Javier Millais gave a speech in Davos that many described as brilliant, a speech that struck a chord with many commentators around the world. It must be said that Javier Millay, the new president of Argentina, is being heralded by many as the first libertarian president-elect in the world, in a context where Argentina has one of the most troubled economies in the world. Inflation of 120-150% and numerous situations of inability to pay foreign debts, poverty in 39% of the population. Probably, as in other similar situations, a world trend emerged in Argentina, libertarians. Actually, that’s the right thing to say There is mercythe first right-wing libertarian elected president because in 2021 in Chile he won a left libertarian Gabriel Borik. So in South America, a minimalist state is likely to have an electorate bias, either to the left (Chile) or to the right (Argentina).

Libertarians, a simplified presentation

Libertarians put freedom above all else (hence the name of the movement). Libertarians are advocates of a minimalist state at the extreme level compared to any other political movement, with the possible exception of nihilists. On the left and on the right are libertarians, equally extreme in minimizing the state, but very different in their stance on private property and capitalism. Millais is a representative of right-wing libertarians who can be defined as capitalist extremists.

Right libertarians are a movement from the US that some define as anarcho-capitalists, followers of a capitalist system in which the state should not be involved at all, leaving to the free market absolutely everything that can be left free. This is a return to classical liberalism prior to the Great Depression of 1929 and to the concept of that time generally known as “laissez faire.”

A minimalist state of mercy with a “grain of salt”

An in-depth analysis of Argentina’s problems and the state as developed by Mil’s rule is impossible without an investment of time and resources beyond my reach. Therefore, this information should be taken, as the Americans would say, “with a grain of salt” or with a large amount of skepticism. The information on which the current analysis is based comes from several English-language sources (so they are second-hand), and I do not guarantee that they are an unbiased reflection of reality. Most of them are pretty much in line with what I was able to see and understand from Javier Millay’s performances.

If we were to define government as an administrative structure according to Millian libertarianism, that is, a minimalist state in terms of central administration, government would include: foreign affairs, economy, security, defense, human capital, justice, infrastructure, health, and home affairs. Ministries that were liquidated (ministries from the old government). are: transport, public works, science, territorial development and habitat, culture, environment, tourism, animal husbandry and agriculture, women’s affairs. The reform initiated by Miley in Argentina appears to have been initiated by a “general” emergency decree containing hundreds of articles that change dozens of existing laws in Argentina. It is probably extremely difficult for an outside observer who is not well versed in Argentina’s internal problems to understand what impact all these changes will have.

It is clear that in practice we are talking about the use of “shock therapy”, very famous in South America and used with mixed results all over the world, which is considered as hyperinflation therapy. According to some commentators, one of the criticized aspects is the sacrifice of environmental protection as an object of state intervention. Other aspects, such as the elimination of transport subsidies or other price subsidies, are more of a pragmatism, given that Argentina’s finances are unlikely to sustain something like that.

An interesting idea that should probably be implemented over time is the decision to remove the state from large infrastructure projects, leaving them to the initiative of private interest groups. I’m curious how large private infrastructure would work, given that I don’t know of another working example since the construction of US railroads in the 19th century.

One idea that seems to work, but at this point I’m not sure the interpretation is 100% correct, is the privatization of health care and education, or access to health care and co-pays for those who can afford it. If the information is verified, it will be a fusion of libertarianism with the imperatives of an extremely tight budget.

Another aspect that appears to be included in the shock package is the transfer of the pension fund to the state budget and the repeal of legislation that prevented pensions from being adjusted to macroeconomic indicators. In practice, this allows the budget to use pensions to cover urgent needs and increase the level of liquidity available to the government, as well as to make discretionary pension cuts. This seems like a pragmatic move for an insolvent government, and a libertarian one at that, because basically anyone who wants a pension will at least obviously have a private pension. I have some reservations about believing that private pensions can work in an economy as fluctuating as Argentina’s.

The most dramatic change seems to be environmental policy, which is becoming generally incompatible with current European thinking and direction.

I am surprised that I do not see in the structure of the government of the country in the situation of Argentina a ministry of finance, I assume that the functions of such a ministry are taken over by the ministry of economy or another ministry.

