Javier Milei: "My contempt for the state is infinite"(economist.com)
economist.com
Javier Milei: "My contempt for the state is infinite"
https://www.economist.com/leaders/2024/11/28/javier-milei-my-contempt-for-the-state-is-infinite
82 comments
https://archive.ph/lpNox
Argentina has a population pyramid that actually looks like a pyramid hence why they could elect such a radical change of route. In this decade europe , east asia and even the US might be confronted with the issue of sustaining societies without a lot of capital or investment or workers. I wonder if they will take a page from Argentina (the US already did)
countries are not taking a page from Argentina. countries are taking a page from the United States electing someone like Donald Trump.
https://www.scienceofrunning.com/2017/05/the-roger-bannister...
the Roger Bannister effect
https://www.scienceofrunning.com/2017/05/the-roger-bannister...
the Roger Bannister effect
Trump's priority in 2016 was not deregulation, in 2024 it is. Hmm.
The first buddy Musk seems much more interested than Trump is.
If Trump were taking notes from Milei, he wouldn't be looking to raise tariffs
https://x.com/LibertarianDuty/status/1855530065922023888
https://x.com/LibertarianDuty/status/1855530065922023888
This feels like an oversimplification of their priorities. Many right wing politicians are pro-deregulation. Trump also ran /did act on deregulation (or weakening) of certain agencies in his first term as well.
I think it’s moreso during hard economic times. Telling constituents youre going to “axe wasteful government spending” is a very viable strategy for winning elections.
I think it’s moreso during hard economic times. Telling constituents youre going to “axe wasteful government spending” is a very viable strategy for winning elections.
What people don't talk about is that the good things the new administration achieved came with a big price: an expected drop of close to 4% in GDP. With the expectation of recovering it fast next year. So next year is the turning point for Milei, if the recession ends or intensifies. A shrinking economy with smaller inflation but in recession is worse than a growing economy with higher inflation.
Also the GDP drop should be bigger but the previous year there was the worst drought in the country's history and it relies heavily on agriculture so the economy was already in a terrible state with a paralyzed and incompetent president at the time. Now the agrobusiness is growing strong (compared to the terrible previous year) but not enough to balance against the recessive economic measures to reduce state spending.
Also the GDP drop should be bigger but the previous year there was the worst drought in the country's history and it relies heavily on agriculture so the economy was already in a terrible state with a paralyzed and incompetent president at the time. Now the agrobusiness is growing strong (compared to the terrible previous year) but not enough to balance against the recessive economic measures to reduce state spending.
The evil is in the details. The inflation rate pre-Milei distorted economy to the point where any meaningful model based on Austrian or Keynesian or whatever ideas was impossible.
Almost everyone I know and all newspapers I read here, in Argentina, do talk about that. The cost is an inevitable one when you reach 3 digits inflation. Hope we learn our lesson though we didn't in the 2000s when we brought inflation again.
To give anyone reading this perspective, Argentina had inflation for almost 80 years, only a brief pause in the 90s and then again since the 2003. What other way is there?
To give anyone reading this perspective, Argentina had inflation for almost 80 years, only a brief pause in the 90s and then again since the 2003. What other way is there?
> What other way is there?
Remember that inflation is something the government chooses to create. It's not some natural disaster.
The other way is to remove the power to create it from the executive leader and give it to some institution that is more stable.
Remember that inflation is something the government chooses to create. It's not some natural disaster.
The other way is to remove the power to create it from the executive leader and give it to some institution that is more stable.
Of course but once you have 3 digits inflation, what other way to reduce is there besides cutting the supply of money suddenly in a shock? People won't like it, I didn't like it either but the two other presidents tried various methods such as price controls and that didn't help, on the contrary.
If you have long-lasting inflation, you need some shock to cut it. But reducing the supply of money only does shock, it's keeping it constant over the long term that avoids inflation.
And well, price control never works. This is well known. It's also well known that Argentina's last few presidents were people that wouldn't let patently known and unavoidable facts get in the way of their policies...
And well, price control never works. This is well known. It's also well known that Argentina's last few presidents were people that wouldn't let patently known and unavoidable facts get in the way of their policies...
