Capitalism: The Enemy of Poverty
Free markets, free minds and free people...
“Slowly, an international alliance has been forming among nations that… want to be free and believe in liberty.”
Javier Milei, at the WEF Congress of Vampire Demons in Davos, 2025
Joel Bowman with today’s Note From the End of the World: Carvoeiro, Portugal...
If you’re good news averse, today’s Note may not be for you.
But with inflation firmly crushed... the fiscal deficit eliminated... public spending slashed... millions rescued from grinding poverty... and the fastest growing economy in all of South America...
... it’s time for a quick update on the “sitcho” back home, in Argentina.
First, for those dear readers just joining us, we’re witnessing something many people thought we’d never see: a libertarian experiment in the most unlikely of places. For three-quarters of a century, the crooks and knaves in charge of the Argentine government did everything they could to burn the country to the ground.
Insidious price controls... market intervention... ruinous regulation... terrible trade tariffs... capital controls... money printing out the Keynesian wazoo... debts and deficits as far as the eye can see... and the familiar story of woe and misery which so predictably follows when good money goes bad...
Argentina tried it all. And what they got wrong, they tried, tried and tried again. Big State economics and Big Government politics introduced such a discombobulating thicket of malincentives, navigating one’s way through the labyrinthine maze of grift, corruption and public indoctrination was made perfectly impossible.
An Immoveable Feast
At the beginning of the century, public expenditure in Argentina accounted for more than a quarter of the nation’s entire economic output, as measured by the government’s own (highly spurious) GDP figures. By 2010, the State was swallowing up more than a third of annual economic output. Cometh 2020, that figure had risen to a glutenous 41.6%.
Like the mythological Ouroboros serpent, the ravenous State was feasting on its own tail... and consuming the lives and livelihoods of the long-suffering Argentine people along the way.
With so many reduced to penury – thanks to relentless waves of inflation and the ever encroaching mission creep of the welfare state – it looked as though the resource rich nation, once the envy of the developed world, was well on the Road to Caracas. Certainly, for Argentines who dreamed of a brighter future, voting their way out of the poorhouse appeared all but impossible, with the academies, state media, corporate interests and an entire political caste, all happily feeding at the public trough.
We’re now (roughly) a year-and-a-half into the aforementioned “libertarian experiment,” and plenty of results are coming back from the lab. To wit...
When Sr. Milei took office back in December of 2023, he famously told those gathered at his inauguration, “No hay plata.” (There is no money.)
Declaring war on Public Enemy #1, Inflation, the self-styled anarcho-capitalist president (who just happened to be an economics professor, well-steeped in the literature of both the Keynesian and Austrian Schools) implemented a range of measures designed to rein in government spending and slay the dreaded Leviathan.
Milei brought with him a raft of unpopular ideas and concepts... such as private ownership of the means of production... the notion that free people acting of their own volition should set prices, not the state... that individual parties to a contract should agree to terms of their own choosing, not dictated by a troop of bureaucrats and “experts” suffering from a conceit of knowledge such as they could never possess.
These ideas, and his trusty trademark chainsaw, he took to the world state...
"Free-market capitalism is the only tool we have to end hunger, poverty, and destitution across the entire planet,” Milei told attendees – shocked and galled, no doubt – at the World Economic Forum in Davos, back in January, 2024.
"The State is a criminal and violent organization, as it is financed through a coercive source of income called taxes,” he told a conference hosted by the Cato Institute and Libertad y Progreso, in April of 2024. “As Hayek said, ‘every time the State intervenes, it creates a worse outcome.’"
And then again, in his remarks at the G20 Vampire Summit, in November 2024: "I’ll say it again: the only thing that works to lift billions out of poverty is free-market capitalism… I’ll keep repeating it as many times as necessary, and wherever I must, because history is entirely on my side."
Ah, but how did they work out, these nutso ideas and whacky libertarian fantasies?
Going, Going, Almost Gone…
On the inflation front, numbers in just this week show a solid downward trend confirmation, with monthly CPI coming in at 1.6%. (It was 25.5% when Milei entered office.) Zooming out a bit, here’s a look at the annual trend...
On the wholesale front (often used as a predictive indicator by economists as it shows prices at the producer level, before they “come down the pike”), monthly inflation is now negative... meaning prices are actually doing something seldom spotted in the unnatural world of modern economics: they are coming down.
While providing something of a headache for political hacks, policy wonks and the editorial desks at most Establishment Newspapers, this trajectory is a huge sigh of relief for the poor folk at the bottom of the economic ladder, whom those conspicuously compassionate people in government hope never to have to meet in real life. Little surprise, then, that poverty in Argentina is declining in a big way... something “State Knows Best” advocates are loath to admit and slow to report.
Little Beating Hearts
The widely watched Nowcast Poverty Estimate, out of the Universidad Torcuato Di Tella (UTDT), shows a non-trivial decrease in poverty on the Pampas from 55.5% in the first half of 2024... to 31.6% in the first half of 2025. The lowest overall level since 2018 (and still falling), the decline so far represents 11 million human beings no longer living in grinding poverty.
This week, Unicef reported that chronic child poverty reached its lowest level in Argentina in almost a decade. What does that mean in terms of actual numbers and beating little hearts? Local paper, La Derecha Diario:
Child poverty decreased: 2.4 million children will no longer be poor in 2025
Chronic child poverty in Argentina stood at 12%, the lowest value recorded since 2016.
According to official estimates, the improvement trend will continue in 2025. It is projected that, between the first half of 2024 and the first half of 2025, child poverty will fall by 19 percentage points, which would mean an improvement in the living conditions of 2.4 million children.
Readers of these Notes will observe that the two phenomena – falling inflation and falling poverty rates – are not unrelated. The following graphs show monthly consumer price inflation (top) over the Nowcast Poverty Estimate (bottom).
Imagine that: lower prices positively impacting poor people in the real world!
Moreover, not only are these valuable young minds graduating out of crushing poverty... they’re also moving into an economy fashioned on freedom and individual liberty, replete with the guiding lights of free market capitalism and the inherent opportunities to thrive therein.
It is no accident that Argentina, the freest economy in South America, is now the fastest growing economy on the continent, too.
Down at the End of the World, the future appears brighter than ever. And that’s the good news, for those who can stomach it.
Stay tuned for more Notes From the End of the World...
Cheers,
Joel Bowman
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If only America could be a real free market - but the oligarchs, bureaucrats and banks don't want to allow the cleansing tide of true bankruptcy to clear the way for businesses that actually make things people want. Instead of BigTech and BigMedia and the ad sellers messing with our minds to get us to keep buying, and scrolling. Ban Chapter 11!
I wish we in the USA could more closely follow President Milei‘s example. I’m pretty confident we‘d experience similar results. But even when relatively meager attempts are made here to reduce the size of federal government bureaucrats, we seem unable to tolerate it. When 1300 employees from one agency were terminated (out of a total of 80,000), the reaction was telling. People were literally crying and wailing, held up by sympathizers, in the street upon exiting their previous place of employment. You’d have thought a school shooting had just happened and the person lost their child by the acts of a madman. Crowds lined the streets clapping and cheering in support of those laid off, and protesting the government layoffs. People sue the government and judges rule that government firings are unconstitutional. Boeing recently laid off 10% of its workforce, around 17,000 people, and there has been barely a whimper. No scenes of people having public meltdowns. I‘m guessing those laid off just cleaned out their desks, went home quietly, and began a new job search.