Argentine President Javier Milei’s address to the World Economic Forum was, as you’ve no doubt heard, a real corker. The principles of classical liberalism have not been so vehemently promoted on the world stage since the Gipper and Margaret Thatcher left office. If the Falklands could be offered as a prize for best speech, I’ve no doubt the Iron Lady would consider it.
In peppery Rioplatense Spanish, he laid out the basic arguments for the economic and moral superiority of free peoples. He slammed “collectivists” and “parasites” who have been tinkering with state-backed regulatory schemes for decades:
We’re here to tell you that collectivist experiments are never the solution to the problems that afflict the citizens of the world. Rather, they are the root cause. Believe me: No one is better placed than we Argentines to testify to these two points.
And of course, he’s right. The Peronist model of macroeconomic planning directed from the central corridors of Buenos Aires has brought Argentina low, from mid-range global rankings of regulatory weight to 158th in the last 23 years. This means Argentina is now in the ranks of the worst five percent of nations for economic freedom, with deplorable measures on openness to trade, monetary policy, and property protections. Argentina was once in the top tier of the richest nations of the world, now it rubs shoulders with the likes of Libya, Serbia, and Mauritius.
Milei pulls no punches in explaining why this precipitous fall occurred. He lays the blame squarely at the feet of “Neoclassical” economic theorists, who set their faith in “a set of instruments that, unwillingly or without meaning to, end up [promoting] intervention by the state, socialism and social degradation.” Moreover, he says, the Neoclassical statists remain immune to the evident weaknesses in their models:
…faced with the theoretical demonstration that state intervention is harmful — and the empirical evidence that it has failed couldn’t have been otherwise — the solution proposed by collectivists is not greater freedom but rather greater regulation, which creates a downward spiral of regulations until we are all poorer and our lives depend on a bureaucrat sitting in a luxury office.
All of this is music to classical liberal ears, to be sure, but what made the speech especially welcome was the alternative vision he offered. Rather than simply bemoan the poor policies of Peronist statism, he laid out precisely why the alternative to statism — liberated markets — can offer so much more. A recurrent theme in his speech was the power of freely interacting peoples to establish the profound process of “discovery” in the Hayekian sense (citing Israel Kirzner).
The market is a discovery process in which capitalists will find the right path as they move forward. But if the state punishes capitalists when they’re successful and gets in the way of the discovery process, [it] will destroy their incentives, and the consequence is that they will produce less. The pie will be smaller, and this will harm society as a whole. Collectivism, by inhibiting these discovery processes and hindering the appropriation of discoveries, ends up binding the hands of entrepreneurs and prevents them from offering better goods and services at a better price.
This is such a critical insight. For complex, inherently unmanageable systems like the interactions between billions of individuals, “discovery” is not merely a quaint feature, but an absolutely necessary component for societies to work well. For elegant spontaneity to emerge and coordinate resources between free individuals, those actors must be able to communicate openly and accurately (including via prices). When bureaucracies attempt to “correct” this process, or even to merely tweak its efficiency, they inevitably stifle the very mechanisms that make it work in the first place. When Argentina attempted to “protect” its farmers and consumers by setting price controls, it in fact prohibited them to from communicating accurately. These “distorted agricultural policies” forced farmers to produce only what government subsidies led them to produce, while consumers were left wondering why goods became more expensive and less available. Milei correctly points to the stifling of market discovery signals as the single greatest factor in Argentina’s woes.
The World Socialist Website has, true to form, branded Milei’s remarks as an “outright fascist rant.” For them, Milei’s association of “heroism,” “capitalism,” and “morality” is as loco as the ravings of a Mussolini or a Hitler. Which is weird, because it’s hard to imagine remarks any less fascist: Milei rails against state coercion, state control of industry, and state restrictions on the free choices of liberated, peaceful, prosperous citizens. All of these are hallmarks of real fascism, which differs little from the kind of socialism the World Socialists promote. This kind of socialist worries about Milei’s warm reception at Davos, in case it represents a distinct “shift within the ruling elites” away from the centralized, socialized management model.
Chairman of the World Economic Forum Klaus Schwab, not generally known as a champion of the undirected activities of free peoples, introduced Milei to the podium. He noted that though “radical,” Milei has introduced “a new spirit to Argentina, making Argentina much more related to free enterprise, to entrepreneurial activities.” Whether this represents any sort of shift at the WEF remains to be seen, but it seems safe to say that Javier Milei has discovered, if nothing else, how to get the world’s attention.
