In Joseph Heller’s World War II novel Catch-22, a business-minded mess cook, Milo Minderbinder, flies to Malta to purchase fresh eggs. Milo’s eggs cost him 7 cents each, but he charges the squadrons 5 cents each, inexplicably making a profit in the process. He constructs a “syndicate” throughout the Mediterranean, through which he buys and sells goods, mostly foodstuffs. Somehow, the mess cook holds high positions in government: mayor of Palermo, assistant governor general of Malta, vice-shah of Oran, caliph of Baghdad, imam of Damascus, and sheik of Araby.
The fiscal absurdities of Heller’s novel foreshadowed the postwar paradoxes of global finance. The Take, a stirring documentary by husband and wife team Avi Lewis and Naomi Klein, addresses one of the more ruinous chapters in this absurd history and what happens when people fight back. But the NFB/CBC co-production is not a downer; it’s a bittersweet story of hope that is still without a fairy-tale finish. As this is being written, the Latin American protagonists in the film are still struggling on.
Several years ago, the Argentine economy began a downward spiral from which it has yet to recover. The Forja autoplant, the Zanon ceramics factory and the Brukken garment factory are three companies profiled in the film. All were abandoned, like hundreds of others, by their owners. All three became success stories of sorts as the workers reclaimed them and went back to work without management or unions. The Movement of Recovered Companies, as it’s called, spread across Argentina with the motto “Occupy, Resist, Produce.” The Take puts a human face on the struggle, moving from the lunchroom to the dining room, and profiling the principles and the lesser players. The reluctant, beating heart of resistance in the film is a fellow identified as Freddy from the Forja autoplant, who discovers toward the end of the film that he isn’t just reclaiming his job; he’s part of a historical movement.
The Movement of Recovered Companies isn’t the same as workers “seizing the means of production.” It’s bottom-up, rather than top-down, with each factory working out its own idiosyncratic problems. (Some go with equal pay for all workers, some don’t.) Not surprisingly, the factory owners are opposed to the workers “expropriating” their ghostlike properties and running them as cooperatives. The former workers, for their part, refuse to stand by and see their former workplaces being stripped down for scrap. Armed only with slingshots against the police, the workers stand guard at the plants. Freddy and his colleagues go to court to try to win recognition for their movement, which puts pesos back in the pockets of people otherwise condemned to the street.
We get to see the oily Carlos Menem, the former president who first presided over Argentina’s economic freefall, attempting another stab at re-election (the man with the orange tan compares himself to Jesus Christ in one speech). We witness an unsuccessful attempt to get some shadowy figures from the International Monetary Fund to talk on camera. The bank’s reps are made out to be the villains in the piece by implication, but it’s never quite clear how things became so bad for the factory workers and other Argentines. A lack of historical background leaves the film feeling a little short on context.
Here’s some context for The Take. Writing in the New York Times in 2001, MIT economist Paul Krugman stated that “everyone around the world” regarded the Argentinean debt crisis as having “Washington’s fingerprints all over it.” The Argentine peso was tied to the US dollar back in the early nineties, supposedly as a means to reign in rampant inflation. For a while it worked. Yet at the high point of fiscal implosion, according to York university professor of political science Leo Panitch, the size of Argentina’s debt was 45 to 50 percent relative to GNP, with rates of interest 40 times what a US treasury bill earns.
Over the space of a few ruinous years at the turn of the millennium, Argentina went through leaders like some people go through Bic pens, seeking one capable of writing legislation without ringing up the IMF for ink refills.
Following the lending agencies’ prescriptions - in particular the IMF’s innocuous-sounding “technical memorandum of understanding” in 2000 - Argentina increased taxes on businesses, cut its budget, sliced civil service salaries and reduced pensions - all during a recession. Says Panitch: “Every dollar lent went out in interest payments; every cent went to Wall Street and offshore banks.”
In a completely unsustainable situation with rioting in the streets, and bled dry by billions of dollars flying out of the country to service the debt, the nation defaulted on its payments. Argentina’s economy minister, Jorge Remes Lenicov, then announced the devaluation of the peso, ending a decade-long policy which saw the country’s currency being on the same one-to-one level with the US dollar. To staunch the flow of capital, the government instituted a bank deposit freeze in December of 2001. Unable to recover their money from dead bank machines, millions of Argentineans went postal. And not incidentally, into unemployment and poverty.
The Catch-22 for many nations in debt to international lending agencies is that they soon cannot even afford to pay the interest on the interest. As more debt accrues, further loans are preconditioned on the acceptance of “structural adjustment programs,” which means the reduction or elimination of social programs. The banks also expect the privatization of any remaining national industries, resulting in further decline in governments’ revenue base and freeing up industries to offshore predation. This kind of economic shock therapy is part and parcel of the so-called “Washington consensus.” The borrowing nation soon finds itself in a three-legged race with the IMF and World Bank, collapsing at the finish line. (In a number of Third World countries, IMF has an English language modification of “I’m fired.”)
The Argentine debt crisis meant big bucks for offshore investors. According to The San Francisco Examiner, the free flow of capital opened the gates for “vulture funds,” which bought up the debt to make a killing on higher interest rates. Canada was not entirely an innocent bystander. The Toronto Trust Argentina market fund made a 79 percent return on debts it purchased - 30 times what it would have made holding US treasury bonds.
Selling off Argentina’s public sector for parts meant fire sale prices for offshore investors. In fact, Argentina is a fiscal success story from the point of view of the banks. And this “success” isn’t unique to Argentina; other nations have watched their public sector shrink and their sovereignty evaporate under these lending regimes. Client indebtedness generates big bucks, and there’s money to be made in poverty. This is not just metaphorically true, but technically precise (former World Bank chief economist Joseph Stieglitz said as much in an interview with investigative reporter Greg Palast. There have been some mea culpas and self-questioning within the international lending community in the past few years. How much this will translate into action, only time will tell.) In September of this year, Argentina’s current president, Nestor Kirchner, called IMF head Rodrigo Rato an old-style “plantation owner” for trying to force the nation to swallow free-market reforms as a condition for aid.
Context is important, because otherwise we might make the mistake of seeing Argentina as an isolated case, a worst-case scenario in free market economics, when it’s just one more species in a genus of global disorder - as is British Columbia and the Liberals’ sell-off of public assets.
In one scene in The Take, Freddy inspects his abandoned auto plant. “There used to be pigeons,” he says, looking up into the overhead beams, adding with a rueful smile, “maybe they took those too.” The Take, a powerful film about taking back hope, is well worth seeing. The Argentinean Catch-22 of indentured servitude to the global economy has lessons for viewers everywhere.

Geoff Olson is a Vancouver writer and political cartoonist gefo@telus.net