Free Markets, Free People

In defense of liberty and the world's smallest minority... the individual

Joel Bowman, with today’s Note From the End of the World...

Welcome to your front row seat for what we’ve been calling “The Greatest Political Experiment of Our Time.” 

In Tuesday’s installment, we shared some “ringside” Notes from the AynRandCon 2024 event, held here in sunny Buenos Aires, Argentina. 

Speaking as guest of honor to the ~150 unreconstructed freedom lovers in the room, your lost cause correspondent among them, was none other than the world’s first libertarian president, Javier Milei. 

(If you missed Part I of our coverage, as filtered through loose translation, convenient paraphrasing and no small measure of poetic license, feel free to catch up here: Milei Up Close.)

In today’s sequel, we navigate the brackish waters between salty economics and potable political philosophy (or is it the other way around?), dodging Scylla and Charybdis alike as the ocean swirls beneath our dangling...modifiers. 

When we left you, our gracious hostess, María Marty, had just broached the “S-word” (socialism), to which a visibly energized Milei responded...

“The ideas of freedom are stronger, stronger than the damned political caste. Because of this, I cannot stop. And I promise, I will not stop.”

A Matter of Conviction

The question, upon which the “S-word” had enjoyed (ironically enough) a well-earned ticket into the conversation, pertained to those steeped in its long and sorry legacy.

How might one espousing the ideas of freedom as a way of life, who advocates for cooperation over coercion, for voluntarism over violence, persuade those whose eyes have been blinded to collectivism’s measurable, demonstrable, empirical pitfalls? 

After all, voters in Latin America (and elsewhere) have long been led to accept socialism as a benign and even necessary condition for wellbeing. Led astray by its euphemistic circumlocutions – “Hey, aren’t we all ‘social’ creatures?” – millions have been convinced that “cradle-to-grave” socialism is merely a more comfortable ride when, all too often, it’s an express ticket. 

The first task of any complex undertaking, counseled Milei, was to identify the goal itself.

“If you don’t know where you want to go, you will never get there,” he remarked, before adding, “The most important part, once you have identified what you want, is your conviction.”

Cue the promise to forge ahead, against the “political caste,” which was duly met with loud applause from the attendees. Laying out a roadmap, Milei then outlined clearly where he wanted to go...

According to his plan, if Argentina were to implement the ~1,000 structural reforms introduced by Milei’s administration – one third of which are outlined in the Decreto Nacional Urgencia (DNU); the remaining two thirds in the giant Ley Omnibus, both of which are being hotly negotiated in the nation’s congress as we type this Note – over the next twenty years, Argentina will, by El Señor’s reckoning, jump 90 places on the global rankings of economic liberty. 

That would put Argentina on a similar footing to Germany. “But for me, this is insufficient,” declared the president. “I want to aim for something more like Switzerland, like Ireland.” 

Why Ireland? Good question, dear reader. We wondered the same thing...

“Ireland has a GDP per capita that’s almost 50% higher than in the United States,” Milei said, almost off the cuff. We checked... see below:  

(Source: IMF)

The “Political Caste”

Alas, as we’ve observed many times in these Notes, not everyone is on board with the Freedom Express... especially those invertebrate politicos who, with Faust’s own rope, have tied themselves firmly to the tracks. Staying on brand, Milei was unreserved for his criticism of la casta (the political caste).

“You hear a lot of politicians in this country who say they want change, who have politics in their mouths. But they don’t want change. Not really. They have their fingers on the markets. They depend on the system. In reality, they want to maintain the status quo, they want to maintain their privileges.”

Here Sr. Milei made a distinction worth underscoring... between that of being “pro-business” versus being “pro-market.” 

The former entails a form of meddling, of playing favorites, of pitting one company or sector against another, usually by some combination of carrot and rod – subsidies for some, taxation for others, and endless regulation for all. It is the fat finger on the scale, which all too often tips the profits into well-connected pockets. 

The latter, conversely, involves concerted noninterference. It’s the book Bernanke did not write: The Courage Not to Act. It’s leaving the market alone – the essence of laissez-faire – to forge a path itself. 

Milei pointed to the Herculean strides his administration had made against what many argue is the country’s number one challenge: inflation. This he achieved by not printing more money... by not spending more than the government took in... by not funding massive, make-work boondoggles on the government’s centavo.

“We are not achieving all this thanks to your politicians, your congressmen” said Milei, “we are achieving it despite them.” 

