Concrete Dreams: Practice, Value, and Built Environments in Post-Crisis Buenos Aires
312
Concrete Dreams: Practice, Value, and Built Environments in Post-Crisis Buenos Aires
312eBook
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| ISBN-13: | 9781478005117 |
|---|---|
| Publisher: | Duke University Press |
| Publication date: | 11/15/2019 |
| Sold by: | Barnes & Noble |
| Format: | eBook |
| Pages: | 312 |
| File size: | 32 MB |
| Note: | This product may take a few minutes to download. |
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CHAPTER 1
Crisis Histories, Brick Futures
Economic Storytelling and Investments in Real Estate
In November 2001, Mariela called up her friend, grabbed a suitcase, and headed for the bank. The Argentine economic crisis that would become fully apparent in December loomed on the horizon, and although widespread fears about the solvency of the banking system were only just beginning to set in, Mariela decided to follow her gut and get all of her money out of the bank. Doing so wasn't easy, however. "We got to the branch and they told me: 'Fill out this form, and in seventy-two hours we'll give you the money,'" she told me, remembering the day. "So I filled out the form, and in seventy-two hours we went back, and they told me that I would have to wait another day. The next day I went back again, and again they told me, 'Your money isn't here.' So I started to make a scene. 'This is a fraud! I'm going to the Consumer Protection Agency, to the Public Advocate's Office! You're going to give me back my money!' " The scene brought the bank manager out from his office. "The manager came out and told me: 'Ma'am, your money isn't in this branch. The only way to get it is to go to the main office. You can take a bit from here, but you'll have to get the rest there.' " But Mariela had had enough of the runaround, of chasing her money: "I said to him: 'Absolutely not. I put the money in here, and you are going to give it all back to me tomorrow.' And the next day, I went back with my friend and the suitcase. They made me go into a reserved room, where the bank's accountant practically threw the money at me."
Mariela wasn't the only one trying to get her money out of the bank. Many others had begun to withdraw their money as well, and ten days later the government placed strict limits on withdrawals in an effort to stem a full-scale bank run. These limits were called the corralito — the "little corral," or "the crib"— and they were part of the dramatic unraveling of a decade-long relationship between the Argentine peso and the U.S. dollar, to which the peso had been pegged throughout the 1990s. As the rich moved their money offshore and powerful international investors began to speculate against Argentine debt, the ban on bank withdrawals cut people off from their savings at a time when they needed them the most: unemployment was on its way past 20 percent, and more than half of the population would soon be living beneath the poverty line. For a while, money trapped in the corralito sat in the banks, but a few weeks later deposits that had been dollars or dollar-equivalent pesos were forcibly converted to bonds denominated in unpegged (and devaluing) pesos. By getting her money out of the bank, Mariela had escaped devaluation by the skin of her teeth.
Ten years later, I asked Mariela if she had regained her faith in banks. She leaned back in her chair and let out a long laugh. She had not. In 2010, like many others I spoke with, Mariela was keeping her money in U.S. dollars in a safedeposit box. And also like many others, she was looking to use those dollars to buy an apartment — colloquially called ladrillos, or bricks. Beginning in 2004, when the economy had begun to recover, people like Mariela faced the problem of what to do with their savings. In Argentina, people with a "capacity to save" (i.e., who are not so poor as to not have any savings), who are at the same time not wealthy enough to engage in more elaborate financial or offshore economic practices, are referred to as pequeños ahorristas, or small savers. They include pensioners, small business owners, and professionals. Beginning in 2003 or 2004, many of them would turn to real estate as a means to save their savings, producing a boom in construction that would change the ways many pequeños ahorristas would relate to their money and the ways porteños (residents of the port city of Buenos Aires) from a variety of walks of life related to their built environment.
This chapter examines how buildings were incorporated into the investment practices of people like Mariela: investment practices situated in the turbulent history of a peripheral economy that has been no stranger to crisis. I think about investment in two distinct but related ways. The first is the perhaps more obvious way in which real estate investment refers to the dedication of economic resources to the purchase of an apartment, with some expectation about a future economic outcome based on the implications of having those resources in the form of a building or apartment. In this sense, real estate is one possibility among a set of other possible ways in which to invest one's money. In practice, it frequently means that real estate investment is part of a more elaborate economic choreography between diverse economic media, of which bricks are but one possibility. In Argentina, these other media principally include pesos and dollars (which themselves can exist in different material forms, such as numbers on a bank statement or in cash); still other possibilities, including precious metals (like gold) or financial products (like stocks), are present, but are more marginal to the investment practices of pequeños ahorristas. On one level, then, I think of investment in real estate (or bricks) as part of this choreography of instruments drawn together in economic practice.