There are alternatives. Brazil fixed the hyperinflation problem in a different way, maybe Argentina should copy it:
https://www.npr.org/sections/money/2010/10/04/130329523/how-...
previous discussion: https://news.ycombinator.com/item?id=9617710
previous discussion: https://news.ycombinator.com/item?id=9617710
Brazil pretty much did a monetary shock by reducing the money supply. Just like Milei.
We did more stuff besides the shock. But we also had more inflation, and it was more persistent.
We did more stuff besides the shock. But we also had more inflation, and it was more persistent.
When in borderline hyperinflation, the GDP number is meaningless.
Also, a shrinking economy with normal inflation is better than a growing economy with hyperinflation, because that second is never really growing, just the meaningless number is going up.
Also, a shrinking economy with normal inflation is better than a growing economy with hyperinflation, because that second is never really growing, just the meaningless number is going up.
GDP calculation takes inflation into account otherwise even now the "meaningless number" would be growing with Milei.
The inflation calculation is the one that doesn't get the inflation correctly into account. That's because it always have errors, and those errors grow more than linearly with the inflation rate.
Let's not forget the social numbers.
Reuters:
BUENOS AIRES, Sept 26 (Reuters) - Argentina's poverty rate rocketed to 52.9% in the first half of 2024, the government's INDEC statistics agency said on Thursday, surging from 40.1% a year earlier.
https://www.reuters.com/world/americas/argentina-poverty-rat...
Reuters:
BUENOS AIRES, Sept 26 (Reuters) - Argentina's poverty rate rocketed to 52.9% in the first half of 2024, the government's INDEC statistics agency said on Thursday, surging from 40.1% a year earlier.
https://www.reuters.com/world/americas/argentina-poverty-rat...
He explained that on Lex Fridman's podcast.
https://www.youtube.com/watch?v=8NLzc9kobDk
https://www.youtube.com/watch?v=8NLzc9kobDk
Beyond the traditional dichotomy of right and left, it's always insightful to contrast real politics and media narratives with reality. Javier Milei is introducing several changes in Argentina, but it will take time to assess their effectiveness. As of now, some key issues remain:
- The USD/ARS exchange rate is still tightly controlled by the state, which is neither libertarian nor liberal in practice.
- There are no significant incentives for exports. Only imports.
- Many Argentinian unicorns and startups are incorporated abroad (e.g., in the US) and show no intention of returning.
Moreover, Milei has proposed appointing a highly corrupt judge, Ariel Lijo, to the Supreme Court [1].
On a smaller scale, when my offices in Argentina needed to import three laptops for software engineers, the shipment was blocked due to the mail courier limit of USD 1,000. This cap is now being raised to USD 3,000, but such constraints highlight the ongoing barriers to conducting business.
[1] https://es.wikipedia.org/wiki/Ariel_Lijo
- The USD/ARS exchange rate is still tightly controlled by the state, which is neither libertarian nor liberal in practice.
- There are no significant incentives for exports. Only imports.
- Many Argentinian unicorns and startups are incorporated abroad (e.g., in the US) and show no intention of returning.
Moreover, Milei has proposed appointing a highly corrupt judge, Ariel Lijo, to the Supreme Court [1].
On a smaller scale, when my offices in Argentina needed to import three laptops for software engineers, the shipment was blocked due to the mail courier limit of USD 1,000. This cap is now being raised to USD 3,000, but such constraints highlight the ongoing barriers to conducting business.
[1] https://es.wikipedia.org/wiki/Ariel_Lijo
Regarding you first point, that's expected to change sometime during next year. Let's hope they keep their word.
Personally I don't think it would have been a good idea to let the value of the USD run free. If Milei and co. had done that from day one everyone would have rushed to buy dollars.
My 2 cents: I like that inflation is lower than ever, and hope that it keeps going down. I want our currency and country to be more stable. I want it to be viable, and believe we are on our way to achieving that.
Personally I don't think it would have been a good idea to let the value of the USD run free. If Milei and co. had done that from day one everyone would have rushed to buy dollars.
My 2 cents: I like that inflation is lower than ever, and hope that it keeps going down. I want our currency and country to be more stable. I want it to be viable, and believe we are on our way to achieving that.
> Personally I don't think it would have been a good idea to let the value of the USD run free. If Milei and co. had done that from day one everyone would have rushed to buy dollars.