Again, it’s still very early in the game... but preliminary data augurs well. From ~25% month over month inflation through January, to ~20% in February, to ~13% in March... and a projected ~12% through April (official data out tomorrow)... the trajectory is inducing cautious optimism, even among the wettest blankets.   

“Today, 70% of Argentines are convinced that we are going to bring down inflation,” Milei told attendees. “They have no doubt. And I am going to say something: they are right. We are going to bring it down.”

Milei spoke about future expectations, combined with structural monetary and fiscal change implemented by his administration, causing a collapse in “la tasa de inflation” (essentially a basket of goods that consumers see at the checkout, what in the US would be measured – read: mismeasured – in the CPI reading). 

“When we govern, we think in three dimensions. We think very clearly. One line is economics, obviously this is a question of my profession [Milei was an economist in the private sector before entering politics]. Another is the political line of thought, how to get things done. The other is a matter of fighting the cultural battle. 

When pressed on how, in the face of overwhelming evidence that socialism does not work, that it leads only to poverty, millions of death and destruction as evidenced by much of the past century, people can still believe in it, Milei reflected:

“Because socialism is a sickness of the soul worse than the very worst cancer. When it is implemented completely, economically, politically, you get 150 million deaths. The worst dictators of the past century, they were all socialist.”

The Moral Case for Capitalism

Marx didn’t publish a sequel to Das Kapital, explained Milei, because Carl Menger, the father of Austrian School economics, published his own work, utterly destroying the idea of the labor theory of value. (Menger argued that a good or service is valuable only so far as free individuals determine it to be so, based on its utility, as opposed to how many factory hours went into its production. Value is not in the good itself, he observed, it is within us.)

Socialists needed the labor theory of value, continued Milei, on which to base their entire claim of worker exploitation by the greedy owners of the means of production, the dreaded capitalists. Behind this theory, thoroughly eviscerated, lay the envy, the contempt, the hate, the resentment that kept time for their Long March of Grievance.   

“Without it, they had nothing,” he concluded. “To admit this, to confess it, meant admitting total defeat.” 

It also meant hard work, individual responsibility, the capacity for resilience, for enterprise... and other characteristics considered by the callous-free collectivist class to be “icky.” 

Free market capitalism, Milei reasoned, does not guarantee success... it only provides the opportunity to achieve it, just as the US Constitution does not guarantee happiness, but rather recognizes an individual’s right to pursue it after his own fashion. 

Invited to expound upon his World Economic Forum speech concerning the inherent heroism of the entrepreneur, which drew no shortage of comparisons to John Galt’s speech toward the end of Ayn Rand’s novel Atlas Shrugged, Milei returned to a familiar canard of the terminally oppressed...

The socialists say, “Ok... fine, capitalism is the most productive wealth producing system we have. The problem is that it is unjust. It produces unequal results. It needs to be ‘fixed,’ ‘adjusted.’ Oh, and we’ll do the adjusting…” 

The Market is Us

Moving swiftly from Locke to Hayek to Israel Kirzner, Milei relayed the idea, a torch of liberty passed down through the perilous cave of intellectual darkness spanning the ages, that it is the market, itself, which fixes and adjusts, though the ongoing process of price discovery. 

There is no final price. No set rate, not for labor, for goods, for credit or anything else. No such thing – imagined by the great meddlers and their irksome ilk – as permanent, market stasis. On the contrary. The market responds to new information in a way that no government, no committee, no cadre of bureaucrats ever could; with trillions of dynamic, real time adjustments, each weighing a fraction of an atom, and based on the expressed desires of eight billion (and counting) individual human beings, spontaneously ordered in the grand concert of life.

The market is not some vague abstraction, some theoretical entity, the bottom line of an equation on a blackboard in some stuffy economics class. The market is us. It is all of us. (It is no mere coincidence, astute readers will notice, that we choose as our tagline here at Notes, “Free markets, free minds, free people.”) 

As “we are the market,” it stands to reason that, so long as the market is free... we are free. A captured market means a captured people. A state controlled market implies state controlled people. 

It is not only a question of productivity, therefore, but a question of morality. The capitalist system is not only the most efficient, not merely the most just, it is also the only system that observes the unalienable rights of the world’s smallest, most persecuted minority – the individual – to flourish and to succeed, to pursue life, liberty and happiness on his own terms.

The notion was summed up in Sr. Milei’s signature, closing declaration:

“Viva la libertad, carajo!” (Long live liberty, damnit!)

Stay tuned for more Notes From the End of the World...

Cheers,

Joel Bowman

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