Carlos Saúl Menem

Carlos Saúl Menem is presented as a president whose actions reinforced Argentina’s extractive political institutions: he secured influence over the Supreme Court, sought to remove the constitutional limit on presidential reelection, and presided over an economic order that ultimately allowed the government to freeze and convert citizens’ savings. His career illustrates the book’s central distinction between elections and pluralism: an elected government can still face few effective constraints and use state power to favor its political interests.

Political context and governing base

Menem led the Peronist Party, which the book describes as the dominant force in democratic Argentina from the rise of Juan Domingo Perón in the 1940s. During civilian rule, the party won elections through a large political machine that bought votes, distributed patronage, and exchanged government contracts and jobs for support. These elections did not, in the book’s account, make the system pluralistic: power remained concentrated, and the party faced few constraints when the military did not intervene.

The party’s base and methods changed as circumstances changed. Juan Domingo Perón had cultivated the labor movement as a political constituency in the 1940s. After military repression weakened that movement in the 1970s and 1980s, the party shifted toward buying votes from other groups. Its economic policies and institutions were designed to deliver income to supporters rather than establish a level playing field. Menem’s later dealings with the Court and the presidential term limit are presented as continuations of this broader pattern, not as isolated departures from it.

The Supreme Court and executive power

A precedent for political control of the Court had been established under Perón. After his 1946 victory, Perón’s supporters in the Chamber of Deputies proposed impeaching four of the five justices. The Court had accepted the legality of military regimes in 1930 and 1943, and had also ruled unconstitutional a national labor relations board created shortly before Perón’s election. Nine months after impeachment proceedings began, the Chamber impeached three judges; the fourth had resigned. The Senate approved, and Perón appointed four new justices. In the book’s account, this freed him from a significant political constraint and enabled a court he had reshaped to uphold the conviction of opposition leader Ricardo Balbín for disrespecting him.

The consequences persisted after Perón’s government was removed in a 1955 coup. Successive military and civilian regimes selected their own justices, making presidential appointment of a new Court a political norm. When Argentina experienced a democratic transfer of power in 1990, Menem inherited a Court appointed after the 1983 return to democracy by a Radical Party president, Raúl Alfonsín. The book notes that Menem therefore had no democratic-transition rationale for replacing it, but his conduct before and after taking office pointed in that direction.

Before the election, Menem repeatedly tried, unsuccessfully, to encourage or intimidate sitting justices into resigning. He offered Justice Carlos Fayt an ambassadorship. Fayt rebuffed him by sending a copy of his book Law and Ethics, inscribed with the note “Beware I wrote this”. Within three months of taking office, Menem sent legislation to the Chamber of Deputies to increase the Court’s membership from five to nine. The stated argument—that the Court was overworked—echoed an argument used by Franklin D. Roosevelt in 1937. The bill quickly passed both the Senate and the Chamber, giving Menem the power to appoint four new justices and thereby secure a majority.

The book treats this victory as more than a change in the Court’s composition. A court that might have constrained executive policy was made vulnerable to presidential control, continuing the precedent that a new government could choose its own justices. In the book’s comparison, the contrast with the United States lies not simply in formal institutions, but in whether broad parts of society and political life are willing and able to defend a court’s independence. In Argentina, legislators were willing to undermine the Court despite the risk that doing so might eventually threaten their own position.

Reelection and the limits of resistance

After gaining control of the Court, Menem moved to rewrite the constitution to remove the term limit and allow him to run for president again. He was reelected, then sought to rewrite the constitution once more. This time, resistance came not from Argentina’s formal political institutions, but from factions within his own Peronist Party, which opposed his personal domination. The book thus distinguishes between a constraint imposed by an independent institution and opposition arising from a struggle inside the ruling party: the latter, rather than an effective constitutional check, stopped Menem’s next move.

This episode is placed within a longer cycle in which measures that might establish independent institutions fail to become secure precedents. In the book’s analysis, pluralism can protect institutions because no group can easily overthrow another’s power without risking a challenge to its own. Argentina lacked that broad distribution of power. Menem’s Court expansion showed how readily elected leaders and legislators could weaken a potential check on the executive, while the party’s internal factions ultimately proved more consequential than the institutions meant to limit presidential authority.

Economic policy, crisis, and the Corralito

Menem’s governments adopted policies after 1989 to stop hyperinflation and stabilize the economy. In 1991, his government legally tied the Argentine peso to the U.S. dollar at a one-to-one exchange rate and promised no change. To reassure the public that the commitment would hold, it encouraged people to open dollar-denominated bank accounts. Dollars could be used in shops in Buenos Aires and withdrawn from cash machines across the city. The arrangement helped stabilize the economy for a time, but made Argentine exports expensive and imports cheap. Exports dwindled, imports surged, and borrowing became necessary to pay for them.

