Extractivism or specificity of capital accumulation? A critique on the extractivist approach regarding the case of Argentina

Introduction

The implementation of neoliberal reforms in Latin American countries in the final decade of the 20th century led to a series of economic and political transformations within these societies. One of the main theoretical approaches in this regard is that, under the command of neoliberal governments along the 1990s, economic growth in the region was based on the strengthening of ‘extractivism’.

As it has been pointed out, this concept lacks a clear definition. However, generally speaking, it refers to a ‘development model’ based on the intensive exploitation of natural resources located in the ground, subsoil or ocean, which are primarily destined to be exported with little to no industrial processes.

Towards the beginning of the following decade, the crisis of neoliberalism gave way to a group of governments that belonged to the so-called ‘left turn’ in Latin America (Svampa 2015a). Far from declining, however, the main features of extractivism intensified during this period, albeit in a different form, characterized as ‘neo-extractivism’.

Within this scenario, the debate surrounding the potentialities and limitations of these processes, as well as their consequences, gained traction among scholars. In this article, we intend to put forth a critical analysis of this approach with the goal of giving an account of its explanatory power regarding the realities of Latin American societies, specifically focusing on the case of Argentina.

We argue that the extractivist approach highlights a key feature of many Latin American economies, including Argentina: their role as suppliers of raw materials for the world market. This allows for the establishment of a continuity between neoliberal and populist governments in the past decades, as natural resources exploitation deepened. Besides, many contradictions and limits regarding the implementation of a neoextractivist model are pointed out. It should also be said that this approach stresses the environmental and social consequences of the intensification of raw materials production.

However, this perspective also presents significant limitations. In particular, while it is stated that extractivism variations aim to strengthen the production of raw materials, the reverse of this development model seems to be the so-called industrialization processes, which aimed to develop the manufacturing sector instead. We offer here a different point of view, in which the recent transformations in Argentine economy cannot simply be explained by the implementation of a series of economic policies attributable to (neo-)extractivism nor any other ‘development model’. On the contrary, we claim that these policies are the concrete form in which capital accumulation takes place. In this regard, we state here that the specificity of the Argentine process of capital accumulation, namely the production of raw materials for the world market, has not changed since its genesis as a national space.

Nevertheless, the basis on which capital valorization is sustained, specifically, the appropriation of a fraction of ground-rent bore in agrarian commodities, has weakened. This led to a contraction of the scale of the manufacturing sector and, therefore, to the appearance that a development model based on industrialization was turn into another one based on natural resources exploitation. Likewise, because capital accumulation in Argentina (as well as in most Latin American countries) is partially sustained in the appropriation of a portion of ground-rent, an increase on the magnitude of this appropriation allows for an expansive economic phase. This expansion, however, needs to take place through the implementation of certain economic policies. Therefore, from our perspective, the shift from extractivism to neo-extractivism can be better explained as part of the shift from neoliberalism to progressive governments. And, in turn, this political shift is analysed here as the concrete form under which the Argentine process of capital accumulation took place.

This article is structured as follows. In the next section, we summarize some of the more noteworthy conceptual features of the extractivist approach, and move on from there to the particularities of the Argentine case. After that, we point out the conceptual limitations of this approach, naming some crucial aspects that are overlooked. In section ‘The role of Latin American countries in the unity of capital accumulation’, we offer an alternative approach in regard to the specific way in which capital accumulation takes place in Argentina, based on the Critique of Political Economy put forward by Marx in Capital, and taking the global unity of capital accumulation as a starting point. Upon this basis, in section ‘(Neo-)extractivism or a specific form of capital accumulation? Argentina in the past few decades’ we re-engage the main claims presented by the extractivist approach, intending to grasp its accuracy to analyse the recent dynamics of Argentine society.

The arguments presented here seek to contribute to the construction of a new perspective on this subject; as Webber (2015) points out, there have been relatively few contributions to the debate surrounding (neo-)extractivism made from a Marxist standpoint.

(Neo-)extractivism as a development model

In addition to strengthening the exploitation of natural resources, the difference between ‘classic’ extractivism (set in motion by neoliberal governments), and neo-extractivism (implemented by ‘left turn’ governments) is related to the role of the state. One of the main characteristics of classic extractivism is that resource exploitation is left in the hands of private capitals (mostly foreign; see, for instance, Seoane 2012), who manage to appropriate a sizeable profit share, while the state’s role is limited to guaranteeing this model’s reproduction. Neo-extractivism, however, is defined by a more active state involvement in these productive areas, among which stand out the nationalization of companies, market regulation, the revision of existing contracts and, especially, an increase in the amount of the revenue obtained through taxation. In short, as Gudynas (2010: 8) states, ‘the state is much more active in capturing surpluses’ from extractive productions .

