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The Frog in Boiling Water.
Proposed Amendment to the Argentine Civil Code.
Por Carolina González Rodríguez
PhD Candidate – University of Buenos Aires, School of Law
Bases Foundation – Researcher.
In 1853 Argentina was formally born as the country it is today. Its National Constitution was (the past tense of the verb is purposely used) a gem of knowledge, wisdom and reasonableness. Its main author was one of the brightest minds of the 19th Century: Juan Bautista Alberdi.
Alberdi was aware of all the main sources of the human though at the time, and an adherent to the ideas of the Scottish thinkers, Adam Smith, Hume, John Stuart Mill and the like. At the time he drafted the Constitution, he had a clear idea about which were the most basic principles to be followed in order to become a developed and civilized nation: individual rights, freedom as a system and the unconditional respect for private property.
The 1853 National Constitution was, indeed, a liberal Constitution, drafted along the recipe which –as was later proved- turned countries like the US, Canadá and Australia into the developed countries they are nowadays (1).
However, Alberdi was wise enough not to “cut and paste” the US Constitution, but being aware, as he was, of the idiosyncratic peculiarities of the young Argentina he provided us with a very proper Constitution, which following the main liberal principles aforementioned, still mirrored the local reality. Hence, Argentina was born as a federal country, but instead of being formed by separate, independent states it is formed by Provinces with original rights acknowledged, but most of those granted by proxy to the Federal Government.
The liberal ideas fostered by the Constitution made it possible to turn Argentina, a small, deserted, with high illiterate population rates into the 8th economy of the world, with a short period of 70 years or so. In 1860, Argentina’s estimated GDP was that of U$S 2,148 Million, rising up to U$S 60,450 Million in 1930. By the very same period, Brazil’s estimated GDP was that of U$S 5,507 Million, and U$S 37,540 Million, respectively. This means that by 1860, Brazil’s GDP was 155% higher than Argentina’s, while in 1930 Argentina’s been 61% higher than Brazil’s (2).
Those are impressive figures, and such a growth for Argentina was only possible because of the liberal principles and contents of its Constitution.
By 1971, and not without long and arduous debates, the Civil Code was passed and as of then, with several important amendments, ruled the country’s civil life. Its author was Dalmacio Velez Sarsfield, whom although an opponent of Alberdi (or actually, Alberdi was a strong opponent of Velez Sarsfield’s civil code), drafted a civil code which pretty fairly represented and mirrored the liberal principles included in the National Constitution. The Civil Code is (for the time being) a body of law quite proper of those in continental law system, and among its major sources, Velez Sarsfield relied on Savigny’s ideas, as well as on the Portuguese author Freitas’, the roman law, of course, and the Napoleon Civil Code. In a whole, the Argentine civil code is a coherent and respectful of the National Constitution body of law.
By 1968, Law 17.711 was passed, amending about 5% of the total, but keeping undamaged the liberal principles involved in it.
§ What’s on the Civil Code.
For countries with the continental legal system and tradition, Civil Codes are usually extensive and comprehensive bodies of law which intent to provide with a complete regulation of the –precisely- civil relationships and exchanges in the society.
Different from the common-law system, which works otherwise, in the continental law systems the rule comes first, and later the case; or the particular situation which may or may not cause to pass a particular law. This means that in continental law system countries, most of the exchanges (both material and moral) are ruled beforehand, and in order to be valid and cause liabilities, the exchanges must adapt, both in form and in content, to what the law rules. Otherwise, parties may be left without rights to later claims. For instance, purchase of real estate, in order to be valid and binding, must be done before public notaries, with a whole lot of formalities and later registered in a Registry of Real Estate and Property. If the buying and selling of real estate does not meet such formal requirements, then there are not any legal effects, and the buying and selling did not take place.
For classical liberals, this regulatory method or system is not the most suitable to foster the ideal regulatory scheme since it leaves very little room to the free will of the parties involved. However, those in favor of it believe it to be better than the common-law system regulation, since it provides with “juridical certainty” to situations alike those ruled by the Civil Code. One knows, upfront and in advance, what exactly is necessary to be done in order to have an acknowledged and executable right.
In the particular case of the Argentine Civil Code, as amended, the whole spectrum of the relationships between individuals and between individuals and the state, are –presumably- ruled. In 4051 Articles, the Argentine Civil Code is formed by a Preliminary Section, in which what the law is and how to calculate legal terms are prescribed, and four Books. The First Book has two Sections related the Persons (in general), and the Family relationships (this includes issues such as marriage, divorce, adoption, alimony, et.al). The Second Book has Three Sections which in 1815 articles rules all the legal duties and obligations between individuals, and the form and contents of the contracts. Some are left free to the will of the parties regarding its form and contents, and some others are detailed regulated both in form and contents. The Third Book rules Real Estate rights and duties, particularly the extensive requirements to be met in order to have duly and properly acquired or sold real estate property. And the Fourth Book rules on Inheritance rights and processes.
