Tag: Argentina

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free trade & free markets international affairs repeal

The Milei Option

Argentina, socialism, communism, Milei, president, economy

Argentina’s new president promised to take a chainsaw to the high taxes and controls that have been killing the country’s freedom and prosperity.

He has had successes. One of his decrees removed rent controls, and as a result the supply of rentals has jumped and rents have dropped.

But Milei cannot simply issue decrees to free up markets. He’s got to go through the legislature. And Argentina’s Senate recently rejected a mammoth Milei-issued emergency decree to deregulate the economy apparently in one fell swoop—revising or killing some 300 regulations.

The Financial Times reports that Milei’s coalition, La Libertad Avanza, “controls less than 10 per cent of Senate seats.” Many of the “centrist” senators could have helped pass Milei’s reforms over the objections of the adamantly leftist members. But these centrists profess to have constitutional reservations about the decree.

The real problem is probably that there is still a very large constituency for the subsidies and grift that have impoverished so many Argentinians.

The decree remains in effect until the House votes on it too. Milei’s administration is negotiating with the lawmakers of that chamber and with others who may have an impact on their vote.

If President Milei loses this fight in the near term, he must keep reminding voters why he can’t do more to lift them out of poverty and serfdom. His election to the presidency was a huge political change. But it’s not the only one Argentina needs.

This is Common Sense. I’m Paul Jacob.

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Accountability deficits and debt international affairs

The Shock of Surplus

Rooting for Argentina and President Milei

The current president of Argentina is an avowed “anarcho-capitalist.” He isn’t really — but close enough for government work.

It’s more accurate to say that Javier Milei is a capitalist and libertarian. He has taken on the job of extricating the Argentinian economy from the mire of socialism and corruption — unleashing outlawed market processes.

He seeks to do it not by pushing for micro-changes around the edges of the margins of government spending and intrusions but by figuratively wielding the chainsaw that he literally wielded during his election campaign.

One sign of the success of his “shock therapy” cited by The New York Sun is the “first budget surplus in more than a decade.” A monthly surplus of almost $600 million is the first surplus since the summer of 2012.

But, the Sun quickly adds, Milei’s various radical proposals still face an uphill battle in the legislature. All those people who created the mire are still around.

There are hopeful signs. The lower chamber has already passed a preliminary or framework agreement to make various basic reforms. These include privatizing of currently state-operated companies, deregulation, and revamping of criminal and environmental laws.

The lawmakers “chose to end the privileges of the caste and the corporate republic, in favor of the people,” Milei says.

Meanwhile, though, egged on by unions, thousands of Argentinians have taken to the streets in a general strike to protest the reforms. Milei can win, but it won’t be easy.

This is Common Sense. I’m Paul Jacob.

PREVIOUS COMMENTARIES ON JAVIER MILEI

Milei Defends Capitalism
January 24, 2024

Market Rents Work in Argentina
January 23, 2024

Milei’s Chainsaw
January 6, 2024

To End the Great Declension
December 13, 2023

The Outsider Who Won
November 20, 2023

The Ultimate Outsider
October 24, 2023

Two Libertarians, North and South
September 19, 2023

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Milei Defends Capitalism

Argentina, Javier Milei, Capitalism, WEF

Capitalism is better than socialism.

The new libertarian president of Argentina, Javier Milei, recently explained the virtues of the free market to attendees of the annual World Economic Forum in Davos, Switzerland.

Milei said that capitalism generates “an explosion of wealth,” that capitalism and the industrial revolution “lifted 90 percent of the world’s population out of poverty,” that a free market society is both practical and just.

“Far from being the cause of our problems, free enterprise capitalism as an economic system is the only tool we have to end hunger, poverty, and destitution across the planet. The empirical evidence is unquestionable.”

As its answer to the practicality and justice of a capitalist social system, the left proposes the injustice of “social justice,” according to which “capitalism is bad because it is individualistic” and “collectivism is good because it is altruistic.”

Collectivism hobbles the entrepreneur and “makes it impossible for him to produce better goods and offer better services at a better price.” Which only impoverishes us. This is neither practical nor moral.

The West is in danger because it is allowing capitalism to be destroyed. We need to remember why we need it.

Will any of the dignitaries who heard Milei’s talk learn its lessons? Maybe not if they’re like WEF’s founder, Klaus Schwab, who looks at the international predations of the Chinese Communist Party and sees a “responsible, responsive” state.

But maybe a few others will. And then a few more.

This is Common Sense. I’m Paul Jacob.