You are, of course, free to express your opinion. However, the issue I see with your argument is that if a libertarian, pro-Austrian economics government decides to control the USD/ARS exchange rate, it contradicts the principles on which they were elected. This is not what the people voted for.
You are, of course, free to express your opinion. However, the issue I see with your argument is that if a libertarian, pro-Austrian economics government decides to control the USD/ARS exchange rate, it contradicts the principles on which they were elected. This is not what the people voted for.
In Argentina, this pro-Austrian economics government which has severe limitations in terms of law, regulations, and the heavily destroyed general economy of the country, does not have enough freedom to swiftly change things to "what ideally should be".
You have to thoughfully begin to implement changes in order for them to take place in the precise step-by-step order to actually change stuff towards an actual free market economy, and at the same time not just blowing up society's political support.
You cannot just make a jump from 40 to 80% of general poverty promising somewhere in the range from 5 to 15 years they begin to recover their previous economic statuses.
In Argentina, there is even a time constrain: 36 months precisely, after this the society's processes for a general election for presidency begin, and if the current government hasn't achieved enough success in the general population's opinion, one year later, it is not anymore the government.
Hence Milei is just going the fastest he can through the explained process.
I think the people voted a political leadership with enough empaty to understand they cannot just crush the population with free markets policies given the atrocius consequences of doing so without the minimal pre-conditions previously achieved.
You have to thoughfully begin to implement changes in order for them to take place in the precise step-by-step order to actually change stuff towards an actual free market economy, and at the same time not just blowing up society's political support.
You cannot just make a jump from 40 to 80% of general poverty promising somewhere in the range from 5 to 15 years they begin to recover their previous economic statuses.
In Argentina, there is even a time constrain: 36 months precisely, after this the society's processes for a general election for presidency begin, and if the current government hasn't achieved enough success in the general population's opinion, one year later, it is not anymore the government.
Hence Milei is just going the fastest he can through the explained process.
I think the people voted a political leadership with enough empaty to understand they cannot just crush the population with free markets policies given the atrocius consequences of doing so without the minimal pre-conditions previously achieved.
My two cents even tho I'm afraid this thread might become a political battleground:
I'm from Argentina and 30 years old, of course he led us to a recession but for the first time in my adult life I can keep prices in my head and I know next month they'll be pretty much the same. Some people who never experienced +10% inflation in a month can't even imagine that and I understand it. I for one like this stability, dunno.
Regarding your second paragraph, I work for a US company as well and I've been dealing with the mess that is just getting your hard earned money here. Only few people are aware that we still are mandated to change our dollars for pesos at the rate that the government says. Of course nowadays it's not that bad because that rate is almost the same as the one you get in the famous "cuevas", the black market exchange places. But in 2022-2023 sometimes the difference between those two were almost 100%. So you had to deal with tons and tons of cash, it was a nightmare.
I'm from Argentina and 30 years old, of course he led us to a recession but for the first time in my adult life I can keep prices in my head and I know next month they'll be pretty much the same. Some people who never experienced +10% inflation in a month can't even imagine that and I understand it. I for one like this stability, dunno.
Regarding your second paragraph, I work for a US company as well and I've been dealing with the mess that is just getting your hard earned money here. Only few people are aware that we still are mandated to change our dollars for pesos at the rate that the government says. Of course nowadays it's not that bad because that rate is almost the same as the one you get in the famous "cuevas", the black market exchange places. But in 2022-2023 sometimes the difference between those two were almost 100%. So you had to deal with tons and tons of cash, it was a nightmare.
> I'm from Argentina and 30 years old..
There’s a saying: “In Argentina, everything changes every day, but if you come back after ten years, nothing has changed.” In your case, you were born around 1994. Until you were about six years old, if you went to the supermarket with your family, you could probably keep track of prices in your head. By the time you were 16, the inflation rate was likely double what it is now. If you ask someone at ~70 years old they will tell you similar stories about cycles of high and "stability".
There’s a saying: “In Argentina, everything changes every day, but if you come back after ten years, nothing has changed.” In your case, you were born around 1994. Until you were about six years old, if you went to the supermarket with your family, you could probably keep track of prices in your head. By the time you were 16, the inflation rate was likely double what it is now. If you ask someone at ~70 years old they will tell you similar stories about cycles of high and "stability".
