Javier Milei: "My contempt for the state is infinite"
economist.com
economist.com
https://www.scienceofrunning.com/2017/05/the-roger-bannister...
the Roger Bannister effect
I think it’s moreso during hard economic times. Telling constituents youre going to “axe wasteful government spending” is a very viable strategy for winning elections.
Also the GDP drop should be bigger but the previous year there was the worst drought in the country's history and it relies heavily on agriculture so the economy was already in a terrible state with a paralyzed and incompetent president at the time. Now the agrobusiness is growing strong (compared to the terrible previous year) but not enough to balance against the recessive economic measures to reduce state spending.
To give anyone reading this perspective, Argentina had inflation for almost 80 years, only a brief pause in the 90s and then again since the 2003. What other way is there?
Remember that inflation is something the government chooses to create. It's not some natural disaster.
The other way is to remove the power to create it from the executive leader and give it to some institution that is more stable.
previous discussion: https://news.ycombinator.com/item?id=9617710
We did more stuff besides the shock. But we also had more inflation, and it was more persistent.
And well, price control never works. This is well known. It's also well known that Argentina's last few presidents were people that wouldn't let patently known and unavoidable facts get in the way of their policies...
Also, a shrinking economy with normal inflation is better than a growing economy with hyperinflation, because that second is never really growing, just the meaningless number is going up.
Reuters:
BUENOS AIRES, Sept 26 (Reuters) - Argentina's poverty rate rocketed to 52.9% in the first half of 2024, the government's INDEC statistics agency said on Thursday, surging from 40.1% a year earlier.
https://www.reuters.com/world/americas/argentina-poverty-rat...
- The USD/ARS exchange rate is still tightly controlled by the state, which is neither libertarian nor liberal in practice.
- There are no significant incentives for exports. Only imports.
- Many Argentinian unicorns and startups are incorporated abroad (e.g., in the US) and show no intention of returning.
Moreover, Milei has proposed appointing a highly corrupt judge, Ariel Lijo, to the Supreme Court [1].
On a smaller scale, when my offices in Argentina needed to import three laptops for software engineers, the shipment was blocked due to the mail courier limit of USD 1,000. This cap is now being raised to USD 3,000, but such constraints highlight the ongoing barriers to conducting business.
I'm from Argentina and 30 years old, of course he led us to a recession but for the first time in my adult life I can keep prices in my head and I know next month they'll be pretty much the same. Some people who never experienced +10% inflation in a month can't even imagine that and I understand it. I for one like this stability, dunno.
Regarding your second paragraph, I work for a US company as well and I've been dealing with the mess that is just getting your hard earned money here. Only few people are aware that we still are mandated to change our dollars for pesos at the rate that the government says. Of course nowadays it's not that bad because that rate is almost the same as the one you get in the famous "cuevas", the black market exchange places. But in 2022-2023 sometimes the difference between those two were almost 100%. So you had to deal with tons and tons of cash, it was a nightmare.
There’s a saying: “In Argentina, everything changes every day, but if you come back after ten years, nothing has changed.” In your case, you were born around 1994. Until you were about six years old, if you went to the supermarket with your family, you could probably keep track of prices in your head. By the time you were 16, the inflation rate was likely double what it is now. If you ask someone at ~70 years old they will tell you similar stories about cycles of high and "stability".
[0]: https://upload.wikimedia.org/wikipedia/commons/thumb/9/93/Ar... (just note the Y axis scale... if it were from 0 to 100 you would truly see there were very few years with 1 digit inflation)
Then, sorry, you are mistaken about historical inflation rates and you can check that easily [1]. Comparing just one year of government inflation as a data point is not enough to extrapolate, and I haven't started talking about carry trade that gives investors more than 10% per month in USD. Last time that happened, just two governments ago and with The same guy, there was a crash one day.
Personally I don't think it would have been a good idea to let the value of the USD run free. If Milei and co. had done that from day one everyone would have rushed to buy dollars.
My 2 cents: I like that inflation is lower than ever, and hope that it keeps going down. I want our currency and country to be more stable. I want it to be viable, and believe we are on our way to achieving that.
You are, of course, free to express your opinion. However, the issue I see with your argument is that if a libertarian, pro-Austrian economics government decides to control the USD/ARS exchange rate, it contradicts the principles on which they were elected. This is not what the people voted for.