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Market Rents Work in Argentina

Argentina, housing, flag, freedom

Markets work and markets for housing work.

This is what the new president of Argentina, Javier Milei, has sought to confirm by means of radically free-market economic policies. He is going as far as he can as fast as he can to make Argentina a freer and more prosperous country.

Can he succeed in the long run?

Many exploiters of the socialist status quo ante are bitterly opposed to his reforms and hope to undo them. We’ve seen before how quickly a relatively anticapitalist administration can kill the freedom-expanding reforms of a relatively procapitalist one.

But at least for now, Milei is proving his point, as witness the market for apartments in Buenos Aires.

The Buenos Aires newspaper El Cronista reports (with the help of Google Translate) that with the end of rent controls, the supply of rental units in Buenos Aires has doubled and prices for units have fallen by around 20%. The paper cites data by the Argentine Real Estate Chamber and the reports of brokers.

Under rent control, by 2023 the supply of rentals had shrunk to just 400 units. “Today we have a stock of more than 800 apartments, and it is growing day by day,” says Alejandro Bennazar, a director at the Chamber.

Eight hundred units is still low given the size of the capital city, but there’s light at the end of the tunnel. Getting rid of the controls caused supply to double instantly. An excellent start.

This is Common Sense. I’m Paul Jacob.

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general freedom international affairs national politics & policies too much government

To End the Great Declension

Argentina, Javier Milei, money, inflation, government

“Today begins a new era in Argentina,” said Javier Milei in his inaugural address as the new president of Argentina. “Today we end a long and sad history of decadence and decline and begin the road to the reconstruction of our country.”

President Milei has focused on a problem — the decadence of mass poverty — and identified it with a basic view of government: interventionism in markets, central control and bureaucratic proliferation. These, once established, start a cycle that must end in decay, decline. “The outgoing government has left us with hyperinflation, and it is our top priority to make every effort to avoid a catastrophe that would push poverty above 90 percent and indigence above 50 percent,” he explained.

Milei is not hesitant; gradualism’s not his bag, for the country does not “have margin for sterile discussions. Our country demands action and immediate action.”

At some point, the argument runs, you have to boldly cut government. Not just cut the rate of government growth, which is about all American Republicans have achieved — often allowing others to take the credit, as with Bill “The Era of Big Government Is Over” Clinton.

Milei’s first act as president was an executive order reducing the number of government ministries from 21 to nine. If this move actually succeeds in paring down the size of Argentina’s state apparatus and workforce, it will be something of a miracle.

In a country that needs miracles. 

Here in these United States, we may not have hyperinflation, as such, but we do face a crisis. The deficits are persistent, and majorities in both parties seem utterly unconcerned about the $34 trillion debt, rushing at us fast. Costing more to service than we spend on defense.

Only Vivek Ramaswamy has pushed specific ways to cut government.

But, unlike Milei in South America, here in North America Vivek’s just not that popular.

This is Common Sense. I’m Paul Jacob.

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Protesting “Capitalism”?

While Americans appear mildly unsettled or perhaps “ticked off” about recent government revelations, elsewhere in the world citizens move from “unease” to “unrest” and outright “protest.”

The protests that erupted first in Turkey and now in Brazil and elsewhere are filled with the ranks of the young, not a few of whom have noticed something: They are getting a raw deal.

Many of their issues are meat-and-potatoes: lack of jobs, burdensome student debts and, in Brazil, a bus fare rate increase made ugly in the context of cost overruns in taxpayer support for the World Cup and Olympics.

The young Turks protested, at first modestly, over planning for a park, but a harsh police crackdown led to more widespread marches, sit-ins, and demonstrations — which now often bring up questions of the current administration’s repressive anti-modernist, anti-freedom agenda.

This more heroic theme resonates elsewhere, too.

In Bulgaria the issue most protested appears to be police brutality and the general spirit of repression. In Latin America, opposition to corruption has moved from old stand-by to vital question of the day.

The saddest statement I heard was this appraisal, hailing from the BBC, of the general climate: “today capitalism is becoming identified with the rule of unaccountable elites, lack of effective democratic accountability, and repressive policing.”

Well, that’s not laissez faire capitalism that’s failed, but crony capitalism. Laissez faire’s truly free markets require a rule of law, the suppression of government corruption, and effective public accountability.

But that’s not what’s dominant. America itself serves, today, not as a beacon of liberty but of institutional control, of crony capitalism.

We need to protest that here, again, in the U.S.

This is Common Sense. I’m Paul Jacob.