Argentina’s libertarian President Javier Milei praised the virtues of free markets and warned political leaders about the dangers of collectivism in a speech at the World Economic Forum on Wednesday.
“The West is in danger, it is in danger because those who are supposed to defend Western values find themselves co-opted by a worldview that—inexorably—leads to socialism, consequently to poverty,” Milei said in the opening of his keynote speech in Davos, Switzerland, during his first overseas trip as president.
Milei explained that no other country is a better example of this trend than Argentina. Once a global economic powerhouse, Argentina has spiraled into poverty as a consequence of extensive state intervention in the economy. Two out of every five Argentines live in poverty and the inflation rate is over 200 percent.
In his 23-minute address, Milei argued that the key to eradicating poverty worldwide lies in adopting free market ideals and capitalism.
“Far from being the cause of our problems, free enterprise capitalism, as an economic system, is the only tool we have to end hunger, poverty, and indigence,” he continued. “The empirical evidence is unquestionable.”
Milei argued that collectivism punishes business owners and stifles innovation by destroying any incentives “to produce better goods and better services at a better price.” Countries embracing greater economic freedom are eight times wealthier than their repressed counterparts, Milei asserted.
“The case of Argentina is an empirical demonstration that—no matter how rich you may be, or how much you may have in terms of natural resources…or how many bars of gold you may have in the central bank—if measures are adopted that hinder the free function of markets, free competition, free price systems, if you hinder trade, if you attack private property, the only possible fate is poverty,” Milei said.
The libertarian president emphasized that market failure can only happen if there is coercion by the state, “which has a monopoly on violence.” He criticized the collectivist approach of dismissing freedom and opting for more regulation to fix a country, which generates “a downward spiral of regulations until we are all poorer” and “depend on a bureaucrat sitting in a fancy office.”
Since his inauguration on December 10, the anarcho-capitalist president has implemented measures to counteract Argentina’s history of collectivist policies, including a substantial devaluation of the peso and a reduction of government ministries. In December, Milei presented several other reform bills to Argentina’s Congress, which aim to drastically cut state spending and deregulate several economic sectors.
Milei’s proposals are currently being discussed by Congress, but his party lacks the majority in both houses of Congress. The proposals also face staunch opposition from labor unions and other protesters, making it uncertain whether all of Milei’s initiatives will be successfully implemented.
Despite internal challenges, Milei’s radical agenda has garnered support from external observers, including Kristalina Georgieva, head of the International Monetary Fund (IMF). “The Argentine economy is in such bad shape that it has to be shaken up. President Milei and his team are doing exactly that,” she said during an interview in Davos. Argentina is currently the IMF’s largest debtor, with an outstanding debt of $46 billion.
“We come here today to invite the other countries of the West to return to the path of prosperity,” Milei told his audience. “Economic freedom, limited government, and unrestricted respect for private property are essential elements for economic growth. This phenomenon of impoverishment produced by collectivism is not a fantasy. Nor fatalism. It is a reality that we Argentines know very well.”
“Do not give in to the advance of the state. The state is not the solution. The state is the problem itself,” Milei declared.