In addition to his scientific preparation – Milei is the author of 16 books, 52 academic essays and over 500 articles – the Argentine leader showed that couragerare but decisive in politics, which serves to harmonize nature and history: demystifying the state as a vehicle of institutional dispossession, and at the same time aiming here and now the finger against the Kirchnerist leeches who have plundered the country with impunity for more than 16 years. The ideas planted by the Austrians have thus become tangible and exciting for the broadest sections of the population and especially for the most vulnerable. “Who will stand on the barricades for a two percent tax cut?” he wondered Murray Rothbardin the belief that the ideas of freedom must illuminate the mind, but also warm the heart.
The situation in Argentina
Arrived at redde rationem, the incoming government found itself faced with a disastrous situation: an inflation of 7% weekly, a poverty rate of 45%, 10% of the poor and an economy in recession since 2011. Therefore in full stagflation. The first measures announced by the Minister of Economy Luis Caputo, however, gave the impression that the government wanted to set the chainsaw plan in motion with the handbrake on. The reduction of ministries (from 18 to 9), secretariats (from 106 to 54), undersecretariats (from 182 to 140), subsidies to the transport and energy sectors; the reduction of transfers from the national state to the provinces to a minimum; the elimination of the current cumbersome import system (Sira) and the suspension of public works represent important steps in the right direction.
The final cause of every economic reform, it must always be remembered, is neither the achievement of a balanced budget nor the reduction of the spread, but the opening of new spaces for the entrepreneurial function, by nature creative and coordinator. That is: freeing manpower, natural resources and capital from what Max Weber called the political-bureaucratic “steel cage”, to make them available again to economic agents in the context of social cooperation. Curing the fiscal deficit by raising taxes, Rothbard wrote, “is equivalent to curing someone’s bronchitis by shooting them.”
The pro-commerce decree
A historic change of direction, undertaken by a true leader of freedom, an example for the whole world. Furthermore, in recent days, Milei has submitted to the congress a ley omnibus which among other things proposes to privatize 41 state-owned companies. The criticisms were not long in coming and Milei pointed out that, in the event that parliament were to reject his initiative, “he will call a plebiscite”. It is clear, however, that the Argentine leader must pursue structural reforms radically, even at the cost of antagonizing his own ministers and advisors. Argentina needs the “intransigent” Ludwig von Mises, not the “market socialist” Oskar Lange, and this implies not getting caught up in pragmatist measures which, wanting to replicate the market – always quicker and more perceptive than any central legislator – confuse the operators.
The obstacle of inflation
Like Erhard, who accompanied his liberalization measures with a clear monetary reform, Milei will also have to face the problem of inflation head on. This requires first freezing the money supply sensual side– liabilities, remunerated (Lelics and Pases) and not (monetary base), of the central bank and the deposits created ex nihilo from the banking system (chirographis pecuniarum, in the terminology of the scholastic Luis de Molina); the closure of the central bank as a financial and credit regulatory body; the abolition of exchange control and the liberalization of the foreign exchange market, thus eliminating the “shortage” of dollars (currently undervalued), the unfair rationing policy that favors traders who are friends of the political caste and allowing exchange rates to be fixed on a regular basis agreement with their respective purchasing powers; guarantee convertibility at the emerging rate, requiring commercial banks and all (private) conversion agencies to always maintain a reserve ratio of 100% on sight deposits and equivalents.
Milei, don’t stop
Jesús Huerta de Soto, Philipp Bagus and Bernardo Ferrero