This leads to a second difference in neo-extractivism: the use of part of this social wealth as a means to reducing poverty and boosting economic development. As Burchardt and Dietz (2014) point out, the poverty rate not only decreased during the 2010s to the lowest it had ever been in the previous 20 years, but the middle social strata also grew. Upon this basis, it has been suggested that, even though the development model was not substantially altered, these governments sought to compensate for some of its negative aspects, which in turn allowed them to increase their political legitimacy (Gudynas 2016). This happened to such an extent that the consolidation of neo-extractivism appeared to leave the neoliberal Washington Consensus behind, only to give way to a new ‘Commodities Consensus’ (Svampa, 2015b).

In short, and as several other authors have suggested, extractivism can be characterized as a specific development model built upon the predominance of economic activities based on the exploitation of natural resources (Acosta 2013; Brand et al. 2016; Burchardt & Dietz 2014; Svampa 2015b; Peters 2017). ¹ This model presents two variants: while classic extractivism can be characterized as lacking redistribution policies and is linked to neoliberal governments, neo-extractivism is related to the governments of the left turn that seek to boost development through the capture and redistribution of the appropriated wealth (Acosta 2013; Gudynas 2010; Svampa 2015b; Veltmeyer 2013). ²

Their limits and consequences, which we sum up here, have also been highlighted by several scholars. ³ Especially, issues like pollution and environmental degradation produced by the exploitation of natural resources, in addition to the rapidly approaching moment of their depletion, have been submitted as inherent limits to (neo-)extractivism deepening (Acosta 2013). At the same time, and directly related to this, social conflicts are also exacerbated, not only due to the environmental contamination of large populated areas, but also because the displacement of communities living on exploitable lands. ⁴ This becomes a contradiction for neo-extractivist governments, who usually ignore or reject demands made by those communities, and even resort to repression (Gudynas 2016; Webber 2015). Some authors have also posited the existence of an alliance between (neo-)extractivist governments and foreign capital, which gave birth to an ‘imperialist extractivism’ (Veltmeyer 2013).

It was also pointed out the limited scope of the economic success of this development model, even in regard to neo-extractivism. Specifically, the way in which economic expansion took place during this period came nowhere near to reversing the negative aspects of Latin American economies. In fact, despite redirecting a portion of the appropriated wealth to the most impoverished fractions of society, salary inequality was not diminished. Besides, the high rate of informal employment in the region has not been reduced. Finally, even though taxation applied to the production of these extractive branches has grown, other taxes, such as value-added tax (known as IVA), which affect especially the fractions of the population living in poverty, grew at an even higher rate. Therefore, not only is the regressive nature of the fiscal structure still in place, but it is also worsened (Burchardt & Dietz 2014).

Hence, the neo-extractivism capacity to overcome the structural problems that Latin American economies have been dragging along has also been strongly questioned. First of all, and despite the attempts of using the appropriated social wealth to deepen industrialization through the implementation of neo-developmental policies, it has been stated that this only managed to intensify economic reprimarization. But this is not an oddity, given that the implementation of the said policies is precisely based upon the deepening of a neo-extractivist model. On the contrary, this model’s foundation is intrinsically weak: despite sustaining a relatively high level for over a decade, agrarian commodities prices tend to fluctuate sharply (Burchardt & Peters 2017). Finally, it has been highlighted that the expansion of currency flow produced by the increase in exports of natural resources contributed to an appreciation of the exchange rate, which in turn became a hurdle for the expansion of the industrial sector, decreasing its competitiveness (Acosta 2013; Burchardt & Peters 2017).

It should also be pointed out that the extension of the (neo-)extractivist development model throughout Latin America has been subject of recent debates. In fact, the difficulty in defining (neo-)extractivism has given the concept a certain ubiquitous nature, since most countries of the region could be included within this notion.