Although the system is far from that desirable for fostering and enlarging the cooperation and free exchange among individuals, within a free and open society, the Argentine Civil Code has always been praised for granting supremacy to the free will of the parties over the regulated exchanges. This means that the free will of the parties was to be understood the rule, while the regulation was the exception. And even though with the passing of time such supremacy got weaker and less executable (due to the monstrous amount of legislation attached to the Civil Code), still the juridical sense was the prevailing of the liberal contents and “spirit” of the National Constitution mirrored, to the maximum extent possible, in the Civil Code regulations.
Private property is not less protected, even though during the 1971 amendment the Article 1071 bis was included, forbidding “abusive” use of private property. This brought, at the time, huge discussions and opposition. But 40 years later reality probed such article pretty harmless when it comes to protect and defend private property rights.
In essence, the Civil Code at all times acknowledges (i) the Constitutional rights to own private property; (ii) the supremacy of the individual´s free will ruling their exchanges, and (iii) egalitarianism… before the law. Both individuals and the State are equal before the law, meaning that the State is as much liable for damages and breaches of contracts as the individuals are.
With the proposed new Civil and Commercial Code, to be discussed at the Legislature in as little as 12 days as of today (November 17th, 2013), all this is at jeopardy and under the fierce attack of the socialist threat.
§ The amendments
The proposed amended Civil and Commercial Code (as herein, “the new code”) is to be formed by six Books and two Annexes. In the first Annex, a distinction between Law (as rights) and Law (as legislation) is included, as well as 6 Articles related to the execution and exercise of rights. And as early as this stage of the proposed amendments, the new code rules that:
“Article 14: Individual rights and Collective influence rights. This code acknowledges:
a) Individual rights
b) Collective influence rights.
The law does not allow an abusive exercise of individual rights when it may affect the environment and the collective influence rights, in general”
By 1994, the National Constitution was amended, as an (successful) attempt to stop former President Carlos Menem’s intention to run for a third (unconstitutional) term.
Among other, the new Constitution included the recognition of collective rights, like those appointed to groups, such as “consumers” and “aboriginal people”. However, the civil liberties which form what it is known as the “Dogmatic” part of the Constitution, were –fortunately- not removed, but inclusion of collective rights caused a systematic collision between both sets of rights and interests.
The Article 14 of the new code puts an end to such collision, and clearly states supremacy of the collective over the individual rights. Also, its wording is so ambiguous that it leaves basically no room to whatever “abusive exercise” of individual rights would –allegedly- be allowed.
In Article 18, such consideration of collective rights over individual rights becomes even clearer, when the new code reads:
“Article 18. Aboriginal communities’ rights. Aboriginal communities with acknowledged legal status have the right to possession and communal ownership of their land, according to Book Fourth, Title V of this Code. They also have the right to participate in the management of their natural resources understood as collective influence rights“.
This article refers, mainly, to the several many claims by aboriginal communities in the Patagonia region, mostly, where land prices are high. And again, it sets out the solution to the argument between individual property rights and collective property rights.
The formula is openly communist, given that the individual members of the aboriginal communities are not to be considered as citizens and persons by themselves, but as irrelevant parts of the relevant whole: the community.
But it would not be bold to say that the worse of all amendments and collective references included in this new code is the one in Article 240:
“Article 240: Limits to the exercise of individual rights’ entitlement over goods. The exercise of individual rights over the goods aforementioned in previous Sections must be compatible with the Collective Influence rights. It [the exercise of rights] must meet national and local administrative laws passed upon the public interest and must affect neither the performance nor the sustainability of flora and fauna ecosystem, biodiversity, water, cultural values, landscape, among others, according to the criteria foreseen in the particular legislation”
This Article implies, in our opinion, the death certificate of the liberal principles adopted by the 1853 National Constitution, held by the Republic of Argentina up to date. Consequences of passing this amendment, including this Article, leaves almost no individual, private activity left to the private sphere of individuals’ will and desires, and the most banal activity might be subject to the Courts’ opinion and determination. It would be the end of the private relationships, and the beginning of the state involved in every and all social bond or link among individuals.
By including “flora and fauna”, “ecosystem”, “cultural values”, “biodiversity”, the new code set a clear standard as to what is higher regarded: collective concepts and considerations, over individuals’ rights and will.
By including “cultural values”, the new code opens a Pandora box as to what is to be understood as such “cultural values”. Would it mean that to hear any music in other language but Spanish is against the law? Or that to sell any given piece of land in the city of Buenos Aires, for the development of a 20 stories building which would –naturally- modified the landscape of that area, would be illegal? Or that planting genetically modified seeds of crops would also be illegal, given that such combination of molecules and DNA would be “disturbing” the biodiversity?
I hope you get to grasp the awfulness of this particular Article, which is even worse when you think the body of law within is being included.
§ The Almighty State
If you though that the translated Articles of the new code were terrible enough… think again. Articles 1764, 1765 and 1766 would puzzle you further.
Book Third, Title V, refers to the whole regulation of liabilities and damages, core issue to be covered by the Civil Code, since it provides with the legal guidelines to foster, or not, claims for damages. By ruling what they are, members of the society are aware of the consequences of their actions, since –up to date- freedom is the rule and damages are the limits to that freedom.
