Warning: Before reading this, one should play this tango.  It will set the mood.

Argentina is on the verge of economic collapse again...for the umpteenth time.

How does Argentina do it?  I mean, for quite some time, I have been utterly amazed at how Argentina manages to fall on its face.  And it has done so for over a century.

On paper, Argentina should be the richest, most productive nation on the planet.

– 45  million people in a large country, roughly half the size of the continental United States (the lower 48).  It is underpopulated and could safely absorb millions — who would gladly come — if the country were run correctly.

– Argentina has the pampas, the best grain-growing region on the planet.  Unlike America's grain belt, much of the pampas is subtropical with an extended growing season.  Think of Kansas with better weather.

– Argentina is a major exporter of food.  Has been for over a century.  Kept Britain fed during World War II.

– The country has no overseas empire to subsidize.  No wasteful wars.  No trillions sunk in other countries.

– The population is majority European in ancestry: about 50% Spanish, 50% Italian, 17% French, 10% chiefly Christian Arabs, 8% German, with smaller mixes of Ukrainians, English, Irish, a few Welsh, Scandinavians, Greeks, etc.  Even Jews.  Totals exceed 100% as most Argentines are mixed.  There are small Asian and indigenous communities.  While many Argentines have some indigenous ancestry, they identify as white.

There are few blacks in Argentina, due to "genocidal" policies in the 19th century.*  As awful as that was — and it was truly terrible — it left Argentina without the hard racial divide that we see in America.  And the Argentine culture is generally homogenous.

– Argentina is rated as a good democracy by Freedom House.

– The country has freedom of religion.  Ten percent of the population is Protestant, with less than ~1% Jewish, but even that is underrated.  In the Western Hemisphere, only New York City has more Jews than Buenos Aires.  While Islam exists at around 1%, most are not practicing, and the numbers are exaggerated.

– Argentina has oil, gas, and mineral wealth, particularly lithium, which is sought for batteries.

Argentina is home to 9% of the world's total [lithium] reserves — resources whose exploitation has been proven to be viable in technical and economic terms — and these are the third-largest behind Chile and Australia. —DialogChino

Argentina was a country made to succeed.  On paper, Argentina should rule the planet.

A unified people, no major racial divide, monolingual, no large Islamic community.  Considerable natural wealth.  Lots of food.  Great climates.  What could go wrong?

Yet Argentina's record at failure is so astounding that it has earned a separate category in economics.

Simon Kuznets, the winner of the 1971 Nobel Prize in Economics, famously stated there were four types of economies in the world: developed, undeveloped, Japan and Argentina. —Buenos Aires Times

This history defies belief.

It was one of the richest countries in the world before WW1.  After WW2, it was richer than Britain.

At the end of World War II, the Argentine peso was considered one of the most stable currencies in the world alongside the British pound and the US dollar. At that time, Argentina was the wealthiest and most influential country in the region, far ahead of Brazil. Its elegant capital, Buenos Aires, was immortalized as "la reina del plata" ("the queen of the plate") in the lyrics of the great tango singer Carlos Gardel.

An end to the boom was nowhere in sight and Argentina became a magnet for work-hungry refugees, primarily from Italy and Spain, who went to the promised land where jobs and prosperity were said to abound. There were more cars per person in Argentina than in France, more telephone lines than in Japan, and a Buenos Aires subway that raced along under the streets. Even in the 1950s, the average per capita income remained significantly higher than in Germany, whose postwar economy was also booming. —DW.com, Deutsche Welle

Most observers will track the problem back to the profligate spending of Juan Perón in the late '40s and early '50s.  Perón was the Biden of his day, but that cannot explain everything.  His disastrous populist state socialist polices survived under the label of Peronism, but while Peronism is still influential, its power and allure have been checked for decades.

Perón was only half the problem.  The rich elites treated the mass of the population as if they were worthless.  During the Great Depression, the elite had even forced the government into a one-sided Roca-Runciman treaty with Britain, which allowed the British to dump their products into Argentina, destroying Argentina's nascent industrialization.  Why?

Just so the elite could sell beef to Britain.

The population was furious at the sell-out and sought out someone who would stand up for Argentina.  Hence, Peronism.

Argentina had and has a divergent wealth distribution.  The super-rich did not care about the majority of the population who were abysmally poor.  Sort of like today's techno-moguls.  Perón had tried to rectify that that discrepancy, albeit stupidly, by ridiculous welfare state spending.  At first, it helped the masses of the population, until Perón spent Argentina into bankruptcy.  The army, whose officer class drew its ranks from the elite, eventually overthrew him.

And the Argentine cycle of prosperity moving to runaway economic collapse to military intervention back to civilian rule to prosperity to collapse was born.

As a result, Argentines have learned not to trust their government.

[T]he ways people in Argentina navigate the day-to-day economy can sound wild. When you don't think you can trust the bank, the currency, or anybody in charge, things can get pretty weird pretty fast. —VOX

This has gone on for so long that people think it is normal.  Major purchases are made in dollars.  Savings are stored in mattresses, because no one trusts banks — not after 2001.

In 2001, the government restricted access to deposits. The freeze lasted a year; when customers regained access to funds, they discovered their dollar deposits had been converted to pesos, which had depreciated significantly in value. —CNBC

Argentina is what a society looks like when the bond between those in power and the people has totally eroded.  Everyone is out for himself and no one else.  The country may be democratic right now, but so what?  It is immaterial.  Who cares?

The damage was self-inflicted. And no one, not the arrogant elite or the leftist poor, is innocent.  The driving force of civic responsibility has gone.  I think the only reason the Argentines don't have a revolution at this point is that they have come to realize that any change would be pointless.

If it were not for soccer (fútbol), Argentina would have no national spirit at all.  Argentina is proof that even under almost perfect conditions, humans are flawed and can mess things up.

Make no mistake about it.  This is where America is headed...very soon, unless things change.

Image: Qu1m via Flickr, CC BY 2.0.

*Editor's note: This claim to 'genocidal' is disputed, by no less than the Washington Post and its 2005 findings. The five percent of the Argentine population being black claim at the same link is a factual error, with the black population there being significantly lower.