By Guido Di Tella
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Additional info for Argentina under Perón, 1973–76: The Nation’s Experience with a Labour-based Government
Radicals, who shared these apprehensions, and Peronists, who did not, were also sternly opposed, as were the trade union groups who had acquiesced at the beginning. The agricultural sector was nearly in a state of rebellion, while the more locally owned and smaller enterprises had been antagonised by the modernisation programme. The Government retained only the support of the larger and more international business sector, an economically significant but politically insufficient base of support.
Much has been done, but not at the pace required by the world in which we live' (Ciarfn, 14 Nov 1966). It is still open to question whether the Krieger Vasena programme could have continued with minor adjustments if political troubles had not appeared. A devaluation of the peso, an increase in beef prices in particular and a new round of inflation were inevitable. Probably the 1971-2 developments would have taken place in any case, but not necessarily on the same scale. 36 Argentina under Peron The argument that the political troubles were a direct consequence of Krieger Vasena's economic policies cannot really be upheld.
This was made compatible by the drastic reduction of inflationary expectations and the increase in the demand for cash and monetary assets. A sort of incomes policy was imposed through the freezing of wages at 95 per cent of their historical real values, which allowed wages to maintain their share of the GNP at around 44 per cent. At the same time a flexible price agreement with the 500 leading firms was made. After nearly two years the programme achieved a reduction in the rate of inflation to less than 10 per cent per year (something that was to be short-lived) without a reduction in the level of economic activity.
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