I don't think so because except for the 90s Argentina had inflation since the 1950s[0]. That 70 years old would only remember the 90s as the most stable period. Sure, the 60s weren't that bad but we still had high inflation.
[0]: https://upload.wikimedia.org/wikipedia/commons/thumb/9/93/Ar... (just note the Y axis scale... if it were from 0 to 100 you would truly see there were very few years with 1 digit inflation)
[0]: https://upload.wikimedia.org/wikipedia/commons/thumb/9/93/Ar... (just note the Y axis scale... if it were from 0 to 100 you would truly see there were very few years with 1 digit inflation)
First, it is important to highlight for people no familiar with Argentina that the current yearly "Milei" inflation is above 40% and it could be difficult to go much below. This inflation takes into account a very basic basket. The current inflation is very high and the country is in a recession. This is just a macroeconomic measure beyond Milei and its legacy.
Then, sorry, you are mistaken about historical inflation rates and you can check that easily [1]. Comparing just one year of government inflation as a data point is not enough to extrapolate, and I haven't started talking about carry trade that gives investors more than 10% per month in USD. Last time that happened, just two governments ago and with The same guy, there was a crash one day.
[1] https://tradingeconomics.com/argentina/inflation-cpi
Then, sorry, you are mistaken about historical inflation rates and you can check that easily [1]. Comparing just one year of government inflation as a data point is not enough to extrapolate, and I haven't started talking about carry trade that gives investors more than 10% per month in USD. Last time that happened, just two governments ago and with The same guy, there was a crash one day.
[1] https://tradingeconomics.com/argentina/inflation-cpi
> There are no significant incentives for exports. Only imports.
I have an urge to punch some politician in the face every time somebody creates one of those systems that punish one and incentives the other.
They can't move independently.
I have an urge to punch some politician in the face every time somebody creates one of those systems that punish one and incentives the other.
They can't move independently.
You don't understand, he's not corrupt, he is misunderstood, otherwise Milei wouldn't be proposing him.
I wonder if Milei could choose a (country + year) as the ideal model (or closest to it) for how a state should be run, what would he choose?
Probably current singapore or 80s Hong Kong
I lived in Hong Kong from 1981 to 1991.
* Overflowing with optimism and "can do" * Equal protection under the law no matter the origin * Max tax 15% for all * Education and health benefits for all (accepting always flaws somewhere) * Anti-corruption was effective (ICAC) * Straightforward process to become a voting legal immigrant for non-Chinese * Many people speaking English, various Chinese dialects, Tagalog and more * Springboard to helping adjacent countries modernize * Unparalleled Eastern and Western food and housing and sociability
I moved to San Francisco only because I was a techie and had a need to change the world. If there had been the Internet, I might still be there...
* Overflowing with optimism and "can do" * Equal protection under the law no matter the origin * Max tax 15% for all * Education and health benefits for all (accepting always flaws somewhere) * Anti-corruption was effective (ICAC) * Straightforward process to become a voting legal immigrant for non-Chinese * Many people speaking English, various Chinese dialects, Tagalog and more * Springboard to helping adjacent countries modernize * Unparalleled Eastern and Western food and housing and sociability
I moved to San Francisco only because I was a techie and had a need to change the world. If there had been the Internet, I might still be there...
Milton Friedman made a documentary about it https://youtu.be/xqh0zXSd4vc
Hong Kong is dense, tiny, central and resource poor.
Isn’t Argentina basically the opposite?
Isn’t Argentina basically the opposite?
The Hong Kong economic model could be applied to any country really. Though it benefited a bit from the cultures involved, the Chinese being quite industrious and the English doing quite well with law and order.
The state holds a lot of power in Singapore, it's very authoritarian. Sounds quite at odds to Milei and his libertarian idology.
The anti-state people often like the idea of an authoritarian leader figure who will fix things by their genius and power of will. Some really do want monarchy (see Curtis Yarvin), but others believe that the dissolution of state power needs to go through an authoritarian phase to happen at all.
It’s not so different from the old-school communists who claimed that a “dictatorship of the proletariat” is a necessary step towards the true freedom of mankind under proper Communism. Conveniently they were the ones in charge of the “temporary” dictatorship in this picture.
Libertarianism and communism are ideological siblings. Both fail time and time again, but to the believers it’s always someone else’s fault and the proper implementation of the ideology simply hasn’t been tried yet.