In contrast with this unrestricted use, Burchardt and Dietz (2014) analysed a series of indicators related to income produced by extractive activities, while also stating that in order to establish the existence of a neo-extractivist development model, there should be a correlation between these indicators and those referred to poverty, unemployment and social inequalities. In this way, and based on increases in the exportation of raw materials, the growing percentage of these commodities with respect to the total exported, and their importance when weighed against the total gross domestic product (GDP), they conclude that there is in fact a strong increase in the exploitation of natural resources in the region during the first decade of the 21st century. And upon this basis, they attempt to put together a classification of Latin American countries. A first tier, defined by a high participation of extractive activities, would include countries of the Andean region: Ecuador and Venezuela, dominated by oil extraction; Perú and Chile, based strongly on mining; and Bolivia, where gas exploitation is its main feature. A second tier includes countries with more diversified economic structures, like Brazil and Argentina, where the extractive sector is gaining in importance. Finally, México and Central America remain as regions dominated by a different dynamic, where extractive activities play a minor role, although they are moving in the same direction.

Let us now take a look at the case of Argentina in a little more detail.

The role of Latin American countries in the unity of capital accumulation

There is a key aspect that underlies most extractivist approaches to Latin America: the idea that national processes of capital accumulation are mutually independent units, and therefore hold the same developing potencies. Hence, the difference in their economic development would lie in the implementation of different economic policies.

In the specific case of Argentina, one of the most frequent characterizations of this type claims that a particular development model, namely ‘import substitution industrialization’ (ISI), was implemented in the 1940s. This model, primarily based on the expansion of an industrial process aimed at replacing imports (which was first led by capitals of national origin and then by foreign ones), was interrupted by the military dictatorship that came into power in 1976. According to this analysis, the dictatorship reversed these policies: part of the industrial bloc was terminated, and the economic development rested on the valorization of financial capital and the reprimarization of the economy. ⁷ It has been stated that it was together with these transformations that the extractivist model was established (Teubal & Palmisano 2015).

Other authors (including some that offer an analysis from the extractivist approach) highlight that the common characteristic of Latin American countries throughout the history of capitalism is the production of raw materials for the global market, a description we think is accurate. Let us take it as a starting point for this analysis, which we will base on the general determinations of capitalism presented by Marx (1992 [1867]) in Capital.

In this form of organizing the human-life process, production is carried out by mutually independent individuals; that is, individuals who lack direct social relations. Hence, their social relation is borne in the product of their labour, namely commodities, which relate themselves as values and, therefore, indirectly bring into relation to their owners through exchange. The reproduction of human life is therefore subject to the production of value.

Capital is the development of this indirect form by which the unity of social labour is established: insofar as capital itself becomes the concrete immediate subject of social production, the reproduction of human life can only take place in the form of capital accumulation, that is, the production of surplus value. This means that in capitalist society, the process of human metabolism is automatically performed, borne in the actions of the individuals (Marx 1992 [1867]).

This historical form of organizing the process of social metabolism can only take place on a universal basis: as Marx and Engels state, production acquires for the first time an universal character under capitalism (Marx and Engels, 1974 (1846): 56). The capitalist process of social production, however, takes the form of multiple national processes of accumulation, which become fragments of total social production, and are linked through the world market (Caligaris 2016; Fitzsimons & Starosta 2018; Iñigo Carrera 2013).

Nevertheless, it is clear that these national spaces of accumulation do not play equal roles in the process of developing the productive forces of social labour, a claim that could only be made by stating that capitalism is a national process in content and global in form. On the contrary, as we stated before, the process of social production entails a global content and a national form. This allows us to consider the specificity of capital accumulation in different national spaces as concrete ways in which the development of social production takes place as a global unity, taking into account at the same time that global capital accumulation takes on uneven national forms (Fitzsimons & Starosta 2018; Iñigo Carrera 2013).

Although it is currently much more noticeable, this differentiation exists since the origins of capitalism, where a small group of countries operated on a scale that allowed them to lead the development of productive forces. As a way of strengthening their individual processes of relative surplus-value production, these national spaces of capital accumulation, which we can generically call ‘classic countries’, faced the need to obtain raw materials at cheaper prices. ⁸ On the contrary, exceptional natural conditions that allow for greater productivity of agrarian and mining labour (as well as other productions in the primary sector), which allow for the cheapening of the means of subsistence and, as a consequence, of the value of labour-power, prevail in many territories located in Latin America. Upon this basis, and right from the very beginning, Latin American countries acquired a specific character: the supply of these commodities (Caligaris 2016; Fitzsimons & Starosta, 2018; Iñigo Carrera, 1998, 2007, 2013). ⁹

However, agrarian and mining production presents a distinctive feature: labour productivity is subject to natural conditions which capital is unable to control. The commercial price of these commodities is therefore set by the individual price of production corresponding to the worst land, that is, the one where natural conditions determine the worst productivity of labour. This creates an extraordinary profit for capital located in better lands, which is in turn appropriated by landlords as differential ground-rent (Marx 1981 [1894]). ¹⁰ The export of these commodities to the world market generates a continuous flow of differential ground-rent, which is bore in these commodities, towards Latin American economies. ¹¹

Hence, as Fitzsimons and Starosta (2018) point out, this form of subsumption of Latin American territories into the global circuits of capital accumulation is ridden with a contradiction. On one hand, the global capital enhances its valorization by reducing the value of labour power; on the other, this is partly offset by the loss of surplus value, which flows to Latin American economies in the form of ground-rent.

