In these World Cup days, it is easy to see a U.S. Supreme Court's decision as a decisive financiers' goal scored against Argentina, but the game isn't over. The court let stand a lower court judgment requiring Argentina to pay $1.3 billion to creditors means different things to different people, but it is actually the human writ small.
For Argentina, and Argentines I know, it's a disaster that causes anxiety. Among Americans, most of whom are completely unaware of the news, those who are up on the events are scratching their heads: what are Argentines complaining about, didn't they borrow the money?
The International Monetary Fund has taken a position of concern about the possible repercussions well beyond the republic of the Southern Cone.
It does not take great theological acumen to realize that from the point of view of the Argentine pope this is an injustice. And it is. The Argentina bad debt was wrongly acquired. Worse, those who will suffer will be children without a meal at school, their teachers who may not get paid and otherwise needy people who never got the least benefit from the loans.
The debt doesn't just go back to the year in which the Argentine peso rapidly lost two thirds of its value overnight (when Argentines say "2001" they mean this event, not September 11). It goes back much earlier. There were the abysmal governments by military officers who borrowed to buy useless weapons (and certainly to fund their retirements) and at least one subsequent civil government (that of Carlos Menem), which essentially carried out a monetary scam, peso parity with the dollar.
To complicate matters, this is not fair in even for those of us who live in the wealthy First World. These investment pools are not just for millionaires (I mean, billionaires), men who fit the image of the fat Monopoly man with a top hat and cigar. These funds are freely sold to the common middle-class citizen who has some put away a little something for old age or medical expenses. This man or woman also had nothing to do with Argentine governments' waste.
Moreover, the Supreme Court didn't actually rule against Argentina. Rather, the justices simply declined to hear the case, without explanation as is common in most such petitions. And, actually, I don't see a legal issue in this matter. The bonds were developed and sold in accordance with current laws and their constitutionality is not in question, which is what the high court judges.
In Argentine eyes, the move will be seen as part of U.S. foreign policy, but Supreme Court justices cannot be removed unless they are charged with serious wrongdoing and their decisions can not be modified or President Obama, or Congress.
So it's not an American "trick." Nor a goal by a foreign soccer team. It is undoubtedly the result of a sad story, one very well known in Latin America. National leaders have been very bad, there have been too many dictators and even democracies have been undemocratic.
As to consequences, there are few countries that historically have been able to escape their debts as tried by Argentina under Presidents Nestor and Cristina Kirchner. Greece is trying today (using the Argentine "model," which some say is merely a bad example).
When someone does not pay a debt, he is considered bad debtor and the cost of borrowing goes up for the debtor because the risk of loss is higher. All loans follow this pattern going back to the Church's abandonment of its traditional condemnation of usury, a fact that coincided with the rise of Italian banking in the Renaissance (and ecclesiastical money needs for monumental works such as St. Peter's Basilica in Rome).
The great historical exception was Russia. In 1917, Lenin refused repay foreign debt (also internal debt, but that's another story), arguing that the debt belonged to tsars and not the people. He got as a response a military intervention by Great Britain, United States and other creditor countries from 1918 to 1920.
The Soviet Union won milityarily, but the nation was an economic pariah until the fall of the Communist Party. The ruble ceased to be convertible currency and Russia could not buy anything on the world market without paying for it with hard currency obtained through exports. However, the USSR had vast internal resources and made use of them to survive.
Partly in preparation for the eventuality of such an isolation the Kirchner governments have restricted and controlled trade and monetary exchange, a move that may have seemed crazy to anyone who did not consider the default problem. Like Russia, Argentina is one of the few countries in the world that is physically self-sufficient: it has enough food to feed all of Europe, let alone merely 40 million Argentines, plus it has oil, minerals and untold natural raw materials and industries.
It's not entirely insane to think that, with doors closed to external funding, Argentina must find a way to survive on its own.
But of course, for the IMF, which bears the responsibility the debt of all, this situation is a potential global disaster. The international economy depends on a degree of cooperation between all people, rich and poor, creditors and debtors.
Indeed, human beings are not independent and autonomous. We are born thanks to the love of our parents (in the best cases) or instinct, but not on our own. We survive at least the first 10 years thanks to someone who feeds, dresses and shelters us.
Human societies bear a resemblance to individuals. We all depend on each other. The owner of factory depends on workers and vice versa. Sellers on buyers. Professionals on those who don't have their specialized knowledge, and vice versa.
Societies also need one another. Think of Colombian Coffee, Brazilian bananas, Argentine beef, Sri Lanka's tea, Chilean copper and Venezuelan oil. Consider the cultural diversity that enriches us all: what would we read without Tolstoy, Mafoud, Cortázar or Naipaul? What would we listen to without Beethoven or Menuchin?
In short, this is one of those times when you have to wear the uniform of the human team. In fact, I think that's what everyone with the power of persuasion in this matter will wear. If not, we all lose.