But these investment practices are not abstract strategies; they are instead highly contingent, historically and geographically situated practices through which people work to cobble together a viable life on often shaky ground. In Argentina, like in many other peripheral economies, near-chronic macroeconomic instability can make economic decision making a particularly fraught practice. Indeed, the crisis of 2001 was but one moment in a much longer history of economic instability in Argentina. This instability has been particularly marked since the 1970s, but it stretches back to include important but more sporadic crises since the late nineteenth century. Some of these were widely shared across much of the world, while others have been felt particularly strongly in the economic periphery. Real estate investment in Argentina is situated in this particular context, on the geopolitical margins of world economic stability. Through decades of economic crises, currency devaluations, and capital flight, Argentines have honed quotidian practices that draw upon different media of savings to cobble together investments on a constantly shifting economic terrain. These histories of living in turbulent economies and the lessons they may carry for the present and the future are the focus of much attention in Argentina.
This is the second sense in which I understand pequeños ahorristas to be invested in real estate: the sense in which they dedicate time, effort, and energy to understanding the particular contours of the world through which their money moves. One of the ways that they have managed to cobble together their economic lives is by investing a considerable amount of time and passion in economic storytelling: the narration of past economic events in a way that holds them present in memory with the intention of building a more promising future. These economic stories — like the one Mariela told me and others I'll describe later — are sites of popular analytical practice through which porteños both understand and reshape the intricate terrains on which economic practice unfolds. The storytelling is part of the practice of investment itself, the means through which the present and future events are formed in dialogue with historical memory and negotiated through material practice.
AN ECOLOGY OF INVESTMENTS
Real estate booms frequently conjure images of speculative investment on behalf of powerful financial actors and institutions. Indeed, the first decade of the twenty-first century was marked by a series of financially driven real estate bubbles in the United States, Spain, and Ireland that inflated and then burst, with catastrophic national and global ramifications. In the case of the U.S., for example, real estate surged in response to demand by international investors for mortgage-backed securities, a new kind of financial product that promised a reliable stream of payments that could beat the low interest rates being paid on other instruments, like federal government bonds. Mortgage-backed securities were supposed to be incredibly stable, and they succeeded in luring large institutional investors, like pension funds, which more traditionally invested in bond markets. But things didn't turn out as planned. To simplify only slightly, high demand for mortgage-backed securities drove banks to offer more mortgages so they could sell more mortgage-based financial products. Eventually, most prospective homeowners with the capacity to pay a mortgage already had homes, and so lenders began extending loans to people who were unlikely to be able to repay them. When these mortgage holders began to default on their loans, mortgage-backed financial products that were supposed to be stable instead became "toxic," causing repercussions throughout the major financial institutions that produced them and that had invested in them.
The real estate boom in Buenos Aires in the years after the crisis was markedly different from these headline-grabbing booms and busts driven by mortgage lending, because in post-crisis Argentina there was no mortgage market to speak of. Instead, the kind of construction that was most ubiquitous was funded by people like Mariela moving their savings into real estate for a complex set of reasons I explore in this chapter. They often did so in cash, with as little mediation through the world of high finance as they could manage.
Alongside the apparent complexity of finance, buying something with cash may seem straightforward. There is a popular tendency to think of finance as a highly complex world, full of arcane forms of expertise, institutional relationships, technological change, and innovation. In boosterish accounts, this complexity is deployed to attribute to financial experts a kind of privileged knowledge that is beyond the capacity for comment by everyday people. In more critical accounts, finance's complexity can be used to depict it as abstract and divorced from the real world of actual economic life. In both of these narratives, buying something with cash feels low-tech, straightforward, and more real. But the intricacy of economic practices like Mariela's is worth paying attention to. Finance is a complex and arcane world, but there's nothing simple or straightforward about nonfinancialized forms of economic practice either — a fact that has long been the focus of anthropologists and sociologists studying the material, spiritual, social, and political dynamics that are in play in even apparently simple forms of exchange.
Think back to the story Mariela told me about her savings and the transformations she ushered them through just in this brief story. At the beginning of the story, her money was materially manifest most directly in a set of numbers printed on her bank statements. Ostensibly this money was held in the bank and available on demand. But when she went to retrieve it, she was told to fill out a set of forms and come back in seventy-two hours. When she did that, she was told that her money was "not in this branch." By the reckoning of the bank manager, the bank's money in this particular branch was not fungible with the bank's money in other branches: although the bank is one corporation with many branches, the money in this branch was not Mariela's, as if there were a bag of cash with her name on it somewhere. Then there is the bureaucracy of the form and its inefficacy and the way Mariela countered the form with an emotional outburst in the bank: a loud insistence that even according to the bank's odd reckoning of the geographic distribution of its cash (was it here or in the main branch?), she had put her money in at this branch, and she wanted it back in this branch. Mariela's scene threatened to set off a chain reaction, evoking the scene from Mary Poppins in which Jane and Michael Banks cry out for their tuppence and cause a run on the bank. The fact that Mariela's scene seemed to be efficacious means that money, even in purportedly staid financial institutions, flows along affectively greased paths — affects that were manifest again when the bank manager tossed her money at her the following day. All of this — the bureaucracy, the strange geographic distribution of institutional funds, the affect — was necessary to turn her money from a bank deposit into cash. What for many of us is a straightforward and smooth transformation between account balance and bills was, for Mariela in this moment, anything but that.