The loss of this surplus value weakens the capital accumulation processes in the classic countries. But capitals that operate there have been capable, in different ways, of retrieving portions of ground-rent they had previously lost. The existence of a process of partial recirculation of differential rent towards the classic countries has also been, generally speaking, a characteristic of Latin American economies (Caligaris 2016; Fitzsimons & Starosta, 2018; Iñigo Carrera, 1998, 2007, 2013). As we shall see later, Argentina is one of the most paradigmatic cases of this dynamic.

From this perspective, the characterization of Latin American economies as extractive ones faces a problem: their role as raw materials producers for the global market is far from being a recent feature, as it is acknowledged by several scholars mentioned here (Acosta 2013; Brand et al. 2016; Burchardt & Dietz 2014). Therefore, the novelty in the extractivist approach is reduced to the increase in the production scales (Svampa, 2015b), the extraction of raw materials at a higher rate than their natural renewal one, including the case of renewable resources (Acosta 2013), or the technological revolution that allowed the intensification of this productions (Seoane 2012), to give some examples. In sum, extractivism presents transformations regarding the form of raw materials production as if they were changes in the content of accumulation. Besides, this approach tends to focus almost exclusively in the dynamics of the primary sector, overlooking the character of accumulation in the industrial sector and the link between both.

Let us now move on to an alternate characterization of the specificity of capital accumulation in Argentina, which is based on the analysis originally presented by Juan Iñigo Carrera, (1998, 2006, 2007) and later developed by many scholars (see, among many others, Cazón et al. 2016; Grinberg & Starosta 2015; Fitzsimons & Guevara 2018; and Fitzsimons & Starosta 2018). We will later critically engage, from this perspective, with some of the most significant claims made from the extractivist approach.

Capital accumulation in Argentina

One of the most current noteworthy characteristics of the Argentine economy is the existence of a large number of small national industrial capitals that operate alongside some of the most concentrated capitals of the world. These, however, have one particularity: while in other countries they operate on a scale that allows them to compete in the world market (i.e. on a normal scale), in Argentina they only do it within the tiny size of the internal market and, if they export, they generally do it due to the existence of some type of compensatory regime, such as production subsidies.

This aspect of the Argentine economy consolidated towards the end of the 1950s, when a large number of foreign capitals entered the country. ¹² Despite being several times larger than the small national capitals, the fact that these restricted fragments of capital only produce for the domestic market strongly limits their scale, which in turn prevents them from actively participating in the development of productive forces of social labour. These capitals operate locally by using means of production that are obsolete from the standpoint of global accumulation (and therefore, they can no longer be used to sustain production at the normal scale), but are deployed there as if they were at the state-of-the-art of technical development (something they could only be by setting aside the global character of capital accumulation and comparing them exclusively to the small national capitals). However, this process appeared to entail a different content: the expansion of an industrial process without inherent limits, that is, the ISI.

The restricted scale with which these fragments of normal capitals operate determines that the labour productivity they set into motion is also relatively low, and, accordingly, their rate of profit is lower than normal. However, its very presence indicates that they somehow appropriate at least the normal profit. Let us now briefly go over the specific valorization form that characterizes them.

In the first place, the recovery of means of production that, from the point of view of global accumulation are considered scraps, is, in itself, a source of extraordinary valorization: the impossibility of using them at the normal scale (i.e. that required to compete in the world market) reduces their value to nothing. On the contrary, tax elusion and evasion (ever-present in Argentina) are another source of extraordinary valorization. Besides, these capitals are capable of appropriating a portion of the profit small capitals lose in the circulation process. Finally, the appropriation of a fraction of the social wealth that flows to the country in the form of ground-rent through the exportation of agrarian commodities is also an important source of compensation. This final aspect is particularly relevant for the analysis of the national process of capital accumulation and its political forms.

