National Review Online
Tuesday,
January 23, 2024
If there
was something that we did not have on our bingo card for 2024, it was that the
standout speech in Davos would be an encomium to (very) free markets, free
enterprise, and the entrepreneur as hero. If there was something else missing
from that card, it was that such a speech would be delivered by the president
of Argentina. As a result of heavy-handed and improvident state intervention in
the economy for the better part of a century, Argentina has become a byword for
economic decline. In 1900, it was one of the richest countries in the world.
That was then.
Long-standing
economic decline is marked by recurrent economic crises — from debt defaults to
bouts of severe inflation — when the chronic becomes acute. By 2023, as
inflation soared (it was around 160 percent at the time of the presidential
election in November), Argentina was, again, running out of money. For many
Argentines, this was, finally, enough: They elected Javier Milei, a
self-described “anarcho-capitalist” economist, to the presidency by a
comfortable majority. Even if this was a vote fueled more by a rejection of the
old regime — and the deeply eccentric Milei’s oddball charisma — than by any
sudden enthusiasm for anarcho-capitalism, his victory may represent the best
chance that resource-rich Argentina has had to take advantage of its great potential
for a long, long time. Whether it will succeed in doing so has yet to be seen.
The new president has a hard fight ahead of him.
In
his speech, Milei showed clear signs of the Manichean dogmatism of a true
believer, not a plus (even “neoclassical liberalism” was given a battering),
but that should matter less than the truth of his underlying message, sharpened
by his experience in Argentina, that the pathway to prosperity does not lie
through the corridors of government. Milei has little time for the idea of
“social justice.” It, he argues, “is not just, and it doesn’t contribute to
general well-being,” both for its coercive elements and for the way it destroys
growth: “Those who promote social justice start with the idea that the whole
economy is a pie that can be shared differently. But that pie is not a given.”
The
way to grow that pie, in Milei’s view, is through the operation of free markets
(it’s unusual for a speech by a president to include a discussion of the market
as a discovery process), not by “the state punish[ing] capitalists when they’re
successful.” We agree. While there is not a lot of nuance, to put it mildly, in
Milei’s definition of “socialism,” by which he means almost anything where he
detects collectivism (including populism and nationalism, something hard to
reconcile with the way he is sometimes caricatured), it is difficult to argue
with this:
Today, states don’t need to directly control
the means of production to control every aspect of the lives of individuals.
With tools such as printing money, debt, subsidies, controlling the interest
rate, price controls, and regulations to correct so-called market failures,
they can control the lives and fates of millions of individuals.
There
are passages in the speech where we think that Milei goes too far (but then we
are not anarcho-capitalists). However, it’s hard to object too much to a
politician willing to make the case that “free-enterprise capitalism is not
just the only possible system to end world poverty” but also the “only morally
desirable” way of achieving this goal. Refreshingly, Milei is a supporter
of free-market capitalism who is not prepared to concede that its opponents
have any claim to the moral high ground.
Milei
is rightly concerned that the West is moving away from the ideas and the
policies that made it rich, and so, flying commercial, he showed up at Davos to
sound the alarm:
The case of Argentina is an empirical
demonstration that no matter how rich you may be, how much you may have in
terms of natural resources, how skilled your population may be, how educated,
or how many bars of gold you may have in the central bank — if measures are
adopted that hinder the free functioning of markets, competition, price
systems, trade and ownership of private property, the only possible fate is
poverty.
It
is a lesson that Argentina has learned at an extravagant cost, and that the
rest of the world should remember.
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