Uncertainty And Risk In Macri's Argentina: On Protean Power And Unknown Unknowns
Thus, what began as a currency crisis due to a lack of credibility in the Central Bank’s capacity to contain a run on the peso became a full-blown political crisis, with Macri’s 2019 reelection being called into question, as the opposition calls for Peña’s head on a stick as a sacrifice that would signify a change in strategy.
The president expressed full support of Peña but forced Central Bank President Federico Sturzenegger to resign, and has—at least temporarily—opened up the decision-making table to the so-called political members of the ruling Cambiemos (Let’s Change) Coalition. A confused Macri has admitted mistakes, but also made it clear that he plans to double down on his current economic strategy: cutting the deficit. As Macri stumbles forth, a fragmented Peronist opposition senses opportunity and, accustomed to the uncertainty of governing a volatile nation for decades, is trying to seize the initiative and plot its return to power. At stake is the future of an embattled nation, its citizens now collectively worse off after a violent devaluation and the unexpected resurgence of inflation and recession.
“There are known knowns, there are things we know that we know. There are known unknowns, that is to say, there are things that we now know we don't know. But there are also unknown unknowns, there are things we do not know we don't know.” That was Donald Rumsfeld, U.S. Secretary of State during the presidency of George W. Bush, during a 2002 press conference responding to a question about the evidence linking Saddam Hussein and terrorists’ possession of weapons of mass destruction. Initially ridiculed, Rumsfeld’s statement was brilliant in that it brought to light a complex dichotomy: calculated risk vs. uncertainty.
In Protean Power: Exploring the Uncertain and Unexpected in World Politics, international relations scholars Peter Katzenstein and Lucia Seybert argue that traditional conceptions of power fail to explain so-called black swans or extraordinarily unexpected situations such as the 2008 global financial crisis or the rise of ISIS. The mainstream analytical framework—control power—sees power as “actors’ evolving ability to exercise control in situations of calculable risk and their consequent ability to cause outcomes these actors deem desirable.” Protean power, rather, “is the effect of actors’ agility as they adapt in situations of uncertainty.” While they define risk as something that is conmensurable, uncertainty refers to complex and dynamic situations in which projections and models break down. Control power is Newtonian while protean power pertains to a quantum world. They are not interchangeable, though, but interrelated in that situations are fluid.
During the first two years of the Macri Presidency, the government, economic actors, and international investors analyzed Argentina and the global environment as one of calculated risk. Macri’s surprise electoral victory ended more than a decade of Kirchnerite populism, leading to a lifting of currency controls and a marked attempt at global integration. An expected recession was followed by falling inflation and economic growth. Investors profited handsomely as appetite for sovereign bonds and equities surged. Macri and his triumvirate—Buenos Aires Province Governor María Eugenia Vidal, City Mayor Horacio Rodríguez Larreta, and Peña—delivered a decisive victory over Cristina Fernández de Kirchner in 2017s midterm elections, confirming the fragmentation of the Peronist opposition. The question wasn’t whether Macri could win reelection in 2019, but whether Vidal, Rodríguez Larreta or Peña would take over in 2023.