For Argentina to be stable, we would need a stable industrial base. That's very difficult to establish when the state is, in effect, taxing our exports and subsidizing our imports, even if it's less directly than during the Kirchner years.
If Argentine output declines and unemployment soars, it will be very hard for Milei or his successor to avoid defaulting on the bailout loans, unless an even larger bailout follows, as it often has.
And this deplorable situation is not just a result of the central bank not printing money, which is indeed a perfectly libertarian position. Rather, it is a result of a massive outflow of foreign exchange reserves from the central bank in recent months, the explicit objective being to artificially raise the exchange value of the peso, worsening our uncompetitive situation.
A less competitive domestic industry does not imply an overvalued currency. It could mean that domestic industry is economically less productive compared to foreign industries. Since Argentine domestic industry has enjoyed vast protectionist barriers for a long time, there is good reason to think this is why they are uncompetitive. At any rate, inflating the peso to make industry nominally productive in terms of foreign exchange, as past administrations have done, would also not make domestic argentinian industries more productive; it would simply trade a boost to domestic industry with a drain on the argentine government, hiding the less productive nature of domestic industry until hyperinflation catches up.
Removing protectionist barriers is also quite libertarian, and not even uniquely libertarian - free trade is universally supported by well-trained economists. In Argentina's case, this means domestic industry has to catch up for all the lost productivity that trade barriers have caused over the years.
Oh, I certainly agree with that!
> Removing protectionist barriers is also quite libertarian, and not even uniquely libertarian
I agree with that too.
> Since Argentine domestic industry has enjoyed vast protectionist barriers for a long time, there is good reason to think this is why they are uncompetitive.
That is also true, but I don't think it's actually an alternative to having an overvalued currency as you've framed it; rather, when the currency is allowed to float freely (or, rather, sink freely), the market solves the problem. The weaker currency can buy less imports, making domestic industry more price-competitive, at least domestically. The export price domestic industry needs in order to pay its wages and locally sourced resources falls, so its products become cheaper in international markets, where their cheapness can enable them to compete with less shitty foreign alternatives, and manufacturing products for export becomes more profitable.
There may be very-low-value-added industries like the air-conditioner-assembly industry in Tierra del Fuego which never become profitable in this way, and will need to close, but I believe our automotive and textile supply chains are largely domestic on a value-added basis.
All of this is very different from the kind of hyperinflation that results from unconstrained money-printing. But hyperinflation is the Black Beast that seemed ready to sink Milei a month or two into his term, and certainly some form of hyperinflation could ensue if people lose their residual faith in the peso, perhaps faster than the lack of newly printed pesos could bring it to a halt.
The major risk of such free-market shocks is that a temporary economic setback could cause permanent damage or death to some people, for example through lack of access to health care or through famine.
I think Argentina is not really in danger of famine on a free-market basis, despite our rampant latifundismo. At worst, the situation could require a taxpayer-funded food-stamp program for some of the staples previously covered by Precios Cuidados, such as sunflower oil, polenta, enriched white flour, sugar, and yerba mate. Maybe we could add lentils, soybeans, and texturized vegetable protein. Today, though, we're far from famine—every neighborhood butcher I've visited in the conurbano discards their beef-fat cuttings, unable to sell them. When I volunteered for the Casa de Maria in Isla Maciel some years ago, the mostly obese villa residents to whom we distributed boxes of donated food largely resold it rather than eating it. I haven't been back there in years, but I imagine that to still be the case.
Health care access has been a major problem under Milei, but we do still have the public health-care system Perón established, so we are still not in the terrible situation of the US, where people with major chronic health problems only receive medical care when an ambulance brings them to the emergency room. Argentina's healthcare outcomes as measured by statistics such as infant mortality are comparable to the US, despite being a much poorer country.