It’s not so different from the old-school communists who claimed that a “dictatorship of the proletariat” is a necessary step towards the true freedom of mankind under proper Communism. Conveniently they were the ones in charge of the “temporary” dictatorship in this picture.
Libertarianism and communism are ideological siblings. Both fail time and time again, but to the believers it’s always someone else’s fault and the proper implementation of the ideology simply hasn’t been tried yet.
Is not Milei in Argentina the first self-identified libertarian president in history? Where has libertarianism failed?
Here’s a funny recent one:
https://newrepublic.com/article/159662/libertarian-walks-int...
“When a group of libertarians set about scrapping their local government, chaos descended. And then the bears moved in”
But surely there’s a million reasons why these were not True Libertarians, they were just doing it wrong, and the ideology is actually sound. Just like with communism.
https://newrepublic.com/article/159662/libertarian-walks-int...
“When a group of libertarians set about scrapping their local government, chaos descended. And then the bears moved in”
But surely there’s a million reasons why these were not True Libertarians, they were just doing it wrong, and the ideology is actually sound. Just like with communism.
IMHO, Libertarianism fails not by collapse but by success. Any movement in the direction brings economic and social freedom, but in turn creates soft times in which a society's pendulum shift back to larger government is inevitable.
The state is quite controlling in some areas like law and order and banning drugs but pretty laissez faire on economic policy.
South Sudan 2015
Average Haskell programmer.
Not to detract from the joke, but The Haskell Way is that state should be restricted and made explicit, not destroyed.
Milei's discourse is about destroying the State. Even though the Argentinian institutions have been stable enough to stop him and force him into the "restrict and make explicit" mode instead.
Milei's discourse is about destroying the State. Even though the Argentinian institutions have been stable enough to stop him and force him into the "restrict and make explicit" mode instead.
The state is essentially the Java monolith, and a Haskell programmer is never going to convince the maintainers to rewrite the monolith; garbage collection is the best they can do.
[deleted]
> "Argentina’s president is idolised by the Trumpian right. They should get to know him better"
The subtext here seems to be that if the Trumpian right understood Milei, they would not idolize him.
On the contrary, I believe that the Trumpian right understands Milei just fine: they're on board with his ideologies.
The subtext here seems to be that if the Trumpian right understood Milei, they would not idolize him.
On the contrary, I believe that the Trumpian right understands Milei just fine: they're on board with his ideologies.
I agree with what you say, but it's funny that I can't tell if we have the same reasoning :)
Their supporters don't know or care much about economics but sure like a brash-sounding contrarian strongman leader who appeals to their insecurities. They don't mind a touch of the 'ascism since the leopard surly won't be coming for their sort of face.
Their supporters don't know or care much about economics but sure like a brash-sounding contrarian strongman leader who appeals to their insecurities. They don't mind a touch of the 'ascism since the leopard surly won't be coming for their sort of face.
That's about my reasoning, yeah.
That's impossible to square. As the article points out, his drastic spending cuts and embrace of free trade are basically the radical opposite of where the US is going. Protectionism and industrial policy seem to now be consensus.
Milei is the closest thing the world has gotten to Milton Friedman style politics in the last few decades and the American right now looks more like what in Britain or Canada you'd call a Red Tory, i.e. paternalistic conservatism. People like Michael Lind who try to give this an intellectual underpinning are explicit critics of libertarianism.
Milei is the closest thing the world has gotten to Milton Friedman style politics in the last few decades and the American right now looks more like what in Britain or Canada you'd call a Red Tory, i.e. paternalistic conservatism. People like Michael Lind who try to give this an intellectual underpinning are explicit critics of libertarianism.
Neither one of them follows an economic ideology: the only ideology either cares about is power. The oligarchies in the respective nations want different things, hence the surface differences you point out.
Dupe: https://news.ycombinator.com/item?id=42267248
It's also paywalled, but riffing on the headline: why is your contempt for the state different than mine? "Intellectual Property" must be enforced by the state, no single entity can stop all thefts of "Intellectual Property". I personally find copyright limitations far more of a problem than the Pure Food and Drug Act, or the Voting Rights Acts, or Affordable Care Act.
Can I defy the state on issues of "Intellectual Property" and count on your support? If not, why not?
