Libertarian economics ’ first confrontation with reality
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Libertarian economics ’ first confrontation with reality
By Matt Barlow
Matt Barlow is a Lecturer in International Political Economy in the school of Social and Political Sciences at the University of Glasgow . In his PhD , he explored the ideological challenges of raising export taxes in Argentina in the early-2000s . His current research explores how taxation may create barriers to mobilising domestic resources and to making progress towards the SDGs .
In 2019 , I spent three months in Buenos Aires conducting fieldwork for my PhD , much of this time based at the Universidad Torcuato di Tella as a Visiting Researcher . Whilst there , aside from my own research agenda , there were also ongoing discussions with colleagues about one of the university ’ s former master ’ s students : Javier Milei .
Whilst advocating for a fringe doctrine , right-libertarian economics , Milei was becoming an ever more prominent television personality , very frequently appearing across Argentine TV and generating significant debate .
This was an election year , won by the Peronist Alberto Fernández . But even though Milei did not put himself and his economic doctrine to the vote at that time , his views were already presented in a combative manner — as a radical alternative to the state-led redistributive policies that had been a hallmark of left-leaning Peronist governments in Argentina since the 1940s .
THE DOGMA OF MINIMAL STATE
Also known as anarcho-capitalism , right-libertarianism is both a political philosophy and economic theory . It is grounded in the concept of a minimal state that does not intervene into free market processes and acts a subsidiary to the private sector even in ownership of land , natural resources and infrastructure .
Advocates of the doctrine argue that , should a society have liberty and autonomy from a centralised state , it would organise itself through integration into the free market , while private agencies would assume the role of the state apparatus in areas of security .
Even though Milei had cultivated these views for decades , they gained traction in Argentinian politics only by the time he was first elected to Congress in 2021 .
Milei ’ s anti-establishment and anti-statism rhetoric — he argued that a programme of deep austerity was the only way to fix the economic crisis , as illustrated by his frequent appearances with a chainsaw to decimate the state — was embraced by an electorate weary of the political status quo . Driven by a strong desire for change , Argentinians overwhelmingly elected him as President in November 2023 .
At the time of Milei ’ s election , poverty levels had reached 40 % and the Central Bank had no currency reserves to pay a $ 913 million repayment as part of an $ 44 billion IMF loan agreement .
Moreover , the Fernández administration ’ s policy of money printing to support welfare subsidies had led the annual inflation rate to hit 210 % with December 2023 ’ s monthly figures alone showing increases of 25.5 %.
The country ’ s economic woes were aggravated by a three-year drought with a negative impact on Argentina ’ s
PHOTO : RODRIGO ABD / AP PHOTO
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WEJ | September 2024