As the general political representative of capitals that operate within its territory, the Argentine national state is in charge of implementing the various economic mechanisms that result in the appropriation of ground rent by industrial capitals. Among them, and due to their size and recurrence throughout history, taxes on exportation of agrarian commodities and currency overvaluation stand out. The former affects a fraction of the prices of agrarian commodities constituted by ground-rent, which then follows its route towards its final recipients through different policies (like the payment of subsidies, public loans at a negative real interest rate, the generation of the capacity to purchase the commodities produced by these capitals, etc.). The latter works indirectly, by withholding a fraction of ground-rent in exchange mediation; industrial capitals are later able to appropriate it by importing means of production at a cheaper price. Besides, both mechanisms also cheapen the value of the labour-power, without affecting the material conditions under which the workers reproduce their lives. They do so because competition between agrarian capitals forces them to sell their commodities in the internal market also beneath its production price, cheapening the means that, either directly or indirectly, are required for the production of the commodities consumed by workers.

In the next section, we move on to the current phase of capital accumulation in Argentina with the goal of critically engaging with the main points of the extractivist perspective. Before doing that, a general issue can be pointed out: while it is usually acknowledged from this perspective that the production of raw materials for the world market is a historic feature of Argentine economy, the fact that capital valorization relies normally on the appropriation of ground-rent that flows precisely through the export of agrarian commodities is overlooked. Although export taxes are sometimes acknowledged as a means to ‘redistribute economic surplus’, economic policies such as overvaluation are absent from the analysis. Hence, while the extractivist approach focuses on raw material production, the historic character of capital accumulation in the industrial sector goes unnoticed. As a consequence, the specificity of the Argentine process of capital accumulation is reduced to the intensification of the exploitation of natural resources.

The role played by external public debt is also usually overlooked in the extractivist approach. As we shall see in the next section, the magnitude of appropriable ground-rent turned insufficient to sustain the previously reached scale of capital accumulation after the 1970s. In this scenario, industrial capital began to increase its reliance on a second source (and even more unstable) of social wealth: external credit. Therefore, the magnitude of the external debt usually increases in the most critical moments of capital accumulation, and decreases later, when economy grows again sustained by an increase in the inflow of ground-rent and part of the debt is paid.

The dynamics of ground rent appropriation can be observed in the following graphic, which covers the period 1990–2007. As we shall see later in more detail, the inflow of ground rent contracted towards the end of the 1990s, and went through a marked increase in the 2000s. Likewise, the fraction kept by landlords increased in the first years of the 2000s, only to contract again immediately. The appropriated fraction kept rising significantly after 2007, when currency overvaluation, absent during the first years of the decade, strongly reappeared.

OPEN IN VIEWER

Source: Iñigo Carrera (2007)

(Neo-)extractivism or a specific form of capital accumulation? Argentina in the past few decades

Towards the end of the 1970s, capital accumulation in Argentina had already reached a critical scale in regard to its specific character. The gap between the labour productivity of capitals that operate locally and of those that do it abroad at a normal scale continued to grow, therefore requiring an increase in the appropriated ground-rent in order to sustain normal valorization. However, the size of appropriable ground-rent had already become insufficient to sustain the scale of accumulation. Thus, this scale needed to contract. This process took a particular form: some appropriation mechanisms began to be dismantled, or limited in their scope. At the same time, the sale of labour power below its value became another permanent form of compensation for industrial capital (Iñigo Carrera, 1998, 2007).

The economic policies that shaped this phase experienced a notable growth along the 1990s, under the political form of neoliberalism. While many capitals applied to natural resource exploitation (especially, mining and energy, as we have previously seen), privatized firms (mainly in the banking and services industries), and a much smaller group of industrial capitals became the beneficiaries of the specificity of capital accumulation, another portion of the industrial sector was terminated, as the economic policies that had sustained the ISI (such as the combination of currency overvaluation and the protection of domestic markets, loans at negative real interest rates, and fiscal credits, among others) became more limited and selective. Beyond keeping in place some previously set appropriation mechanisms, the main form of rent appropriation throughout this period was currency overvaluation, which hovered around 100% (Grinberg & Starosta 2015).

This sheds some light regarding one of the main claims of the extractivist approach: the fact that, during the 1990s, production in the extractive industries expanded at a faster pace than that at the manufacturing sector. But this does not imply that a new development model, namely extractivism, was implemented. From our perspective, the content of the process of capital accumulation remained the same; it only occurred that its foundations turned even more weak than before, and were no longer able to sustain the scale previously reached.

