To Tango with the Vultures: Piketty, Debt, Social Justice, and Sovereignty in Contemporary Argentina

• In Event: Piketty in Latin America

Abstract

This work analyzes the actions of NML Capital and other hedge funds – “vulture funds” on contemporary Argentine social justice spending, particularly efforts since 2004 to reduce economic inequality through State intervention. As Thomas Piketty argues, economic inequality is a central feature of capitalism. For such investors, the rates of return on the purchases in secondary markets of Argentina’s debt are now estimated to be 1700%. As NML and other holdouts press for full payment of debt plus interest, the IMF and World Bank argue that this kind of behavior threatens financial recovery and debt restructuring efforts by sovereign, albeit poorer, nations. It also dramatically increases concentration and exportation of wealth; such leads to social and economic instability. This work will argue that actions of “vulture funds” may ultimately pose a challenge to Argentine democratic political order – as Piketty’s thesis suggests and to Argentine sovereignty.

Author

• Patrice E Olsen, Illinois State University