Thread by @davidfickling

Think countries can survive populist demagogues like Trump, Boris, and Modi?

If so, you might want to look at how Argentina went wrong, and Australia went right: (thread)

bloomberg.com/opinion/articl…

It's striking that in a week when institutions in Westminster's Mother of Parliaments are on the verge of going up in smoke, we're seeing another stark demonstration of the importance of institutions in the southern hemisphere.

Go back to 1900 and you'd probably have predicted Argentina and Australia would follow the same path in the 20th century.

The two were among the world's richest nations, becoming wealthy by exchanging British development capital for their abundant agricultural exports.

Both stole the land of their relatively small Indigenous populations and brought in waves of European immigrants.

Argentina was wealthier than France or Germany, home to the only branch of fancy department store Harrods outside the UK and one of the world's biggest opera houses.

Things started to go off the rails with the Wall Street crash.

In Australia, the political response to the Great Depression was an alliance between MPs with labour, business and farming interests which gradually morphed into the current ruling Liberal-National coalition.

Argentina went in the other direction. Military officers overthrew the ageing leftist Hipólito Yrigoyen in a 1930 coup and installed a quasi-fascist regime.

Among them was a young officer named Juan Perón.

To grossly simplify, Australia's Liberal-National coalition went on to democratically win government in all but 11 years between 1932 and 1983.

In the same period, Argentina was under military or quasi-military rule for all but the 12 years that Peronists were in power.

There are lots of odd wrinkles in this. Peron essentially ruled as a left-populist, although there were plenty of right-wing Peronists too.

Australia had a dodgy constitutional moment in 1975, when Labor PM Gough Whitlam was removed after he was unable to pass budgets.

But to put things in proportion, Argentina in the mid-1970s was hurtling towards the Dirty War, when right-wing death squads killed tens of thousands in a last desperate attempt to stamp out Peronism and leftism.

It's now 36 years since democracy was restored in Argentina, but it's never really recovered from its turbulent 20th century.

Even back in 1990 it was as rich as Korea, but it's likely to soon fall behind China.

Meanwhile Australia is still one of the world's richest countries.

Events this week are a particularly stark contrast.

Argentina has imposed capital controls to halt a balance-of-payments crisis.

Meanwhile Australia is likely in surplus on both its budget and current account for the first time since the 1970s.

bloomberg.com/news/articles/…

Oddly, you could make a contrarian argument that Argentina has been the more prudent economy in recent decades.

On both the budget and current account it's run smaller deficits than Australia this century:

Of course, that's of necessity. Argentina must run surpluses because its history of fiscal and monetary incontinence means investors won't give it the benefit of the doubt.

Meanwhile Australia's reputation has allowed it to run up the credit card to see it through a weak patch.

This isn't meant to be a lesson about fiscal and monetary orthodoxy, though.

My point is that Argentina's reaction to the crises of the 1930s was to break its democratic institutions in the aid of what they saw as a higher good, ie. stopping ideas they thought were bad.

Australia, for all its flaws, held tight to democracy. Despite pursuing a similar economic path to Argentina (till the 1980s, both countries pursued farm exports and protectionist industrialization), that took it to a much better place.

It's now quite common to have people proclaim that gerrymandering that blunts the equality of the ballot is a positive good:

Or that governments should have the freedom to define and force through their interpretation of the popular will in defiance of the legislature: abc.net.au/news/2019-03-2…

Or to say, in the words of Trump-supporting Facebook director Peter Thiel, that "I no longer believe that freedom and democracy are compatible", so not-democracy should win.

cato-unbound.org/2009/04/13/pet…

I hope that people cheering on the destruction of democratic institutions realize the potency of the ammunition they're playing with. (ends)

Fun little comparison. Here's Argentina's history of IMF bailouts:

imf.org/external/np/fi…

Here's Australia's: imf.org/external/np/fi…