This leads to an issue that has also been overlooked from the extractivist approach. In line with this latter viewpoint, the state’s role during the 1990s is reduced to guaranteeing the model’s reproduction, without ever intervening in the redirection of the flow of this rent. However, the national state needs to actively intervene to sustain currency overvaluation. In order to do this, it had to constantly renew its stock of foreign currency, which was mainly accomplished through the privatization of public capitals and the expansion of public external debt.

In this regard, currency overvaluation, with the resulting decrease in the competitiveness of the industrial sector, is not a perverse consequence of the intensification of primary sector production, as the extractivist approach claims. On the contrary, it is, first and foremost, one of the mechanisms upon which the extraordinary valorization of industrial capitals that operate locally is built, through the importation of cheapened means of production. But this also restricts the scale of capital accumulation to the size of the internal market, because the export of commodities which are not bearers of ground-rent would imply that capitals only appropriate a fraction of the total price of production. Hence, unless the commercial price of the commodities includes a portion of ground-rent big enough to absorb overvaluation, those cannot be exported without affecting the normal valorization capacity of industrial capitals. The absence of a characterization of the industrial sector by extractivist approaches also prevents them from adequately grasping this issue.

Despite these differences, however, the analysis presented here shares a general coincidence with that approach: the fact that one of the main characteristics of Latin American countries, including Argentina, has been – and continues to be – the production of raw materials for the world market. But this brings up the question of why the extractivist approach emerged and settled only in recent years. Let us now move forward on this issue.

If the restricted scale of industrial capitals that started operating in Argentina in the 1960s were left aside, and accumulation processes were considered to be national in regard to their content, it could appear that the specificity of the Argentine economy does not go beyond a strong cyclical character and a growing need for foreign currency, so that these capitals could open their valorization cycle by purchasing means of production in the world market. From such point of view, the nature of the Argentine process of capital accumulation was no other than an abstract import substitution process, which expansion was restricted by recurring external crises attributed to the insufficient foreign currency generated by primary sector exportations.

However, in the mid-1970s, such process crashed against its very limits, resulting in the weakening of the industrial sector. Besides, primary production branches other than agriculture gained strength in the 1990s. This exposed once again the true content of accumulation, as the economy seemed to enter a phase in which it started to revolve simply around the production of raw materials for the world market. Within this scenario, the development of the specificity of accumulation in Argentina (as well as in many other Latin American countries) came to be characterized as ‘extractivist’.

But in the 2000s, the course of this capital accumulation in Argentina seemed to shift one more time. After the collapse of the neoliberal regime in 2001, and the profound crisis that followed, a phase of swift economic expansion took place starting in 2003. This growth took on the political form of a government that presented itself as the antithesis of neoliberalism. Despite this expansion, however – and as the authors that characterize this period as a new phase of extractivism point out – a large number of the negative indicators displayed by the Argentine economy in the past few decades were not reversed; in some cases, they even worsened. Even some of the scholars that consider the emergence of a reindustrialization process during this period as a central feature of the economy underline how limited it was, when compared to the ISI that took place half a century ago. ¹³ This difference, however, allowed this last period to be characterized as a new phase of extractivism, given that the deepening of natural resources exploitation continued under a government with an opposed political trend, which appeared to be capable of capturing a portion of ground-rent and redirecting it towards economic development.

In line with analyses conducted from the extractivist approach, we believe that one of the most significant developments of this phase was the rise in the prices of raw materials in the world market. Let us now use this as a starting point for the analysis.

Following the crisis that took place at the end of the previous decade, which led to a strong devaluation in 2001, the economy reentered one of its cyclical expansion phases, initially sustained by the salary contraction. This was followed by a new expansion of the FDI in the primary sector (Frechero 2013b; Seoane 2012). At the same time, the prices of agrarian commodities (especially soybeans) rose in the world market, leading to an expansion in the inflow of ground-rent. ¹⁴ In tune with increases in prices and currency undervaluation, investments in primary production branches continued to grow, as that made possible the investment of capitals that put into action less productive labour but were still capable of obtaining an individual production price lower enough to compete in the world market.

With an undervalued currency, however, channelling rent towards industrial capitals could only take place through economic policies in which state intervention was again immediately visible. In this way, together with the reinstatement of tax exports, mechanisms like maximum prices for agrarian commodities, subsidized public services, credits at negative real interest rates and a strong expansion of public spending, especially in public infrastructure building and social assistance, reappeared. Because of such characteristics, this process could only take place under a ‘progressive’, ‘center left’ or ‘populist’ government (Caligaris 2016; Grinberg & Starosta 2015; Iñigo Carrera 2006; Kornblihtt et al. 2016).