The complexity continues: Mariela was lucky not only that she got her money out, but that she was able to withdraw her money as dollars instead of pesos. If she had made her withdrawal several weeks later, not only would her withdrawals have been sharply limited in quantity, but her ability to access them as dollars would be far more complex (and disadvantageous). The fact that she held her money in cash dollars meant a lot once the peso was unpegged from the dollar, since the devaluation of the peso effectively tripled the value of her cash. National macroeconomic and political events, the federal default on loans, and the matrix of world financial institutions that influence the value of the peso pressed in and became felt in Mariela's economic practice. And then, as soon as she got the money out of the bank, Mariela found herself holding tens of thousands of dollars in cash and had to figure out what to do with them. Mariela didn't like the risk associated with keeping them in her house, and so soon after, her dollars were back in the bank in a safe-deposit box instead of an account. I will return to this complex set of relations and histories, but for now notice the way that money — the relationship between dollars and pesos, bank accounts and cash — isn't as straightforward as it may seem, a fact made especially apparent in moments of economic crisis, when relationships that may be smooth in other moments stretch or break at the seams. Over many years of living in a turbulent economy, Argentines have developed a fine-tuned attention to these particularities of connection and relation among various forms of economic investment. Real estate's disarticulation from finance and mortgage lending does not mean that bricks have their own inherently stable autonomous value. Instead, it means that a different set of relationships, of articulations and disarticulations with other media of savings, comes into focus: in this case, with dollars and pesos, bank accounts and cash.
I call these sets of relationships among diverse media of savings an ecology of investments. I use the word ecology (instead of its close etymological relative, economy) because of the conceptual friction it brings to a conversation about money. My principal intention is to leverage the set of dense interrelationships that have become part of how we think about ecologies as a conceptual push to think more relationally about economies. The two words also share an etymological link in the oikos, the home or household. Logos (the second part of ecology) is frequently used to indicate speech, reason, "the study of," while nomos (the second part of economy) refers to management, the distribution of things. Holding these roots together is a way to approach the ways forms of knowledge (logos) embedded in storytelling about money and property affect their distribution and management (nomos) and how both reconfigure real estate and the built environment (the city as oikos, the home or dwelling place).
Thinking ecologically about investment means several things. At the core is the way in which ecology calls upon us to attend to an "emergent web of relations among constitutive and constituting parts, such as when one shifts attention from a particular organism to the entire ecology," as Tim Choy has described one of the word's key meanings (2011, 11–12). For the specific purpose of this chapter, I am interested in tracing the ways that dollars and pesos, bank accounts and cash, and gold and bricks are not just treated as objects unto themselves by Argentine investors, but are understood as part of an ecology, related to each other and the world around them in complex ways. People like Mariela don't treat any one investment like any other, but attend to their particular capacities and to the relational webs of which they are a part. This kind of ecological attention to investments approaches them as more than a series of abstract values seamlessly convertible from one to the other; rather, it pays close attention to the particular forms of connections that define them and works to imagine those that may become relevant in the future.
(Continues…)
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Table of Contents
Acknowledgments viiIntroduction. Concrete Dreams 1
1. Crisis Histories, Brick Futures: Economic Storytelling and Investments in Real Estate 32
2. A Market in Square Meters: Numbers and Narrative in Real Estate Market Analysis 67
3. Barrio Ecologies: Parks, Patios, and the Politics of Articulation 94
4. Recoding the City: Plans, Codes, and the Politics of Voice 140
5. Architecture is for Everyone: Bodies, Drawing, and the Politics of Care 179
Epilogue. Enduring Values 222
Notes 235
Works Cited 255
Index 271
What People are Saying About This
“Concrete Dreams is a beautifully written ethnography that focuses on how the specific everyday practices of lay investors, real estate analysts, and architects produce divergent forms of value in the volatile political and economic landscape of recent Argentine history. The ethnographic narratives show exactly how ‘buildings’ emerge as partially connected conceptual and concrete entities that hold value as investments, as objects of design, and as homes. The power of the analysis lies in the combination of a deep understanding of dominant economic modes of valuation with a sensitivity to the fragile relational spaces where alternative possibilities are kept alive.”
“Nicholas D’Avella has managed to take a topic central to the historical sweep of Argentine political economy and written an intimate, engaging portrait of quotidian life amid economic uncertainty. He makes real estate markets and municipal zoning understandable at the macro-scale with which they crash economies and at the micro-scale that causes people to strap money to their bodies. Ambitious and weighty, subtle and intimate, Concrete Dreams is an exceptional urban ethnography.”