all the bills are in dollars, you get no gain out of being late. You have to be diversified. And you have to be flexible. Under high inflation you start doing a lot of barter deals. You tend to leave the money economy. Say, I did a deal with wheat—getting fuel and fertilizer in return. You work out that you have to give four kilos of wheat for every kilo of fertilizer. We spend a lot of time now working on these things. It’s a tricky business. You
don’t want to lose. It’s important to be in a group with an adviser who would advise you on these barter deals.

“With reasonable inflation we get paid on time, and there’s no problem. It’s helped us a lot that our main product is milk. With milk we are reasonably protected. It’s paid for like this: sixty per cent on a weekly basis, and forty per cent at the end of the following month. But once you get into hyper-inflation you’re in real trouble. In 1989, near the end of the Alfonsín government, we had a hundred per cent inflation a month for four months, and we were being paid monthly for the milk—in short, we were getting practically nothing. Of course the same thing applied to the bills we had to pay, but the loss was still there. That’s something you can’t cope with. With milk you have to sell every day. If you are producing cattle or crops you can keep them in stock to sell on a cash basis.

“Alfonsín was doing nothing about hyper-inflation. He was just waiting for the new president, Menem, to take over. And Menem had been elected on a populist platform—which always means wage increases for everybody.

“At this time the company we were selling our milk to went into receivership. That meant that we weren’t paid for the milk we had supplied for six weeks. From that stage on we asked to be paid on a weekly basis. And—even with the money we had lost—we did better than colleagues of ours who had always been paid, but on the old monthly basis. Because in hyper-inflation what matters is when you’re paid.

“I was really worried that time. That was the only time. Once for ten days the banks were closed. Everyone wanted to take out his money to spend it.”

W
ITH INFLATION
like this everyone becomes a gambler, everyone lives on his nerves. And even people who win in some ways can feel exhausted and damaged, like Gui, now over sixty, who, starting with no capital, and acting at every stage out of desperation, managed over ten years to turn a $5,000 gratuity into a $140,000 apartment.

In the 1960s rents were rising; Gui and his family moved five times, each time moving down. He decided to buy. He found a little $15,000 house in a suburb which he thought he could afford. But the company he worked for didn’t think so. They refused to give him a housing loan. Instead they offered him a gratuity if he left the firm. Gui was already
committed to buying the house. So he left the company and took the gratuity—$5,000; borrowed a certain amount from his brother—$2,500; and with his brother’s help got a four-year loan from a bank for $7,500.

“Normally, at that time, a loan like that had to be repaid in instalments over two years—which is no credit at all. Anyway. There we were. We had a house. It was a dreadful little house, and we were all ashamed of it. It was in one of those B.A. areas where literally in a space of a hundred yards you move from the nice area to the poor area, with people sitting out on the pavement in their pyjamas at night. We were in the poorer area.

“And then we had a bit of luck. The bank we had borrowed the money from failed. That’s typical, in a way: a kind of Argentine windfall. So we didn’t have to pay back the $7,500 we had borrowed from the bank—though my brother got stuck for $150,000.

“We decided to leave the horrible little house. We rented a flat in a good area, and rented the house out—badly, to a person who turned out to be poor and couldn’t keep on paying the indexed rent. I should tell you also here that the district where the house was was famous for its bad administration. They would send you all the tax demands late, deliberately, so you had to pay a surcharge as well. That’s also typical of the Argentine. And you would stand all day in a queue a block long to pay.

“That was why we decided to sell the house. And then we had an even bigger piece of luck. In 1978–79 in Argentina we had a period of ‘sweet money,’
plata dulce
, easy money, when you could get thirty per cent a month on Argentine money, and the dollar became worth nothing. The factory car parks were full of workers’ cars, and people were travelling to Miami and coming back with trolleys of electronic appliances. Land values skyrocketed, and we sold the little house for $65,000, more than four times what we had paid for it—and you must remember that half the original price we didn’t even pay because of the bank crash.

“And then we thought we were caught. You couldn’t get anything in B.A. for $100,000—at that price they were laughing in your face and you were looking at two-bedroom flats with a refrigerator hanging on a bedroom wall because there wasn’t room in the kitchenette. My wife’s family’s house was on sale at $1,800,000.