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Business Power and Protest: Argentina’s Agricultural Producers Protest in Comparative Context

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Abstract

The rare but important phenomenon of business protest has not been adequately addressed in either literature on contentious politics or literature on business politics. Using Argentina’s 2008 agricultural producers’ protests as an illustration, this paper develops the concept of business protest and situates it within the classic framework of business’ instrumental power, exercised through political actions, and structural power, arising from individual profit-maximizing behavior. Business protest entails public and/or disruptive collective action in either the economic arena or the societal arena. Business actors are most likely to consider protest in order to defend their core interests when their structural power is weak and when they lack sources of instrumental power that enhance the effectiveness of ordinary political actions like lobbying. I apply the business power and protest framework to explain the Argentine producers’ failure to influence export tax policy from 2002 through early 2008 and the emergence of protest against a 2008 tax increase. I then examine how the producers’ protests contributed to the reform’s repeal. The producers’ protests are an exceptional example of business protest in which the participants lacked key organizational resources that facilitate collective action.

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Notes

  1. Eaton (2011) is a recent, important exception.

  2. Protest by petit bourgeoisie sectors is more common; see, for example, Berger (1981: 92–94).

  3. This logic did not apply to soy, which is mostly exported (Richardson 2009).

  4. See also Przeworski and Wallerstein (1988), Winters (1996), and Hacker and Pierson (2002).

  5. A group can be identified as a party’s core constituency when the group holds strong preferences for, openly endorses, or financially supports the party and when the party has a history of actions and goals favoring the group’s interests (Gibson 1996: 12–14).

  6. Structural power may also be irrelevant in that policymakers prioritize concerns other than investment, like fiscal solvency or redistribution.

  7. See, for example, Lieberman (2003: 16), Frieden (1991: 34, 40), Levi (1988: 21), and Olson (1965).

  8. In contrast to my usage, the term investment strike (or capital strike) is often applied to cases of market-coordinated disinvestment or disruption of production. Many authors do not explicitly consider the possibility that disinvestment can be politically coordinated (Winters 1996: 21–22, Hacker and Pierson 2002: 297, Campello 2009: 2).

  9. This treatment is consistent with Mahon (1996).

  10. Clarin, January 18, 2006

  11. That the producers’ interlocutor within the government frequently changed highlights the ad hoc nature of executive producer consultations.

  12. For example, following conflict with producers in 1986, Alfonsín formed a council for state agricultural consultation (Gibson 1996: 163).

  13. Relations improved under Menen but resumed antagonistic dynamics under Kirchner.

  14. See also Perfil, May 25, 2008 and La Nación, October 4, 2007.

  15. La Nación, April 6, 2002

  16. La Nación, April 5, 11, 13, 25, 2002

  17. La Nación, April 28, 2002, May 25, 2002

  18. La Nación, April 28, 2002

  19. La Nación, May 27, 2002

  20. La Nación, July 20, 2008

  21. Clarín, December 2, 8, 2006

  22. Clarín, December 2, 2006

  23. Clarín, December 5, 2006

  24. Clarin, December 5, 2006. The CRA later surmised that 30 days would be necessary to noticeably reduce domestic supplies of meat and grains. La Nacion, January 17, 2007

  25. La Nacion, January 18, 2007

  26. La Nación, November 3, 7, 2007

  27. I thank a reviewer for these hypotheses.

  28. La Nación, March 16, April 6, March 21, 24, 2008

  29. Radar Macroeconómico. www.bcra.gov.ar

  30. Other informants expressed similar sentiments (author’s interview: FAA 2008 and CRA.b 2008).

  31. See, for example, Clarín March 27, 2008. Producers also claimed the reform would destroy futures markets, but such accusations were likely overstated. A 2003 anti-evasion reform that imposed transfer-pricing restrictions on grains exporters provoked similar fears; however, futures markets quickly adapted (Fairfield 2010a).

  32. See, for example, Ascher (1989).

  33. La Nación March 13, 2008

  34. This interpretation agrees with Richardson (2009: 251–2), who outlines a “tipping point” explanation for the protests and stresses the importance of the 2008 reform in resolving collective action problems.

