Argentina’s Railroads: Atlas Shrugged vs. Twilight

I was on the bus on my way home last night when I passed this sign at the rail station:

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Fighting whom?

Roughly translated, this means fight for the return of the Argentine Railway System and is an argument for the re-nationalization of the Argentine rail system, which was privatized about 20 years ago.  To this day it remains highly subsidized and fraught with quite dangerous problems.

I couldn’t help but be drawn in, as I happen to be currently re-reading Ayn Rand’s sexy ode to free markets and railroads, Atlas Shrugged.  I got to thinking about a conversation that I have had with multiple Argentines about the difference in cultures between the United States and Argentina – namely the Protestant work ethic vs. the Catholic ideal of suffering and salvation.

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A depiction of Catholic purgatory or the Subte at rush hour in the summer?

The protestant work ethic emphasizes hard work and frugality as the way to achieve heaven, and is indeed considered synonymous with capitalism, as the term was coined by Max Weber in his 1904 work, The Protestant Ethic and the Spirit of Capitalism.  This ideal is personified by Dagny Taggart, heroine of Ayn Rand’s Atlas Shrugged.  In contrast, Catholic salvation ideology is defined by gaining heaven through suffering and enduring – the tools for salvation come from within.  To stay within the theme of flat female heroines, I think that Twilight’s Bella Swan provides an interesting example of achieving success through endurance of suffering and waiting.

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Doesn’t quite pull herself up by her bootstraps

As a preface, I was raised Catholic, I don’t think idealism is very productive, and I fully acknowledge that the majority of railway systems in the world are either highly subsidized by or entirely run by the government.  That being said, the Protestant vs. Catholic culture is an interesting concept to roll around especially when comparing Latin America to the United States.  And I couldn’t resist taking a stab at the railroad nationalization movement in light of my current reading.

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Impressive, no?

The above infographic available here describes the premises and goals of the Federación Ferroviaria Argentina, an umbrella organization of railway unions and associations.  Their major complaints are the following deteriorations that have occurred since the 1991 privatization:

▪   Number of employees has fallen from 92 thousand to 15 thousand

▪   Working track has fallen from 35 to 10 thousand kilometers

▪   Annual subsidies have risen from US $305 million annually to US $1520 million annually

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Nationalization of a railway? Shudder.

They report that rail service is irregular, inefficient, and dangerous, and that the owners of the routes have used subsidies to get rich at the expense of necessary development.  Sounds a lot like the world faced by Dagny Taggart, Atlas Shrugged’s heroine of capitalism, hell bent on saving her family’s railroad empire in the face of dirty words such as progressivism, socialism, and equalization – a world where subsidization would be equally distasteful.

Here’s where it gets fun.  The FFA states the following goals for nationalizing the railway:

▪   792 new kilometers of metropolitan rail

▪   500 new electric, two story trains that are designed and produced in Argentina

They further blame privatization for Argentina’s lost ability to produce rails and trains domestically.  The final successful outcome of this campaign consists of: employment, economic independence, political sovereignty, and social justice.

Notice anything missing?  Perhaps goals of increased transportation, benefits to commerce and trade, increased economic output?  Even if you consider transportation as a public good, the goal of a railroad is not economic independence, social justice, or even employment.

Which swings back to the larger theme.  Culturally, Argentina has an ideology that promotes fighting, suffering, and endurance to eventually be rewarded, quite a bit like Twilight’s Miss Bella Swan, who is repeatedly rescued and rewarded for her natural talents and attributes after enduring difficulties.  And to those of you who think you’re better than Twilight, you aren’t.  Keep up with modern pop culture, skim that Wikipedia article.

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Argentine protests have far more action than Twilight’s “battles”

In all actions, both government-led and in private enterprise, it is crucial to define what is success and strive for it.  In Atlas Shrugged, profit and making money become dirty words in a Dickens-worthy comically overemphasized manner.   Yet even under the “transportation as a public good” premise, the goal of a railroad system should be increased movement of people and goods and the benefits that occur as a result.

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Consequences of neglect: December 2010 collision in Buenos Aires killed 50 passengers

State intervention and indeed nationalization are arguable in many cases, but fighting and suffering for a nationalized railroad system seem to considerably miss the mark.

I am in complete agreement that the current private but subsidized model in Argentina is not cutting the mustard, but fighting for subsidization of projects to boost employment and diminish importation seems about as well thought through as one of Bella Swan’s suicide attempts.

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Don’t cry for me, Argentina

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3 Responses to Argentina’s Railroads: Atlas Shrugged vs. Twilight

  1. Hunter says:

    The “privatization” of the rail industry was and is another prime example of Argentine cronyism. Corporations are used as rewards in the political favor game. Don’t forget Macri lost Correos Argentinos in 2004 when Nestor was at the helm.

    The Ciriglianos milked TBA for all it was worth until Once, and then to save face, CFK revoked the concession, even though she was equally as culpable. Most of the government subsidies over the years went straight into Cirigliano’s pockets…and they likely fudged the numbers for a long time.
    http://www.apertura.com/negocios/Los-numeros-que-manejaba-Cirigliano-20120524-0007.html

    The stats of the rail decline the FFA cites wouldn’t happen in a free enterprise and fairly regulated market system. People might want to point lots of fingers at TBA or other “private” groups that benefit from crony capitalism, but the results of these corporations are just symptoms of a greater disease – the Argentine political culture and system. Menem through both K administrations have been equally to blame – they enable it. I wouldn’t be surprised if there are kickbacks that have been paid by the Ciriglianos to the Ks or Menem. No proof, but just a hunch.

    To the victor goes the spoils, quite a true saying when you win political office in Argentina. I’m not a fan of large union run organizations, they’re bureaucratic, crony in their own right, and really inefficient, but possibly, just possibly, would have been more effective and provided more employment than the crony capital version currently in play.

  2. Jim Haygood says:

    Speaking of Ayn Rand, it seems that since Kristina started limiting beef exports in 2009 with the idea of driving up domestic supply, Argentine ranchers have ‘gone Galt’ on her by cutting back production.

    Yesterday John Mauldin (who’s visiting his buddies Doug Casey and Bill Bonner in Salta province) pointed out that Uruguay — with one-tenth the population and one-fifteenth the land area — now exports TWICE as much beef as Argentina.

    http://www.mauldineconomics.com/images/uploads/newsletters/Beef_And_Veal.gif

    It takes some pretty serious social looting skills to knock the frigerificos — the motor of Argentine opulence a century ago — to their knees.

    Che, bella — can you spare a hundred pesos for a shishkebab?

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