Two Paths Diverged

On individualism vs collectivism...

(Image: Substack AI)

“I hold it to be the inalienable right of anybody to go to hell in his own way.”

~ Robert Frost (1874-1963)

Joel Bowman with today’s Note From the End of the World: Buenos Aires, Argentina...

Two paths diverged in a yellow wood... which would the leaders of the “free world” take?

One, bent in the undergrowth, more travelled by... on which lay the black-trodden leaves of corruption, inflation and top-down collectivism?

Or the other, lesser known, where dreamers, utopians and unreconstructed anarcho-capitalists dare envision a future of private property, individual rights and voluntary, free market exchange?

More anon...

¡Feliz Finde!

It’s a rainy old day here in Argentina’s capital. Granite skies hang heavy over the city’s iconic cupolas. Jacaranda flowers, sodden with spring showers, carpet the sidewalks in regal purple. Cafés and bars stand mostly empty.

And, as is typical here, all activity that might conceivably be affected by the weather (and plenty that cannot) has been canceled. We often wonder if our porteño friends are secretly part witch.

Still, we run our errands, as on any other day. The carnicero cuts our steaks, thick and juicy. The mother and daughter team at the verdularía upsell us on seasonal stone fruit (peaches, plums and delicious Christmas cherries).

And the friendly lady at our local cueva (money exchange, or “cave”) greets us with her usual smile.

“Lo de siempre?” she correctly guesses our “same as always” amount. We nod as she counts the US bills by hand... then runs the peso notes – denominated in 10,000s and 20,000s – through the electronic money counter.

“¡Feliz finde súper largo!” she wishes us a happy extra long weekend.

Argentines will take off Friday and Monday. The latter for “National Sovereignty Day,” the former for [hmm... quick Google search] a “tourism ‘puente’ (day off) to encourage domestic travel.”

So, it’s not just the rain then...

Shrinking Inflation

And yet, despite their stubborn refusal to promote purely commercial interests over sacred family time... and though they may lack the unwavering commitment to menial tasks that makes China such a miserable economic powerhouse... along with the punctuality and early morning optimism that makes us night owls wake in cold sweats...

... the Argentines are yet enjoying something of an economic renacimiento (rebirth) of late. What gives?

It could be this has something to do with it:

These are the latest “core inflation” numbers, for the month of October. The three main measures were up 1.1, 1.3 and 1.7% on the previous month, measuring between 24-26% annualized. For reference, this was the picture in December, 2023, when the voters here gave the Peronists the old heave ho and voted in the “utopian” libertarians...

Economía Loca

Back then, wholesale prices were accelerating at a rate of more than 50% per month... meaning the trailing annualized figures you see there, between 260 and 276%, were about to be blown out of the water.

As budding bubble connoisseurs well know, core inflation (which measures wholesale prices), tends to lead consumer inflation (which measures retail prices). On the retail side, consumers have seen price inflation settle down to around 2% per month for the past quarter. The above figures are in line with projections that retail inflation will fall to around the 1% range by the end of the year.

All of which is to say, stable prices... a relatively reliable currency... one that is not burning a hole in your pocket. The ability to plan... to invest... to save for the future without the very rational fear that the State will gouge your earnings through the “sneaky tax” of inflation.

That’s one. Two... economic growth. Not the kind “driven,” “conducted,” “managed” or otherwise “overseen” by some enlightened class of bullying know-it-alls that plays favorites with this business at the expense of that one, but by real people with real ownership in the means of production answering to the real demands of their fellow human beings. (Crazy, right?)

Just on that front…

Trade Tariffs and Own Goals

Rather than continue a failed, 75-plus year policy of trade tariffs, taxes, duties and regulatory bureaucracy, the “path less traveled” administration has instead cut red tape, slashed taxes on imports and exports and sought to ink mutually-beneficial trade agreements with strategic international partners (including, most recently, the world’s largest consumer economy, the USA).

As part of this, the RIGI investment initiative offers significant tax reductions for large-scale (minimum $200M) projects in Argentina’s vast energy and mining sectors. According to local newswire, Infobae:

One year after the approval of the Incentive Regime for Large Investments (RIGI), the program has 20 projects submitted, totaling USD 34.422 billion, according to the report from the Center for Global Governance Studies (CEGG) of the Austral University.

All while public spending (aka State-sponsored intervention) has fallen to the lowest levels since 2007... so far.

As one astute poster on X asked, “Is this not possible in the USA?”

Hmm... less government, less meddling, and less public spending leads to more confidence, more growth, and more prosperity for all.

As for private property, individual rights and voluntary, free market exchange, it is a path less travelled, for sure... but it might be one worth considering.

As always, stay tuned for more Notes From the End of the World...

Cheers,

Joel Bowman

P.S. As always, a giant thanks to our dear Notes members, whose kind support keeps our laptop charged and our glass half full.

If you’re not already a Notes member, you can join our motley community of freedom lovers, independent thinkers and cheerful skeptics, below. For less than 20 cents a day, we do our best to make it worth every penny. Cheers ~ JB