  35. La Nación, March 16, 2008

  36. Clarín, March 13, 2008

  37. La Nación, March 22, 2008

  38. I thank a reviewer for this point.

  39. Clarin, December 13, 2006

  40. Clarín, April 2, 2008

  41. Clarin, March 23, 2008

  42. Clarin, April 3, 2008; Clarín May 27, 2008

  43. www.minagri.gob.ar/SAGPyA

  44. La Nación, April 1, 2008

  45. Pagina 12, April 8, 2008. National polls also found broad rejection of roadblocks (La Nación, May 27, 2008).

  46. Clarín, April 23, May 2, 8, June 16, 2008. However, roadblocks recurred in June, contributing to shortages and price increases. Clarin, June 24, 2008

  47. DNIAF, 2007, 2008: Recursos Tributarios, www.mecon.gov.ar; Clarin, May 6, 29, June 5, 2008

  48. CIARA: Liquidación de Divisas, www.ciara.com

  49. Clarin, June 16, 2008

  50. La Nación, March 13, 2008

  51. Clarín, March 26, 2008

  52. Datamática. La Nación, April 6, 2008; Consultor Analogías. Pagina 12, April 8, 2008

  53. Clarín, May 10, 2008

  54. La Nación, April 3, 2008

  55. Segunda Encuesta Nacional Sobre Imagen de Gestión, May 20, 2008, www.datamatic.com.ar; Management and Fit, La Nación May 27, 2008. Ibarometro’s metropolitan Buenos Aires telephone polls found that the percent of respondents viewing the producers’ demands as “just” increased from 21% in early March to 39% in early April. Analogías reported a drop in support for the producers’ demands from 64% in March to a still high 43% in April.

  56. The Universidad di Tella’s surveys, based on telephone interviews in urban areas, reported similar trends.

  57. La Nación, August 13, 2005; March 18, 2008

  58. La Nacion, March 27, 2008; Clarin, April 27, 2008

  59. Demonstrations on June 15 and 17 drew an estimated 900–1000 people. Clarin, June 17, 2008

  60. Clarin, July 9, 2008

  61. Clarín, April 21, 2008

  62. Clarín, April 17, 2008

  63. That the high court might rule against the constitutionality of the 2008 reform, given legal ambiguities, may also have contributed to the executive’s decision; however, a ruling was not imminent. Clarín, June 29, July 3, 16, 2008

  64. “Proclama de Gualeguaychú” April 2, 2008, www.ruralarg.org.ar, accessed June 28, 2008

  65. Proyecto de Resolución 612/08, www.senado.gov.ar

  66. La Nación, June 4, 2008

  67. Clarín July 7, 12, 15 2008

  68. Clarín July 2, 2008

  69. The tone of these quotes is triumphant, yet producers did not view their success as inevitable; the outcome was uncertain until the end.

  70. Earmarking the tax increase to popular projects early on might have bolstered political support for the reform; the bill sent to congress dedicated the revenue to health care, housing, and roads, but it was too late to save the reform.

  71. Booms often reduce commodity sectors’ structural power, which helps explain the recent global surge of initiatives to increase mining royalties. However, concern that countries with lower taxes will attract more new foreign investment in commodities sectors can still create structural power. The scope and outcome of initiatives also depends on domestic and foreign business actors’ instrumental power, as well as the strength of popular demands that may counterbalance their power (Fairfield 2010a).

  72. Consider workers’ factory takeovers to accelerate nationalizations in Chile (Stallings 1978: 134–7) and mass mobilizations demanding hydrocarbons nationalization in Bolivia.

  73. “The decisions to leave land uncultivated, close down factories, and otherwise undermine the economy constitute the most clear-cut instance of economic action designed literally to force replacement of the regime, with complete disregard for short-term economic rationality.” (Ascher 1984: 256).

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Acknowledgments

Fieldwork was supported by a Fulbright-Hays dissertation research fellowship and a Tinker Foundation travel grant. I thank Mauricio Benítez, Andrew Charman, Ruth Berins Collier, Kent Eaton, Roy Ellis, Tiago Fernandes, Candelaria Garay, Carlos Gervasoni, Evelyn Huber, and three anonymous SCID reviewers for insightful comments and suggestions.

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Fairfield, T. Business Power and Protest: Argentina’s Agricultural Producers Protest in Comparative Context. St Comp Int Dev 46, 424–453 (2011). https://doi.org/10.1007/s12116-011-9094-z

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