JAVIER MILEI, an Argentine presidential candidate, spoke to The Economist on September 4th in Buenos Aires. The conversation, which was automatically translated, has been lightly edited for clarity.
The Economist: Tell me about your intellectual trajectory. How do you define yourself ideologically and what does it mean to you to be a libertarian?
Javier Milei: I decided to study economics when I was [...] ten years old, when [former Finance Minister Alfredo] Martínez de Hoz’s currency board programme exploded in 1981.
When I started university Argentina went into hyperinflation. As a result of that situation I stopped playing football, which I played professionally, and I dedicated myself to studying intensively.
The Economist: Did that hyperinflation personally mark you?
Javier Milei: Yes, exactly. Obviously, like all Argentines studying economics in Argentina, I was trained as a sort of mixture between post Keynesians [the theory of John Maynard Keynes] and structuralists. Later, when I did my first master’s degree, which I did at IDES [Institute for Economic and Social Development], I studied different aspects of Keynesianism. And I was 😞 by the errors and the lack of solid explanations of what was happening in the economy.
When I did my [second] master’s degree at [Torcuato Di Tella University] I had already become a recalcitrant neoclassicist. That is, I was a faithful devotee of “real business cycle theory.” And since everything has an end, in 2008 my worldview fell down. There I went back to re-studying Keynes and I went back to re-studying [Milton] Friedman.
In this whole process, where I started to reconvert and to reconsider what I was doing, I basically decided to dedicate myself ultra-intensively to the study of economic growth in order to detach myself from the situation at that moment.
And I was quite happy with that until I came across the Angus Madison series, which basically shows, when you look at the GDP per capita between the year zero of the Christian era and the year 2000 it has the shape of a hockey stick. Between the year zero and the year 1800 GDP per capita only grows around 50%; but in the last 200 years, between 1800 and 2000, it multiplies nine times. And this is happening in a context where the population has almost multiplied by seven.
So that implies the presence of increasing returns in microeconomic terms. That means that you have a concentrated market structure. And, according to conventional economic theory, that would be bad. And yet it is a situation where not only the quality and quantity of goods and services that we had made the average individual on the planet live better than how emperors and pharaohs and kings had lived, but extreme poverty went from 95% to about 10% in that period. So how can neoclassical theory describe that as a bad thing, or call it market failure?
After that, a person from my team handed me an article by Murray Rothbard called “Monopoly and Competition,” an article of about 150 pages. After three hours, when I finished reading it, and after teaching microeconomics for about 25 years, I said: everything I taught in the last 25 years on market structures is wrong. And that’s when I started to convert to the Austrian school [of economics] and, reading Rothbard, I became an anarcho-capitalist.
The Economist: What does it mean to be an anarcho-capitalist?
Javier Milei: You are a liberal, in fact the definition we work with is that of Alberto Benegas Lynch Jr., which is: “liberalism is the unrestricted respect for the life project of others, based on the principle of non-aggression and in defense of the right to life, liberty and property”.
And in that context, you understand the state as a criminal organisation. Because you don’t pay taxes voluntarily, you pay them at gunpoint.
So there is a discussion of a moral nature, I would say, about rejecting violence, about rejecting the advance [of the state] on property. The state finances itself with taxes, and taxes [the Spanish word for tax means ‘imposed’], clearly are called that way because they are not voluntary. So the state is an apparatus of coercion which has a monopoly of force. And like everything that has a monopoly of a legal nature, it always ends up causing damage.
So we understand the state as a criminal organisation, a violent organisation that lives by stealing from honest people. And [we believe that] society functions much better without a state than with a state, I mean, on an ideal level.
More...
https://www.economist.com/news/2023/09/07/an-interview-with-javier-milei