You have to thoughfully begin to implement changes in order for them to take place in the precise step-by-step order to actually change stuff towards an actual free market economy, and at the same time not just blowing up society's political support.
You cannot just make a jump from 40 to 80% of general poverty promising somewhere in the range from 5 to 15 years they begin to recover their previous economic statuses.
In Argentina, there is even a time constrain: 36 months precisely, after this the society's processes for a general election for presidency begin, and if the current government hasn't achieved enough success in the general population's opinion, one year later, it is not anymore the government.
Hence Milei is just going the fastest he can through the explained process.
I think the people voted a political leadership with enough empaty to understand they cannot just crush the population with free markets policies given the atrocius consequences of doing so without the minimal pre-conditions previously achieved.
I have an urge to punch some politician in the face every time somebody creates one of those systems that punish one and incentives the other.
They can't move independently.
It’s not so different from the old-school communists who claimed that a “dictatorship of the proletariat” is a necessary step towards the true freedom of mankind under proper Communism. Conveniently they were the ones in charge of the “temporary” dictatorship in this picture.
Libertarianism and communism are ideological siblings. Both fail time and time again, but to the believers it’s always someone else’s fault and the proper implementation of the ideology simply hasn’t been tried yet.
https://newrepublic.com/article/159662/libertarian-walks-int...
“When a group of libertarians set about scrapping their local government, chaos descended. And then the bears moved in”
But surely there’s a million reasons why these were not True Libertarians, they were just doing it wrong, and the ideology is actually sound. Just like with communism.
* Overflowing with optimism and "can do" * Equal protection under the law no matter the origin * Max tax 15% for all * Education and health benefits for all (accepting always flaws somewhere) * Anti-corruption was effective (ICAC) * Straightforward process to become a voting legal immigrant for non-Chinese * Many people speaking English, various Chinese dialects, Tagalog and more * Springboard to helping adjacent countries modernize * Unparalleled Eastern and Western food and housing and sociability
I moved to San Francisco only because I was a techie and had a need to change the world. If there had been the Internet, I might still be there...
Isn’t Argentina basically the opposite?
Milei's discourse is about destroying the State. Even though the Argentinian institutions have been stable enough to stop him and force him into the "restrict and make explicit" mode instead.
The subtext here seems to be that if the Trumpian right understood Milei, they would not idolize him.
On the contrary, I believe that the Trumpian right understands Milei just fine: they're on board with his ideologies.
Their supporters don't know or care much about economics but sure like a brash-sounding contrarian strongman leader who appeals to their insecurities. They don't mind a touch of the 'ascism since the leopard surly won't be coming for their sort of face.
Milei is the closest thing the world has gotten to Milton Friedman style politics in the last few decades and the American right now looks more like what in Britain or Canada you'd call a Red Tory, i.e. paternalistic conservatism. People like Michael Lind who try to give this an intellectual underpinning are explicit critics of libertarianism.
It's also paywalled, but riffing on the headline: why is your contempt for the state different than mine? "Intellectual Property" must be enforced by the state, no single entity can stop all thefts of "Intellectual Property". I personally find copyright limitations far more of a problem than the Pure Food and Drug Act, or the Voting Rights Acts, or Affordable Care Act.
Can I defy the state on issues of "Intellectual Property" and count on your support? If not, why not?
The free market in the real 3D world we inhabit needs freedom to operate granted by the local people/state
They operated under a free market obviously (you could trade with anyone, no taxes or levies). Disputes were resolved through arbitration or informal courts. They relied on private lawmen or hired security (Pinkertons)
Another example from Argentina is the situation in Ushuaia, where so-called "electronic companies" benefit from significant tax exemptions. These companies basically assemble Samsung devices rather than engaging in full-scale production, yet they present these products as if they were manufactured in Argentina. This highlights how government policies can sometimes distort markets instead of fostering genuine competition or innovation.
A lot can be debated (various forms of IP rights, etc). But in a “Wild West” situation, is it really a free market if your neighbor can just steal your goods if he has a gun and you don’t?
Going further, you could argue there’s as lot the state can do to facilitate trade (build infrastructure etc)