Approaching the Edge of Chaos

There have been more than 500 political assassinations in the past twelve months alone, and inflation is currently running at an annual rate of 80% in Argentina, a country that is approaching the edge of chaos. Isabel Peron, who succeeded her husband as President after his death last July, has been unable to reverse two disastrous trends: the terrorist campaign of kidnaping and murder being waged by rival extremist groups of both the left and the right, and the steady collapse of what was once Latin America 's most prosperous economy. Last week TIME Buenos Aires Correspondent Rudolf Rauch sent this report:

Recklessness with money is a constant that runs through the 30-year history of Peronism. During his first years as President, Juan Peron depleted Argentina's once rich treasury to gain support among the legions of descamisados (the shirtless ones), who soon came to expect generous social-welfare spending by the government. Now that tradition of bounty has come to a screeching halt and with it, in the opinion of many observers, the sway of the old-line Peronists who served with el Lider in the years of glory. Taking their place are officials loyal to Argentina's Minister of Social Welfare Jose Lopez Rega, the shadowy confidant of Mrs. Peron. A former astrologer, Lopez Rega is widely regarded as the country's most powerful figure. He has presided over a drastic turn toward economic austerity that has enraged millions of Argentines. As one Buenos Aires columnist put it, "Peronism has yielded to Lopez Regaism."

The passage of power was signaled two weeks ago by the departure of Economy Minister Alfredo Gomez Morales, who alienated workers by refusing to go along with union demands for wage increases, amounting in some cases to 150%. Seeing an opportunity to gain influence in another key ministry, Lopez Rega apparently prevailed upon Mrs. Peron to accept Gomez Morales' resignation. His replacement was a little-known industrial engineer, Celestino Rodrigo, 60, who had previously served as Secretary in Lopez Rega's Social Welfare Ministry.

Drastic Step. Rodrigo rode to his swearing-in ceremony on the subway, a gesture that turned out to be the last popular thing he did. Two days after taking office, he devalued the peso from 15 to the U.S. dollar to 30. He also took a drastic step to solve one of the country's basic economic problems: prices, controlled by the Peronists as a populist measure, had fallen so far behind wages that production was lagging. Rodrigo announced price hikes in essential goods that quickly blossomed into across-the-board increases (see chart). On the first day of the new prices, many small stores simply closed their doors while owners put new price tags on merchandise already on hand and frantically called suppliers to find out how much it would cost to restock their shelves.

The price increases have just about eliminated the possibility of an amicable settlement of union wage claims. The government first indicated that it would accept a final wage increase no higher than 38%, but this was immediately rejected by union leaders under pressure from an angry rank and file. A proposed ceiling of 45% imposed by decree was likewise angrily rejected. At week's end the wage talks were deadlocked, and workers seemed on the verge of industrial turmoil. There was a two-day strike at heavy-industry plants in Cordoba; when demonstrations were banned by the authorities acting under state-of-siege powers, three policemen were gunned down at a power station just outside the city. In Buenos Aires, police broke up a demonstration by taxi drivers outside Government House; the riderless drivers want a supply of cheap gasoline set aside so they can lower their fares and win back passengers.

Meanwhile, the government was giving every indication that it was not even prepared to exercise firm control. Most unsettling was the disappearance of Strongman Lopez Rega early in the week. Just as the crisis was mounting, he announced that he had not been feeling too well lately and was going on a brief holiday. Since then, various rumors have put him in Spain, Italy, Brazil and the U.S.; he has also been reported to be still in Buenos Aires or on an air force base near the city. Wherever he was, there was a growing suspicion among Argentines that Lopez Rega simply wanted to put some distance between himself and the unpopular measures the government is trying to impose.

Threats of Upheaval. Ironically, many of the economic measures now being taken could have been imposed with far less turmoil two years ago, when the government under newly installed President Juan Peron enjoyed immense popularity. Now, badly weakened and without the unifying prestige of el Lider, the government may not be able to withstand the growing political pressures. One ominous possibility for the future is a military coup. Until recently, most people remained confident that the armed forces would stay out of politics, mainly because taking power would require the armed forces to shoulder the blame for the economic austerity that surely lies ahead. Yet if there are further threats of upheaval, the military, with its long tradition of interference in political affairs, might feel obliged to step in.

As if to forewarn of that danger, the Buenos Aires daily La Opinion last week published a front-page editorial entitled "For Whom the Bell Tolls." In an appeal for return to political decency by all groups, the paper intoned: "In the Argentina of today, the death of anyone diminishes the rest; the bells do not toll [just] for those killed [by political extremists], they toll for the rest of their compatriots."

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