Outside of North Korea, it’s hard to think of any place where libertarianism should have more appeal than in Argentina. Once one of the richest countries in the world, 100 years of foolish statism has turned it into a “developing country”. By statism, I mean the sort of industrial policies that are becoming so trendy among younger America intellectuals.
With 30% of the vote, Javier Milei surprised pundits by leading the primary ballot in yesterday’s election in Argentina. He’s been called a “populist” and a Trump-like figure, which may be true in a stylistic sense. But on policy he’s not at all populist or Trump-like, rather he’s a radical libertarian (albeit with socially conservative views). I’m also a libertarian, although for reasons I’ll explain later I’m not a fan of Milei. But I do welcome the support he received. Indeed given Argentina’s sad history with statism, the real surprise is that he didn’t receive 100% of the vote. Perhaps Argentine voters are beginning to wake up.
Bloomberg had this to say:
Some of his controversial opinions include the defense of gun ownership, his stance against abortion and the sale of human organs.
This is incorrect—Milei actually favors organ sales.
Organ sales are one of the issues that I feel most passionate about. As many as 40,000 Americans needlessly die each year because of the ban on organ sales. Almost everyone I talk to supports the ban, and the reasons they cite for not favoring organ sales (it would create a black market, or it would be biased against he poor) reflect a high degree of ignorance of the issue. Allowing organ sales would reduce the black market and would clearly help America’s poor.
Milei also supports dollarizing the Argentine economy. That might works, but seems like a rather risky strategy. If I were an Argentine libertarian I’d focus on issues where success is more likely. To his credit, he also favors a radical reduction in government spending and regulation. Argentina has tremendous potential—indeed it ought to be the richest country in Latin America. There’s no reason it cannot become as rich as Italy or Spain. If it does the right things, dollarization won’t be necessary. If it fails to reform, dollarization will collapse.
Despite these reservations, I support most of the economic policies being advocated by Milei. But as I’ve gotten older, I’ve become increasingly distrustful of politicians. He seems like an unusually reckless figure, which makes me a bit concerned about how he’d do once in office. On the other hand, perhaps Argentina needs a wild man to shake things up.
Argentina has a democratic form of government, and no single person is likely to be able to enact radical change. If he were to win (which is not at all certain), Milei would likely be unable to achieve most of his policy proposals. Then the question becomes one of whether he has the good judgment to get his most effective policies enacted, or whether he wastes time on his worst ideas (which in my view are his social policies). That’s beyond my ability to forecast.
PS. He could ask for advice from the “Chicago Boys“.
READER COMMENTS
Andrew_FL
Aug 14 2023 at 2:07pm
The reason he is prioritizing dollarization is because inflation is running over 100% annually.
nobody.really
Aug 17 2023 at 8:34am
Javier Milei
Rafael
Aug 14 2023 at 2:43pm
I think the point of dollarization is one whose value is sometimes not fully understood.
It simply functions as a nearly irreversible commitment mechanism to outsource one’s monetary policy to Constitution Av.
And the reason to do that is not because the Fed’s monetary policy will be better than that likely to occur under the administration of a President interested in dollarizing, but rather that that President knows that eventually his term will end. And whomever comes after him is extremely likely to have a much worse monetary policy.
Scott Sumner
Aug 14 2023 at 3:08pm
I understand that. But this is almost the exact same argument that was used for Argentina’s currency board.
I’m not saying it wouldn’t work, but there are much higher priorities.
Rafael
Aug 17 2023 at 9:09am
The currency board is pretty different from dollarization I think. It function more as a capital control than anything.
More than create any type of stability in the value of the currency it just prevents people from legally accessing currency and creates a gigantic opportunity for graft in the black market while having no impact on inflation.
Plus even in a case where a currency board sort of functions its very reversible, you just devalue and your done.
If people are actually using dollars not something pegged to the dollar then that is much harder (if not necessarily impossible, Cyprus style bail ins and such) to do.
TMC
Aug 14 2023 at 2:49pm
Marginal revolution has a post on him as well, and states he ‘ wants to adopt the U.S. dollar as Argentina’s official currency ‘.
I’d be interested in your view. I’d say Argentina could use the stability in the short term, but I’d be concerned in the long term about the lack of float. Control over your own currency in underrated. I think the same for the EU.
Kevin Corcoran
Aug 14 2023 at 2:50pm
I don’t think the author of the article means to imply that Milei is opposed to organ sales. That is, I don’t think the “against” in “against abortion” is meant to carry over to also being “against organ sales.” I think the author just takes it as given that the “controversial opinion” regarding organ sales would be to favor them, and therefore doesn’t bother to specify that Milei favors organ sales. Simply stating that his opinion on organ sales is controversial suffices to communicate that he favors them. I don’t think I’ve ever heard anyone’s opposition to organ sales be described as “controversial.”
(Of note, I agree with you that organ sales should be permitted.)
robc
Aug 14 2023 at 2:59pm
I think you read Bloomberg wrong, as there is no controversy about being against sales of human organs.
The sentence is poorly written but I think it parses as
Defense of gun ownership
Against abortion
Sale of human organs
An oxford comma would have helped.
Scott Sumner
Aug 14 2023 at 3:11pm
I did not read Bloomberg wrong, they wrote it wrong. “Sale of organs” is not a policy. Just as “abortion” is not a policy. Bloomberg said he was against both.
Alexander Search
Aug 14 2023 at 11:26pm
I agree with robc. Unless we expect a trio of workaday journalists to use asyndeton, the “and” marks the last item in the series.
“Some of his controversional opinions include (1) the defense of gun ownership, (2) his stance against abortion *and* (3) the sale of human organs.”
