Author : Leandro M. Bona Edinburgh - October 2017

1. Author:Leandro M. Bona Edinburgh - October 2017 FESTIVAL FOR NEW ECONOMIC THINKINGunderdevelopment and wealthEconomicsurplus in Argentina (1991-2015)

2. OBJECTIVES AND HYPOTHESES OBJECTIVES • Analyze the forms of wealth accumulation and distributive disputes in Argentina between 1991 and 2015, combining the economic-structural, political-institutional and ideological-symbolic dimensions • Recovering the notion of Economic Surplus (State-social classes - ideology) • Propose a methodology for measuring CSR and ES • Identify the destinations of the ES by analyzing the behaviors of the appropriate sectors of the same between both stages HYPOTHESES • Between 1991 and 2015 Argentina implemented two patterns of accumulation from the point of view of ES analysis • Subaltern classes reflected in state policies a series of responses to their demands during postconvertibility regime • State policies played a fundamental role in the processes of ES generation and appropriation • ES destinations showed important differences between the two stages

3. ES: twoapproaches Paul Baran • Monopoly capital marxism • Marx’s surplus valueisreplacedbyEconomic Surplus Theory • Marx: Profitratefalls • Baran and Sweezy: ES grows Celso Furtado • Latin American structuralism • 1970’s debate: ES shows thattheproblem of LA isnotgeneration of wealth, butit’sdistribution • Rent (natural resources) and profits

4. Baran, Furtado and ES theory • Objectives • Tracing a common theoretical core between Paul Baran and CelsoFurtado • Propose a methodological criterion to analyze the Argentine political economy between 1991 and 2015 with the chosen tools • Why Baran and Furtado? From the perspective of monopoly Marxism and Latin American structuralism. ES vs. Marx’s surplus Proposal • Structural historical analysis of political economy • ES-social classes-state • Domination / dependency relations

5. The two stages under study Why were there two different projects between 1991 and 2015? How did they articulate? • 1976-1988: financial valorization • Hyperinflation: neoliberal common sense • Convertibility: attack on working class (openness-deregulation-privatizations) • Cycle of indebtedness and capital flight • Growth of the market-outsourcing sectors, services, finance • Organic crisis in 2001 • Kirchnerism as a passive revolution: "tension between renewal and restoration in times of transition" • Two moments: 2002-2008 and 2009-2015 separated by national and international conflicts • New role of the state without structural changes in the productive matrix • Posneoliberal era?

6. Social Cost of Reproduction • New methodology following Furtado (1978) and Sbattella et al. (2012) Total SCR = SCR salaries + SCR pensions + Public Expenditure in basic education + Public Expenditure in health + Residential subsidies in transport and energy - tax pressure • SCR salaries = weighted average salaries of formal and informal • Retirement SCR = Minimum Pension (% coverage) • Subsidies = residential on transport and energy (bills) • Tax pressure = based on 5thdecileaccording to Gaggero and Rossignolo (2012)

7. Social Cost of Reproduction Evolución de los salarios de referencia del CRS salarial, del salario promedio del sector registrado, del salario promedio del sector no registrado y del Salario Mínimo, Vital y Móvil en pesos de 1991. Porcentajes de desocupación e informalidad laboral (no registro), eje derecho. Años 1991-2012.

8. Consolidated total publicexpenditure/GDP

9. Components of SRC (share of GDP)

10. Economic Surplus destinations • Detecting changes in patterns of accumulation analyzing ES destinations • Capital flight • Productive investment • Importations of consumer goods • Sumptuous residential construction • Deposits (savings) • Non-essential consumption

11. GDP = ES + CSR + Kdep

12. Capital flight (link withdebt)

13. Capital flight (BP and stocks methods)

14. Productiveinvestment

15. Uses of ES as a share of total ES

16. DGP = CSR + productive and unproductivedestinations

17. Dynamics of GDP, SCR and ES

18. Conclusions • Two forms of articulation within political society, civil society and the forms of generation and distribution of the Economic Surplus were manifested, separable by the abandonment of the convertibility monetary regime. • They are important differences between the two periods, analysing the evolution of the Cost of Social Reproduction and the destinations of the Economic Surplus. • It is possible to distinguish two sub-steps in each period (1991-1996 and 1997-2001, 2002-2008 and 2009-2015), from the point of view of the external situation, the behaviors of dominant classes and the responses of the subaltern classes

19. Conclusions • The financial recovery allowed a strong expansion of the concentrated sectors but the "business community" broke down towards 1998/9 • The regressive cycle of CSR (unemployment, wage decline, informality, reduction of pension coverage) was key to the outbreak of convertibility, as well as the systematic fall of the ES. • Subaltern classes returned to the political stage in 2001, but unable to forge their own consistent program • After the "organic crisis", during the postconvertibility regime, the tutelary character of the state was redefined • CSR was the variable that expanded most (employment, wages, pensions and state action) after the devaluation, and ES did significantly, but at a lower rate • The two stages of Kirchnerism express within the political society the changes within civil society in the heat of new distributive disputes • In order to maintain the distributive profile, by 2012 there were bottlenecks that attempted to be partly paid through the interventionist strategy (YPF, exchange control, tariff measures, employment protection), but they clashed with the dependent productive matrix