It's also paywalled, but riffing on the headline: why is your contempt for the state different than mine? "Intellectual Property" must be enforced by the state, no single entity can stop all thefts of "Intellectual Property". I personally find copyright limitations far more of a problem than the Pure Food and Drug Act, or the Voting Rights Acts, or Affordable Care Act.
Can I defy the state on issues of "Intellectual Property" and count on your support? If not, why not?
There wouldn’t be free markets without the state. So he either doesn’t actually want free markets and wants to run a mafia state like Putin, or he is a complete idiot.
Why would a state be needed for a free market? The old American west is a recent example of no formal state with a free market.
Most people today use term “free market” to include legal and police/military to keep the market free from abuses.
A lot can be debated (various forms of IP rights, etc). But in a “Wild West” situation, is it really a free market if your neighbor can just steal your goods if he has a gun and you don’t?
Going further, you could argue there’s as lot the state can do to facilitate trade (build infrastructure etc)
A lot can be debated (various forms of IP rights, etc). But in a “Wild West” situation, is it really a free market if your neighbor can just steal your goods if he has a gun and you don’t?
Going further, you could argue there’s as lot the state can do to facilitate trade (build infrastructure etc)
A healthy state funds public infrastructure the market relies on, sets regulations that curb negative externalities, and discourages monopolistic and anti-competitive practices. You can have a free market without a state, but it will be inefficient, dangerous, and eventually dominated by a handful of oligarchs.
For example, the concentration of power can manifest in monopolies or oligopolies that dominate markets, reducing competition and harming consumers.
Another example from Argentina is the situation in Ushuaia, where so-called "electronic companies" benefit from significant tax exemptions. These companies basically assemble Samsung devices rather than engaging in full-scale production, yet they present these products as if they were manufactured in Argentina. This highlights how government policies can sometimes distort markets instead of fostering genuine competition or innovation.
[1] https://en.wikipedia.org/wiki/Ushuaia
Another example from Argentina is the situation in Ushuaia, where so-called "electronic companies" benefit from significant tax exemptions. These companies basically assemble Samsung devices rather than engaging in full-scale production, yet they present these products as if they were manufactured in Argentina. This highlights how government policies can sometimes distort markets instead of fostering genuine competition or innovation.
[1] https://en.wikipedia.org/wiki/Ushuaia
[deleted]
When you mean old is when? Also would love you to expand on this too.
Roughly 1830-1890. I am referring to frontier territories before/during the westward expansion. There were mining/cattle towns (eg Deadwood). There was no official federal or state government yet.
They operated under a free market obviously (you could trade with anyone, no taxes or levies). Disputes were resolved through arbitration or informal courts. They relied on private lawmen or hired security (Pinkertons)
They operated under a free market obviously (you could trade with anyone, no taxes or levies). Disputes were resolved through arbitration or informal courts. They relied on private lawmen or hired security (Pinkertons)
And those markets relied upon the US Army to remove Native Americans to create the “free” real estate upon which the whole thing relied.
Aw yes, the frontier Wild West, famously known for peace and stability.
Citation needed
Pirates ?
The free market in the real 3D world we inhabit needs freedom to operate granted by the local people/state
The free market in the real 3D world we inhabit needs freedom to operate granted by the local people/state
[deleted]
[deleted]
The thing I see as worrying with Milei is that while he is an economist, and seems to be using economic principles to drive his thinking, he has also mixed in an unhealthy dose of culture war nonsense and other politics into his strategy. He claims almost all journalists in Argentina are corrupt and just write lies about him, which I find to be a suspicious claim. He also thinks that Trump is a wonderful and selfless human who is making sacrifices for his country and the same of Elon Musk. So he is obviously a very poor judge of character and it makes me question his own character.
I can understand someone who hates the state and wants to see it destroyed supporting Trump and Musk. They are obvious choices if you want to maximize the damage.
I'm as anarhist as any other wanna be erlang developer, but it's odd to see Trump mentioned in the context of taming Leviathan, when he promises to use military to deport millions of people out of the country under martial law kind of regime. I guess one persons libertarian hero is another persons statist opressor. I would not care less if not the military to use for taming the Leviathan wasn't biggest in the world and literally is in the business of exporting money for the whole world to use.
He looks and talks like Lucifer imo