Speculation

The use of shock therapy, especially in aspects related to medical services, will lead relatively quickly to a significant reduction in life expectancy. The increase in mortality is likely to occur in two extreme population groups — children and the elderly. In children, because a large part of the population is initially at the poverty level, where access to any form of paid health care is unlikely, and in the elderly, because the cost of health in the context of old age, I mean most chronic diseases, is extremely high.

For Argentina’s public finances, high mortality is likely to be at least a cynical solution to the budget deficit in the short term. If life expectancy is lower than the retirement age, pension funds effectively become public funds, and pensioners’ claims are limited throughout their lives. Infant mortality and the privatization of education automatically turn education into a caste advantage, where belonging to at least the middle social class is a condition for receiving the benefits of education. In the short term, many financial problems are likely to be resolved, but in the long term, the talent pool will be significantly reduced and human resources likely to become extremely unskilled, which will dramatically reduce Argentina’s future potential to develop high-value-added economic activities that require existing skilled workforce for placement in a particular country. On the other hand, the birth rate is likely to drop sharply (from already low values) because it will be very difficult for the majority of the population to provide children with a minimum subsistence level.

In a broad sense, the set of measures will probably be able to solve the problem of inflation and probably stabilize public finances. There is a huge risk of social instability and descent into anarchy. We are likely to see economic growth as the state is able to maintain a decent level of public order, perhaps with the support of private security and guard services. We will probably witness the emergence of a super-rich oligarchy, very similar to the Russian one, and an extremely poor and perhaps completely enslaved majority. The economy can probably work this way too, if the Argentines sovereignly want it. Probably, in the second generation, super-rich oligarchs will spend certain amounts on charity.

Romania and the libertarian model

The libertarian message is now present in public discourse, extremely present on social media, and in the opinions of many commenters on forums. I know of only one party that at one time embraced right-wing libertarian doctrine, the Freemen’s Party, but that was many years ago.

In Romania, the libertarianism displayed by the parties is pure populism, as tax cuts are combined with social policy promises and are therefore unsustainable. You can’t be a minimalist and have tax cuts and welfare, free medicine, free education, etc. In any case, the right-libertarian message without a reduction in social and environmental policy is idealism without corresponding content. You cannot be a left libertarian and a right libertarian at the same time unless you are shamelessly lying.

The illusion of libertarianism is sold to Romanians through messages like “tax is beer”, “you pay taxes and get nothing”, “the state is the biggest thief”, messages that are both wrong and right, but in different proportions.

Tax is synonymous with birr, simply birr is an archaic form of tax, but the term “birr” is associated with Phanariot rule as a time period, thus an archaic form of corruption and exploitation.

“You pay taxes and get nothing” is a reformulation of the definition of taxes from the State Finance Law, according to which “a tax is a free and non-refundable collection carried out by the state administration to meet the needs of the general interest”, from which “to meet the needs of the general interest” is removed Denial of activities to “satisfy the needs of the general interest” is also the essence of the message “The state is the biggest thief”, which changes the view of the state to a tool for satisfying the personal needs of the administration. The state leadership is labeled a “kleptocracy”, which is again both true and false at the same time. First, it is unlikely that all or most of the leadership is only interested in self-interest, and even if they were, self-interest in being re-elected and self-interest in staying out of prison are the most likely limiting factors for self-interest. Second, for many players in the state system, power is ultimately more important than money.

Much of the confusion in our administration, which prefers populist messages without real purpose, is related to parafiscals. All kinds of ridiculous taxes are collected, which very often are simply not worth the costs of their administration and cause idleness and dissatisfaction among citizens. A few days ago I read that the reduction of more than 150 parafiscal taxes had a cumulative effect on budget revenues of hundreds of thousands of euros. If I pay local tax, why do I have to pay taxes at the town hall? If I pay car tax, why do I also pay registration tax? If I pay real estate tax, why do I pay special sanitation tax? Whether the system is right or wrong, the perception is negative for citizens in a way that cannot be condemned at all. No one in their right mind wants to pay taxes and fees and waste their time going through government administrations. _read the whole article and comment on Contributors.ro