In the video, you see only their backs. But I’ll bet you anything you like that, as he delivered his speech, Javier Milei was looking out at a sea of smirking faces. Argentina’s new president had been asked to speak at the World Economic Forum (WEF) as, if not exactly a comic turn, at least a warning to that most self-regarding of conferences that voters can make terrible choices.
The former economics professor made no attempt to meet his audience half way. On the contrary, he began by warning that Western values had been betrayed by “those who want to belong to a privileged caste”.
The brahmins of that caste, as he well knew, were gathered before him in Davos. And, as he uttered those words, you may be sure they caught each other’s eyes and twisted their features into expressions of amused contempt. It is what they do when anyone steps outside their ideological parameters.
While the WEF does not have a unified party line, delegates at its smugfest have a great deal in common. They like regulations, which are designed by and for people like them and which, though they are dressed up as being about consumer protection or greenery, end up keeping out the competition.
They approve of government task-forces and advisory agencies – indeed, they meet in Davos partly to lobby each other for jobs on such bodies. They love supranational institutions, and regard sovereignty as dangerous, atavistic and, worst of all, low-status. In short, they want a world run by sensible, educated, moderate sorts like themselves, with minimal interference from national electorates.
Milei spent 40 minutes telling them how, in theory and in practice, state intervention tends to make people poorer. The shock-haired libertarian is governing as he campaigned – through a series of economics lectures. But few of his students can have been as unimpressed as this conclave of quangocrats and CEOs, whose careers depend on public money.
Three thoughts struck me as some minimally polite applause followed. First, it is beyond bizarre that commentators lump libertarians and Davos corporatists together as part of some Right-wing, pro-business elite. Second, if we were guided by evidence rather than fashion and prejudice, Milei would be recognised as the pragmatist, and the smirkers as the ideologues. Third, he was spot on. The people in front of him really had adopted the assumptions of socialism, though not the full package nor, in most cases, the name.
There is nothing pro-market about Davos. Here are the directors and lobbyists of Atlas Shrugged brought to life: woke, subsidy-hungry, pleased with themselves, ambitious, conformist, reluctant to express a view until they have a sense of the room. Had the WEF existed in the late nineteenth century, it might have included a few economic liberals, for free markets were then in fashion. But our own age is corporatist, managerialist and high-spending, and delegates duly parrot those orthodoxies.
Indeed, Milei told them so in terms, pointing out that “a great many of the prevalent ideologies in Western countries are variants of collectivism, whether they are called communist, fascist, socialist, social democratic, Christian Democratic, progressive or populist”.
Because he dislikes state interference, Milei is dismissed as a loon. He is “radical” (New York Times), “extreme” (El País), “populist” (Le Monde), “far-Right” (BBC). Yet the classical liberalism he espouses is as undoctrinaire as any world-view can be. Other strains of politics ask us to follow their plan or, at least, to contract out our judgment to others – priests or kings or commissars or father-of-the-nation types. But libertarianism leaves us free to muddle through, to make mistakes, to choose our own paths, in the hope that, from the market-place of differing ideas, best practice will emerge.
People call Milei an ideologue, but he wants to have less control. His reforms, which have mobilised Argentina’s Peronist establishment against him, mainly involve politicians surrendering their privileges.
He wants to give up the power to set prices, incomes and rents; to end state ownership of commercial companies; to let sports tickets be resold; to allow foreign airlines to compete on Argentine routes; to scrap tariffs and export controls; to permit driverless cars; to cut taxes; to abolish the central bank.
So far, markets have responded favourably – an indication of what might have happened had the Kwarteng budget been accompanied by spending cuts rather than by the huge increase represented by the energy price guarantee.
The bizarre thing, though, is that Milei’s libertarianism is seen as doctrinaire. The former TV personality summarised his philosophy by quoting the Argentine economist Alberto Benegas Lynch: “Libertarianism is the unrestricted respect for the lives of others based on the non-aggression principle and the defence of life, liberty and property”. Or, in the global slogan of the libertarian movement: “Don’t hurt people, don’t take their stuff”.
All of us, I hope, seek to live by that maxim. We try, in our own lives, not to injure, imprison or rob others. What libertarianism holds is that our leaders should behave like the rest of us: that the fact of being in government, even in a democracy, should not give them a pass to do things which are immoral in every other context, such as to expropriate or coerce others.
How did this humane notion come to be viewed as extreme and sinister? Why is it so loathed by the Davos schmooze-meisters?
“The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood,” wrote John Maynard Keynes in 1936. “Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.”
For once, the word irony applies exactly aptly. Many of today’s sensible centrists have unconsciously absorbed a mangled version of Keynes’s own theories, at least the notion that governments can stimulate growth by spending money. Yet, over the long term, countries with lower state spending and lighter regulations outgrow those with more intrusive governments. As Milei reminded his audience: “Socialism always and everywhere makes people poorer. It has failed in every country where it has been tried. Failed economically, socially and culturally. And it has murdered more than a hundred million people”.
Exactly a hundred years ago, on 21 January 1924, Vladimir Lenin died at his dacha in Gorki. It was already clear by then that socialism required secret police, labour camps, and firing squads, since people had to be forced to behave in unnatural ways. It was clear, too, that a regulated economy meant poverty and hunger. Yet, in the hundred years since, intellectuals have continued to insist that state control can somehow be made benign.
The very people who consider themselves sensible, centrist, “reality-based” and so on have a bizarre aversion to judging socialism, collectivism and other forms of dirigisme by their real-world outcomes. From money printing to identity politics, from lockdown to the euro, they continue to back terrible ideas for reasons that are wholly theoretical.
The only thing that makes Argentina different is that its swing from economic liberalism to populist interventionism was more marked, and its downfall commensurately more dramatic. Argentina had broadly pro-market governments until 1916, at which time it was one of the wealthiest places on earth. A century of statism followed – sometimes socialist, sometimes military, sometimes Peronist, always calamitous. Now, with inflation touching 200 per cent, the country has presented itself in desperation for shock therapy.
Unlike most British commentators, I have spent time with Milei. He comes across in private as he does in public: clever, demotic, mercurial, driven, eccentric. I worry about his ability to withstand the Peronist backlash. But I have no doubt that, if he is allowed to implement his programme, he will reverse a century of decline in Argentina.
The fact that the guardians of correct opinion in Europe see him as beyond the pale tells you everything you need to know about why their countries are not doing better.