However, I also agree with both of you — if this snippet is representative of the full piece, then the journalists’ writing is just plain bad.
Scott Sumner
Aug 15 2023 at 1:54am
It’s so poorly written it’s hard to know what he meant.
robc
Aug 15 2023 at 8:59am
Not really, because as both I and Kevin said, the controverserial position on organ sales is favoring them. There is no controversy if you oppose sales.
But yes, I agree with you that it is horribly written.
Scott Sumner
Aug 15 2023 at 2:54pm
OK, maybe you are right.
Monte
Aug 14 2023 at 5:35pm
With 4 English Mastiffs named Milton, Murray, Robert, and Lucas, it’s safe to say Melei has already taken that advice to heart.
The Chicago Boys and the Chilean Miracle get mixed reviews. This from Amartya Sen:
The Chilean Miracle can best be described as a free market revolution that took place under a military dictatorship.
If this self-proclaimed “lion king in a leather jacket” is elected, let’s hope his administration proves less controversial than Trump’s and, more importantly, less deadly than Pinochet’s.
Contra Charles Bukowski, style is not the answer to everything…
Scott Sumner
Aug 15 2023 at 1:57am
“but few have claimed it to be a success”
Chile has the most prosperous economy in Latin America
robc
Aug 15 2023 at 9:03am
Just did a google search because I was wondering how close Costa Rica was to Chile, and found that in 2021 Uruguay had squeaked by Chile in per capita GDP, at least according to that one site.
That site also had Bahamas, St Kitts, and Barbados above Uruguay, but calling them latin america is questionable, I think they were all English colonies.
Andrew_FL
Aug 15 2023 at 11:46am
According to the World Bank, in 2022, in 2017 international PPP dollars, Chile is ahead of Uruguay, but (leaving aside island/Caribbean nations) behind Panama and Guyana. Guyana is weird, their per capita, PPP GDP has shot up very recently. No idea why.
Andrew_FL
Aug 15 2023 at 1:11pm
I should’ve dug just a little deeper because it’s oil. Of course it’s oil. It’s always oil.
Monte
Aug 15 2023 at 11:53am
According to the FAIR team, Chile is currently ranked the third richest country in South America, but I wonder for how long?
It’s prosperity is due in no small part, I agree, to the free market reforms introduced by the Chicago boys. However, Amartya Sen et al have cast doubt on their success and convinced Chile’s leadership and its people that those reforms are at the very root of the country’s problems today:
Chili has seemingly lost its faith in the free market.
robc
Aug 15 2023 at 1:21pm
I have no comment.
Mark Brophy
Aug 15 2023 at 1:59pm
According to the Heritage Index, the GDP per capita in Chile is $26,000 but only $24,000 in Uruguay, Guyana, and Argentina. It’s $37,000 in Portugal. Before renouncing capitalism in 2019, it was Chile’s goal to catch up with Portugal.
Scott Sumner
Aug 15 2023 at 2:56pm
The Nordic countries are more free market than Chile. But they do have much more social insurance. Chile cannot afford that sort of social insurance, not even close.
Monte
Aug 15 2023 at 4:44pm
This and the perception of growing inequality and political unrest are likely to precipitate a return to statism and industrial policy. It remains to be seen if Melei can convince Argentinians to roll the dice in the opposite direction.
MarkW
Aug 14 2023 at 8:08pm
Perhaps Argentine voters are beginning to wake up.
I hate to say it, and I hope I’m wrong, but probably not enough Argentine voters and not for the long haul. It seems that place in South America that adopt liberal economic reforms eventually all relapse into South American stagnant leftism (Chile, Peru, and recently Colombia).
Todd Ramsey
Aug 15 2023 at 11:03am
Honest questions, not trolling:
If Argentina were to adopt USD as their national currency, can that work? Would they need to align their fiscal and labor market policies with the US to prevent unsustainable inflation or deflation in Argentina?
Would there be any practical differences between Argentina using USD as the national currency and Greece/Italy/Germany sharing the same currency?
Didn’t Argentina try tying their currency to USD in the 1990s and it failed?
Thank you!
Andrew_FL
Aug 16 2023 at 3:13pm
Could it work? Ask Panama. They’ve been successfully using the US dollar for 120 years.
David Seltzer
Aug 15 2023 at 7:01pm
Scott: “Organ sales are one of the issues that I feel most passionate about. As many as 40,000 Americans needlessly die each year because of the ban on organ sales. Almost everyone I talk to supports the ban, and the reasons they cite for not favoring organ sales (it would create a black market, or it would be biased against he poor) reflect a high degree of ignorance of the issue. Allowing organ sales would reduce the black market and would clearly help America’s poor.”
Thought experiment: The market is free to price and sell organs. Incentives are there for sellers (supply) to come to market with bone marrow, kidneys, corneas and liver lobes for recipient matches. If the initial price for a few early sellers is high because of inelastic supply, wouldn’t that be an incentive for more supply that would lower prices? Somewhere in this exchange the market for organs would achieve some sort of equilibrium. More poor would be helped rather than being consigned to a list.
Scott Sumner
Aug 15 2023 at 7:38pm
That’s right.
steve
Aug 15 2023 at 10:15pm
My readings about this in Iran, where they are legal leave me a little skeptical. In a country without universal health care the poor, most of the donors, may get poor post-op care and have bad outcomes for them. Hard to spend the money if you are dead. Not much better if you have to spend it all on medical care.
Steve
Mark Z
Aug 16 2023 at 1:43am
The cost of the medical care would just get factored into the market cost of the organ.
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