As doubts about the peso grew, people moved more of their wealth into dollar accounts, expecting those savings to be protected if the government devalued the currency. The crisis that followed exposed the limits of that assurance. By late 2001, income had fallen for three years, unemployment was rising, and Argentina had accumulated a massive international debt. On December 1, the government froze all bank accounts, initially for ninety days, and permitted only limited weekly cash withdrawals. The first limit was 250 pesos, then 300, still available only from peso accounts. Depositors could not withdraw dollars unless they agreed to convert them into pesos; they did not want to do so. Argentines called the arrangement El Corralito, or “the Little Corral,” a name for being confined without a way out.

In January, the government devalued the peso. The exchange rate moved from one peso per dollar to four pesos per dollar, which might have seemed to vindicate those who had saved in dollars. But the government then forcibly converted dollar accounts into pesos at the old one-to-one rate. A depositor with $1,000 was left with the equivalent of $250 at the new exchange rate: three-quarters of the savings had been taken through the conversion. The episode is the book’s concrete demonstration that even an elected government could override property rights when political institutions imposed few effective checks.

The Corralito belongs to a longer history of economic instability rather than standing alone. Before 1914, Argentina had experienced about fifty years of growth based on agricultural exports—beef, hides, and grain—during a boom in world commodity prices. The book characterizes this as growth under extractive institutions: it brought no innovation or creative destruction and was not sustainable. Political instability and armed revolts around the First World War prompted attempts to broaden the political system, but the resulting mobilization proved difficult for the elites to control. A military coup in 1930 began decades of movement between dictatorship and democracy; military rule brought mass repression, including at least 9,000 illegal executions, and probably many more, as well as hundreds of thousands imprisoned and tortured.

Menem’s presidency appears against this background of concentrated power, political patronage, and weak safeguards. Even where elections continued, the ruling party could direct policy toward its supporters, change the rules governing executive tenure, and reshape the Court. The bank freeze made the same institutional weakness visible in economic life: the state could induce citizens to trust dollar accounts, then prevent withdrawals and convert those accounts on terms that stripped away much of their value.

Place within Argentina’s institutional pattern

The book links Menem’s political conduct to a recurring institutional pattern in which presidents treat independent checks as obstacles to be neutralized. Perón’s removal of judges supplied a precedent; Menem extended it by expanding the Court and appointing four justices. His subsequent effort to eliminate the term limit advanced the same concentration of executive power, though party factions eventually blocked a further constitutional rewrite. These were distinct episodes, but together they show the difference between a formal electoral system and one in which power is broadly distributed and constrained.

Menem is also presented as part of an economic history whose apparent prosperity and later crisis cannot be understood by looking only at policy outcomes in isolation. Argentina’s earlier export-led growth enriched a narrow elite without building a durable basis for innovation. In the 1990s, the currency peg initially stabilized prices but encouraged a pattern of expensive exports, cheap imports, and borrowing that could not be sustained. The Corralito turned that vulnerability into a direct loss for depositors. Across these episodes, the book’s emphasis is on who controlled institutions and who bore the costs: political and economic arrangements repeatedly protected concentrated power while leaving citizens exposed to decisions they could not effectively contest.

Menem was born in Anillaco, in La Rioja Province, and served three terms as the province’s governor before becoming president. The book uses this background to complicate the contrast between Buenos Aires and Argentina’s interior. During Spanish rule, La Rioja was an outlying part of the Inca Empire with a dense Indigenous population; colonial encomiendas and an extractive economy supplied food and mules for the mines at Potosí. In the nineteenth century, the province produced the warlord Facundo Quiroga, who ruled the area and marched an army on Buenos Aires. Later agreements between interior provinces and Buenos Aires amounted to a truce: the interior’s warlords left Buenos Aires alone, while the capital’s elites abandoned institutional reform in the interior. Menem’s provincial origins thus sit within the book’s account of a country whose political order was shaped by bargains between a wealthy capital and regions with very different histories.

The decisive significance of Menem’s career in this account is not simply that his government made controversial choices. It is that elections did not prevent the executive from gaining a majority on the Court, seeking to remove a term limit, or overriding depositors’ claims to their own savings. His presidency makes visible the book’s broader argument: economic crisis and weak property rights are sustained not merely by mistaken policy, but by institutions that concentrate authority and leave few effective means of resistance.