Threat of Argentina’s Default: Expropriate the Imperialist Robbers! Cancel all Debts!

Statement by the Revolutionary Communist International Tendency (RCIT), 5.8.2014,


1.            After the failure of talks between representatives of Argentina’s Kirchner government and the US hedge funds NML Capital and Aurelius, South America’s second largest country is in danger of defaulting. These two “vulture funds,” as they are rightly dubbed in Latin America, have rejected the restructuring of debts which was accepted by 93% of the bondholders, and are demanding full payment of US$ 1.3 billion on bonds they hold. These vultures’ demands are the equivalent of 17-times (!) the sum which these hedge funds invested to buy the Argentine bonds in 2002. If the Argentine government were to agree to these demands, this precedent could trigger additional claims from other creditors – those bondholders who participated in the restructuring of most of the Argentinean debt in 2005 and 2010. Their cumulative demands would total anywhere between US$ 4 and US$ 15 billion. Argentina’s finance minister, Axel Kicillof, argues that this in turn would threaten to unravel the entire restructuring of the country’s debt, potentially unleashing claims for more than US$ 120 billion. Given the fact that Argentina’s foreign reserves currently total less than US$ 30 billion, this would mean a total default of the country’s economy. If this happens, Argentina would face yet another deep crisis with a tremendous increase of poverty and unemployment as happened when the country faced its last slump and default in 2001/02. In other words: The greedy imperialist monopolies threaten Argentina with another national catastrophe!

2.            These demands are nothing but the unabashed robbery by imperialist financial speculators against the national wealth of a Latin American country! Take the following figures which demonstrate the unlimited greed of the imperialist financial monopolies: according to official statistics issued by the Kirchner government, in 2003 Argentina’s debt stood at US$ 145 billion. Since then, the country has paid its creditors more than US$ 140 billion. Nevertheless, Argentina today still has debts totaling US$ 210 billion, i.e., nearly 50% more than 10 years earlier!

3.            These figures demonstrate, once again, that Marxists are correct in calling the system which dominates the world “imperialism.” Under such a system the entire world economy functions according to the laws of capitalism – i.e., the private ownership of the means of production in which workers are exploited to increase the profit of the capitalist class. Based on this mode of production, the world is divided into two major blocs: a small number of imperialist monopolies and great powers on the one hand, and the working class and oppressed nations – constituting the huge majority of humanity – on the other. Under this system, events like the current extortion of Argentina are by no means exceptions but, rather, constitute the rule. As long as imperialism controls the world, there can only be the endless plunder of the peoples of the South, mass poverty, and national catastrophes. The only way out of such a bleak and unacceptable fate for the mass of humanity is by smashing imperialism by means of a world socialist revolution of the working class, led by an international Leninist combat party!

4.            Argentina’s threat of default also illustrates how imperialism is a system whereby the monopolies and rich countries systematically appropriate a share of the surplus value created by the working class of the semi-colonial countries. This is what Marxists call “super-exploitation.” These extra-profits increase the accumulated wealth of the monopoly capitalists in the imperialist metropolises and, in turn, allow them to bribe the upper strata of the domestic proletariat in their own countries. This “labor aristocracy,” as Lenin termed it, constitutes the core of the reformist bureaucracy in the rich countries. Parallel to all this, the increasing poverty of the countries of the semi-colonial world forces more and more of their people to flee to the North as migrants. In the imperialist countries, these migrants are super-exploited as a cheap source of labor while simultaneously being oppressed as national minorities. These dynamics fully confirm Lenin’s theory of imperialism. It is the duty of true Marxists to defend this theory against revisionist attacks which either claim that Lenin’s theory is “out of date” (as, for example, claim the currents in the tradition of the late Tony Cliff, like the SWP [UK], ISO [USA], etc.), or which entirely deny or ignore its central tenets (as, for instance, do the CWI and IMT in the tradition of the late Ted Grant, Peter Taaffee, and Alan Woods).

5.            Recent events have also demonstrated, once again, the bankrupt nature of pseudo-“anti-imperialist” nationalism of the bourgeoisie of the semi-colonial countries. For many years, the bourgeois-populist Peronist governments of Nestor and Cristina Fernandez Kirchner were willing to pay huge sums to the financial sharks. They signed deal after deal, hoping to somehow avoid financial strangulation. Now, after the vulture funds and imperialist financial institutions have managed to squeeze more than US$ 140 billion from Argentina, they claim that this still isn’t enough and threaten the country with a national economic catastrophe. As we Trotskyists have stressed many times: contrary to the dangerous illusions spread by Stalinists and petty-bourgeois populists, the national bourgeoisie is incapable of putting up any serious and consistent resistance to the imperialist robbers. It is only the working class, led by a revolutionary Bolshevik party and with the support of the popular masses, which can defeat the imperialist bourgeoisie.

6.            The looming threat of default illustrates that, irrespective of its relative high level of industrialization, Argentina is still a semi-colonial country. In fact, Argentina is – as the present developments so forcefully confirm – completely dependent financially on the imperialist banks. In addition, foreign corporations control 82% of the output of the 500 largest companies in Argentina. Therefore, we entirely reject past assertions of various centrist currents (like the SWP [UK] and their international current IST, the CWI, or the IMT) to the effect that Argentina is no longer a semi-colonial country but rather has become a “sub-imperialist” or “second-rate capitalist power.” It is, therefore, no mere accident that these revisions of Lenin’s understanding of imperialism were used by various centrists in the imperialist metropolises to refuse the just support for Argentina in its 1982 war with British imperialism over the Malvinas Islands. Revolutionary Marxists support the legitimate aspiration of Argentina to reclaim the Malvinas from Britain. Applying the “anti-imperialist united front” tactic, as developed by the Communist International of Lenin and Trotsky, Marxists will support practical steps – including wars – against the imperialist powers while at the same time refusing to give any political support to a non-revolutionary government in Argentina.

7.            In the current situation, it is essential that revolutionaries in the US and other imperialist countries call for the immediate and complete cancelation of Argentina’s foreign debt. They must call for the nationalization of all financial institutions under workers’ control. Equally they must rally for the expropriation of the small clique of super-rich billionaires and the utilization of their wealth to fund public employment programs and to repay the wealth stolen from the South.

8.            Revolutionaries in Argentina and other semi-colonial countries should rally for an immediate halt to further interest and debt repayments as well as the immediate and complete unilateral cancellation of all foreign debt by the Argentine government! The rallying cry must be “No Payment!” In addition, they should call for the expropriation of all imperialist corporations and financial institutions without compensation and under workers’ control!

9.            Finally, revolutionaries must fight to smash the IMF and World Bank as well as to nationalize assets traded on the stock exchange and to abolish the stock market, while giving compensation to small shareholders!

10.          Revolutionaries should work for the mobilization of the working class and the popular masses for such a set of anti-imperialist demands which constitute central tenets of the transitional program. They should call upon mass organizations to organize such a struggle and to denounce their leaders if they fail to do so. They should support all practical steps of their combative leaders and even of the government if they are directed against the imperialist monopolies and powers. At the same time they should fight for an independent program of worker power which integrates the anti-imperialist demands into the perspective of a revolutionary workers’ government based on the urban and rural poor. Finally, they have to work towards the founding of a militant Leninist party as part of the new revolutionary workers’ international, since it is only such a party which can lead the working class towards victory!