But Section 9th of the new code would dramatically change that, since it rules on “Special events of Liabilities”. By doing so the new code drifts apart from the current and original Civil Code. While in the Civil Code there are no different treatment for either individuals or the State regarding their Liabilities for whatever damages caused to any third party, the new code –through the Articles to be translated below- clearly set the State apart from the liabilities system, leaving individuals completely helpless in case they would suffer any damages caused by the State and / of, of course, public officers.
Section 9th. Special Events of Liabilities
Article 1764. Inapplicability of the rules. The contents of this Title do not apply to the liability of the State, neither directly or by subsidiarity.
Article 1765. Liability of the State. State’s liability is ruled by administrative law norms and principles, national or local, accordingly.
Article 1766. Liability of the Government employee or public officer. Acting or negligence of public officers performing their duties, due to unfulfilment of their legal duties is ruled by administrative law norms and principles, accordingly.
What these articles are, basically, saying is that the State AND state employees and public officers shall not be liable for their wrongdoing and damages caused before Courts, but they’d only be accountable before administrative courts, which turns the State in both Judge and Defendant at the same time. Such double standard collides dramatically with the most basic legal principle that it is not fair to act in both capacities, leaving the claimant helpless in his quest for justice to be done.
But not only that. Excepting the State from the legal system of liabilities clearly says that, in the Republic of Argentina, we are not all equal before the law. The State has privileges, and the citizens, disadvantages. Egalitarianism would, then, be officially understood as “equals due to the law”, and not “equals before the law”, being the only one entitled to appoint who is equal to who, and under what circumstances.
On February 22nd, 2012, at 8.30 am, a train owned by the national government, and run by some alleged “friends” of the powerful Kirchner couple, violently crashed against the terminal station, located at the Buenos Aires neighborhood of Once.
The brakes did not work, and the train carrying 1200 passengers in a rush hour such at the early morning hour, crashed causing death to 51 passengers, and harming other more than 700 people.
Were the new code a law by then, none of those 850 families and victims would have been able to claim damages against the State and the State officials whom are being charged with corruption counts. According to a report drafted by the General National Audit Office, in as little as 7 years, between 2003 and 2010, subsides in the amount of U$S 1924 Million is being estimated as given by the government to TBA, the company in charge of running that train line.
It is important to bear in mind that 2003 was the year when late Nestor Kirchner got to power. And in 2007 his widow, Cristina Fernandez de Kirchner, succeed him and became President. She won a second term and she will run the country until 2015. It is the same corrupt administration the one fostering and promoting the passing of this new civil code.
In the last 10 years Argentina witnessed a dramatic deterioration of its social, economic and political situation.
Populism, corruption and crony capitalism are the rule, while the Rule of Law gets weaker by the hour, causing important rates of decay in production, education and development, in general terms. Further and more vicious attacks to the media and the freedom of speech, inflation, loss of the US dollars reserves, more people living out of social welfare plans, ban on imports and economy recession are just a few of the symptoms suffered due to the socialism pursued by the Kirchner administration. Now they are moving forward with the closing of the plan: to abolish private property.
It is well known that private property is the key to civilization, providing incentives not only to maintenance and enlargement of scarce resources, but also to human development. In 1858, Joseph E. Brown, a representative to the Minnesota Democratic Constitutional Convention, said “Give a man a separate tract to cultivate and he does not hesitate to labor in the common field… The common field is the seat of barbarism; the separate farm, the door to civilization”.
It would be quite comforting to say that it is the Kirchner’s regime the one promoting socialism and collectivism. But unfortunately that it is no so true. Socialism is the wide-spread ideology embraced by the most of good will people, ignorant of the consequences of such ideology.
Like the frog comfortably swimming in warm –but boiling- water, we are being drifted away and distracted from what is important to the preservation of the Constitutional values; those which made Argentina grew from a desert, remote part of the world, with almost 80% of illiteracy into a vibrant, thriving economy. As taught by one of the most respectable Argentine economist, Roberto Alemann, “The 1852-1880 term is, in general, a period of expansion and development. The economy grew, as well as the population, new land is gained for cattle farming; exports increases and foreign savings are invested to finance infrastructure works” (3)
We are facing dangerous times. Argentina has entered into a downfall spiral of ideology, crony capitalism, corruption and inflation. If the Civil Code is finally amended, the life –as we knew it- is going to change for worse. Individual liberties, private property and egalitarianism BEFORE THE LAW would be gone… most likely forever.
But, there is plenty to do. Drafting this Memo is just one little thing. Let’s hope it’s not too late, and we are able to jump out of the pot, while we still can… before the water actually boils.
1 Argentina is usually measured against those countries when it comes to compare their starting points. This, in view of their geographic, natural resources and population features which were pretty similar at the time
2 Source: www.gapminder.com
3 Alemann, Roberto. Breve Historia de la Política Económica Argentina. 1500-1989. Editorial Claridad. Buenos Aires, 1989.