What are the fundamental principles of social inequality today And on the top of which pyramid do the elites rise? This is the main question on which an interesting investigation, recently published, on the rich and powerful in Argentina is based. The study was turned into the book “The 99% against the 1%? Why the obsession with the rich does not serve to combat inequality” (XXI century), and its author is called Mariana Heredia, PhD sociologist at the École des Hautes Études en Sciences Sociales in Paris. Heredia is a specialist in issues of social inequality, a professor at the UBA, Unsam and the University of San Andrés.
The “99% vs. 1%” arises from the studies of the French economist Thomas Piketty, to account for economic accumulation and the differences between rich and poor of the world. Starting from these proportions, Heredia analyzes in his book how these figures are applied to Argentina and why the local rich have notable differences with the billionaires that Piketty analyzed: they are not as powerful, they depend on the decisions of the governments in power and they have hidden fortunes, impossible to tax.
In this interview, Heredia also refers to the waves of wealth in Argentine history and the social advantages of the elites.
NEWS: Who are the one percent that concentrates wealth in Argentina?
Mariana Heredia: The concept of the “1%” comes from the work of Thomas Piketty and his team. It describes a minority that concentrates the advantages in the globalized world. Its original points of reference were the central countries. The question I ask myself in my research is how well that export “travels” to the rest of the world. How much of that theoretical and political consideration that these original analyzes raised is still relevant and how much is lost along the way. The 1% of the United States or France are big taxpayers. There is a relationship between “rich” and “taxpayer”. Now, when one transfers this analysis to countries where tax systems are less robust, things get complicated.
NEWS: Can we know how rich those rich are?
Heredia: All of us who investigate topics such as wealth and inequality get tired of saying that the data is very bad. That states lost the ability to keep up with wealth, from the 1970s onwards. The other issue is tax, some tax systems are closer to the world of wealth than others. And a third question is where is the wealth. Argentina and Latin America They are not characterized by having rich people with great fortunes. The Chinese and the Americans are much richer. What characterizes Argentina is that a lot of wealth is evaded and located abroad.
NEWS: In your book, you divide the rich in Argentina into different groups, according to the times in which they became rich.
Heredia: One of the questions that one can ask oneself, in principle, is how much fortune one must have to be rich. Because we are all “the rich” of someone. They can be the millionaires that Forbes records. Or those who paid the contribution to great fortunes, around 10,000 people. That is a first question. Another idea that is associated with being rich is having capital and heritage inherited from generation to generation. There are different waves of enrichment, which have to do with times when large businesses emerge and expand in the country: the agro-export economy of the late 19th and early 20th centuries, the expansion of companies in the Second World War, privatization and the reforms that brought to the market the ’90s and today the world of new technologies and unicorns. In each of those moments there are talented, ambitious or lucky people who manage to take a great leap and accumulate wealth.
NEWS: There are specific names that represent these different waves of wealth. The Braun family, the Bulgheronis and, currently, Marcos Galperin.
Heredia: They are the rich of each era. These three figures are examples of three categories that were used to think about economic power: the oligarchy, the national bourgeoisie, and today’s rich, who are much more diverse. For them, the only certain data is the volume of assets they accumulated.
NEWS: You also use the term “elite” in a broader sense than the strictly economic one.
Heredia: In general, the words that refer to the highest strata have a negative connotation. Like “oligarchy”, or the same word “rich”, “leaders”, “business leaders”. The notion of “elite” appears as the most impartial. And it allows the inclusion of people who hold different types of power: social, public, economic. One of the things that struck me when interviewing senior executives and businessmen is that no one felt part of the elite. Many come from middle-class families and what they have is hard-earned. They also want to get rid of that idea of ”garca” or “corrupt”, with which Argentine society looks at the rich and powerful.
NEWS: What is the relationship of politics with the “rich”?
Heredia: Politics, a fundamental resource distributor in Argentine history, is a permanent concern for the business community. Entrepreneurs are aware that for the survival of their companies, it is important to have political contacts or up-to-date information on how the minister or the next candidate will decide. This complicates public policies, because any task that involves reducing inequality implies a medium- or long-term perspective. We are so used to living in a permanent situation that we do not realize that many of the living conditions of Argentines depend on decisions that last for a long time. Instability generates predatory capitalism, in which we are in a hurry to win everything possible and protect it, instead of thinking about how this can be reinvested and expanded in an economy that is growing, becoming more complex. On the other hand, there are many of the living conditions that Mafalda’s family used to have, the typical family of the 1960s: the car, their own home, a quality school; that today were reduced to a smaller group. Work in a dependency relationship is increasingly minority. Far fewer people are going to have a dignified retirement. To be part of the upper part of the pyramid, it is enough to earn 3 minimum wages. At this time, people operate in increasingly homogeneous neighbourhoods, institutions and networks. They feel that there are them and the rich or they and the poor and they lose sight of the gradation in which they fit. There are people who have a lot of income but cannot own their own home or people who inherited a large home and cannot maintain it. These kinds of things make it difficult for the state to segment rates. Because the economic strata are one thing if one looks at “equity” and another thing if one looks at “income.”
NEWS: Is this difficulty in thinking about the long term at the root of the problem for Argentines?
Heredia: Argentina thinks of the power anchored in the Casa Rosada. Then he lives the differences in a more tense way and makes other very strong spaces of power invisible, which have been reproduced for many years, with more durability than the presidency and which are not subject to similar levels of scrutiny. The governors, the judiciary, autonomous state units that manage large budgets and nobody really knows how that money is used.
NEWS: The elites, as you describe in your book, are a kind of caste that favors each other.
Heredia: To the extent that politics and the economy are managed neither by meritocratic contests nor by stark competition, but rather by friendly ties that open and close doors, whoever has an address book has immense capital. And to the extent that these notebooks are assembled today in closed neighborhoods, in elite schools, in large urban agglomerates, social capital today is a central capital. Because it is what allows you to enter politics and good business in Argentina.
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