While from the extractivist approach, this process could only be understood as a new phase of the same phenomenon, from our perspective the content of this phase cannot be reduced to the coming of a government with the political will to take advantage of the growth of rent flow in order to capture a portion to boost economic development, that is, a government that implemented the neo-extractivist model. It is exactly the other way around: the progressive nature of the Kirchnerist governments was determined by the sustained affluence of an enlarged portion of ground-rent which the state, as the general political representative of total social capital within the national territory, diverted towards the most concentrated capitals of the industrial sector. ¹⁵

This explains, in the first place, why export taxes on agrarian commodities kept rising, insofar as the price of these commodities also increased (as also did later the magnitude of overvaluation, which reappeared around 2007). ¹⁶ And it also explains the path followed by the appropriated social wealth: the expansion of public infrastructure, directly benefitting capitals in this branch; an increase in subsidies destined to public services capitals, which not only sustained their valorization, but also meant an indirect salary raise, as they cheapened the value of the labour power; expansion of spending on public assistance policies, which allows a fraction of the surplus population to partially compensate for the sale of labour power below its value and prevents them from degrading to the point of completely losing their productive attributes, therefore, operating as a subsidy for the capitals that can pay salaries that would not even allow this degraded reproduction. In sum, these policies are the form by which the phase of economic growth, sustained by the increase in the rent flow appropriated by industrial capitals, takes place. And as this growth can only take place upon the basis of a relative recovery of salary and employment levels, as well as the subsequent drop in poverty levels, these policies cannot be explained as efforts to counter the negative aspects of neo-extractivism implementation, nor as mechanisms to obtain political legitimacy (even though they have this latter effect).

As we have already pointed out, the (neo-)extractivist approach highlights that this expansion process presents numerous contradictions, which are grasped as limitations on this development model. From our point of view, however, these limits are set by the very historic nature of capital accumulation in Argentina. Despite the fact that an unprecedented amount of rent was poured into the Argentinean economy, the accumulation process was no longer capable of even accommodating a new expansion phase comparable to the prior ISI. The growing divergence between the scale of required production needed to obtain the labour productivity that determines the world market production prices and the one that can be set in motion in Argentina’s reduced domestic market increased the productive gap, up to the point that it became so large that not even the inflow of this enormous mass of rent was able to compensate.

Because of this, average salary growth was barely enough to compensate for the loss suffered towards the end of the previous decade, whereas the salary gap continued to increase due to factors like rising unregistered employment; on the other hand, the expansion of social welfare benefits only barely managed to sustain a portion of the growing surplus population. The regressive nature of the taxation structure is also determined by the specific nature of accumulation. Generally speaking, taxes necessarily affect surplus value produced by capitals, and are destined to the maintenance of state structure. However, the evasion of taxes specifically aimed at capitals’ profit has historically been over 50% in Argentina, which can only be considered as another form of sustaining their valorization for capitals. Because of all this, the specific form capital accumulation takes in Argentina necessarily turns its taxation system as a sieve (Iñigo Carrera 2007). ¹⁷ Taxes on consumption, on the contrary, are normally collected. Therefore, the increase in the salary gap, the growing of unregistered employment, the limits of the social assistance programmes, and the regressive nature of the taxation structure, do not constitute problems or limits of a neo-extractivist model, but concrete forms through which the specificity of capital accumulation in Argentina takes place.

Finally, we have also regarded the issue of environmental destruction and its effects on numerous local communities as one of the main characterizations of Latin American economies pointed out by the extractivist approach. It is evident, indeed, that these aspects are much more acute and recurring in Latin American countries than in regions of the world where these productions are subjected to stricter regulations (which are also more strictly followed). ¹⁸

In their zealous pursuit of producing surplus value, capitalists (or their representatives) are not held back by the environmental consequences that result from the valorization of their individual capitals: if they did, not only would their profit rate drop, but also they would be defeated by the competence of less scrupulous capitalists. However, growing environmental destruction is a threat to the valorization of total social capital. Therefore, insofar as it is the concrete immediate subject of social production, capital needs to regulate these production processes. ¹⁹

The advancement of this process is borne in the political action of the working class, which confronts the political representatives of capital accumulation, namely national states, by demanding regulations that allow them to reproduce their labour power under normal conditions. It is therefore a question of determining whether this normality, which differs regarding the various fragments that make up the working class, includes living in a not (so) degraded environment. In other words, the power of this action is linked to the character of the national processes of accumulation that reproduce the workers who carry it out: where capital realizes its historical reason of existence (i.e. developing the productive forces of social labour through the production of relative surplus value), for which it needs to expand the productive attributes of a significant fraction of workers, such regulations tend to be imposed with greater force (although not necessarily in an uniform way along the national territory), allowing those workers to reproduce their labour power under conditions that include a certain degree of environmental preservation. As this is not the content of Latin American national processes of capital accumulation, this fraction of the global working class bears less power to impose these conditions. ²⁰

Conclusion: How useful is the (neo-)extractivism approach to analyse Latin America?

In this article, we sought to review the potentiality of the extractivist approach to analyse the political and economic realities of Latin American countries, focusing on the case of Argentina. Let us go over some of the conclusions.

In the first place, we pointed out that this perspective highlights the role the countries of the region have played over the past few decades as suppliers of raw materials for the world market. By acknowledging this, it is able to establish a continuity between the phases of neoliberal and populist governments in the past decades, in which natural resources exploitation deepened. Also, it lays bare the contradictions of the latter phase, concluding that the (neo-)extractivist model carries an intrinsic boundary.

From our point of view, however, these processes cannot simply be explained by the implementation of a series of economic policies attributable to (neo-)extractivism, nor any other ‘development model’. On the contrary, these policies are the concrete form in which capital accumulation takes place. From this perspective, we reexamined some of the most significant claims of the extractivist approach.

In particular, we state that Argentina’s specific role in the unity of global accumulation has not changed since its genesis as a national space, which leads to the question of why the (neo-)extractivist perspective has emerged in recent years. And we find the answer, precisely, in the historical development of this specificity: the impossibility of sustaining the scale of accumulation due to the insufficiency of ground-rent resulted in the termination of a portion of industrial capitals, while natural resource exploitation also intensified. But this only points out Argentina’s historical role as a supplier of raw materials to the world market, a task that appeared to be left behind with the development of the ISI.

By contrast, the analysis of the specific nature of the role that Argentina plays in capital accumulation at global scale has shed light on some of the deficiencies of the extractivist approach. In the first place, the valorization of industrial capitals through the appropriation of ground-rent is not limited to some periods, but is in fact one of the main foundations on which accumulation has historically rested on. This issue tends to be overlooked in analyses of the so-called neoliberal phase of extractivism, where appropriation was carried out mainly through currency overvaluation.

The same thing can be said regarding the following period. Generally speaking, we agree with authors who state that the rising prices of raw materials is one of the main features of this phase, while emphasizing that this enables the flow of an extraordinary mass of ground-rent. However, the appropriation of a part of this social wealth by industrial capitals (directly or mediated through the consumption of labour-power) is far from being a novelty: not only in relation to the prior phase (where appropriation took on the more discrete form of overvaluation) but also in regard to prior periods of the country’s history: when the amount of appropriable rent was enough to boost a sustained expansion – although cyclical – of the industrial sector, the main characteristic of accumulation in Argentina was said to be the deepening of an ISI, which appears to be a development model on the opposite end of extractivism.

Although the extractivism approach manages to account for the fact that the role of the Argentine economy in the world market is to provide raw materials, the specificity of its process of capital accumulation is not limited to this: as we have seen, ground-rent bore in the reported agrarian commodities continuously flows to the national economy, a fraction of which is recovered mainly by fragments of foreign normal capitals through different mechanisms that are set in motion by the national state, which gives the Argentine process of capital accumulation a specific nature. It is this very specificity, after colliding with its own limitations, which gave the Argentine economy the characteristics it had in the past few decades. Therefore, the limits pointed out from the extractivist approach are not inherent to a certain development model, namely (neo-)extractivism, but they spring from the role Argentina plays in the global unity of capital accumulation.

It is true, however, that extractivism highlights not only these limits and contradictions, but also the environmental consequences regarding the concrete form in which the productive processes of the primary sector are set in motion, as well as the struggles unleashed by the intensification of this productions.

Finally, the more far-reaching question remains as to what concrete form should be given to the political action that aims to overcome the reproduction of this specific form of accumulation. From our point of view, in the first place, this question must point to whatever powers this accumulation process holds in order to transform such specificity, and, if such powers exist, what concrete political form should this transformation take. Taking into account the blatant impossibility the Argentine economy has shown to even reproduce previous conditions of accumulation, and the consequences that this entails for the sellers of labour-power (one of those certainly being the incessant growth of environmental degradation), the need to find an answer to this question becomes urgent.