December 13, 2024 | Anarcho-Capitalist Javier Milei Disrupts Argentina and has U.S. Admirers

Javier Milei is making huge changes in Argentina and U.S. leaders like Donald Trump and Elon Musk are planning to follow his radical moves.

Will Argentina survive Milei? Will the U.S. copy his program?

Source: The Economist

While Americans were electing Trump the far right and its billionaire backers were making plans to cut back the size of government and slash regulations. Trump has appointed Elon Musk and Vivek Ramaswamy to lead the newly created “Department of Government Efficiency” (DOGE) that will examine government operations and propose drastic cuts that will reduce the deficit, streamline government bureacracy and reduce the regulatory burden. Elon Musk is especially interested in cutting government regulations that he believes are holding back his Tesla Robotaxi product and his SpaceX mission to Mars.

Milei claims a special relationship with Donald Trump, saying “We have a very good feeling between the two of us; we have a good quality of bond.”

Elon Musk has met more than once with Milei who has been president in Argentina for a year. They talked about how to cut spending and regulations. Milei’s program has had some positive early results but he started with an economy that had been in serious trouble for decades with rampant corruption, high inflation, reckless borrowing and a central bank that printed money and imposed price controls. Before Milei, the Argentinian government deficit was 15 percent of GDP, compared to the U.S. deficit at about 6 percent.

Milei, who campaigned for office with a chainsaw, has cut government spending by a third in inflation-adjusted terms, producing a budget surplus. Inflation has plunged from 13 percent monthly to 3 percent monthly.

The number of poor people has grown from 40 percent to 53 percent in one year, even though Milei has tried to maintain their transfer payments.

Javier Milei is a self-described anarcho-capitalist and, in an interview with Lex Fridman, he talked extensively about reading dozens of books from the Austrian school of economics. He likes ideas which emphasize individual freedom, the role of free markets and the importance of private property rights as outlined by authors such as Ludwig von Mises.

Milei gives high praise to the extreme views of the radical economist Murray Rothbard — a founder of anarcho-capitalism. Rothbard believed that the “free market should provide all services that are traditionally considered functions of … government, including roads, infrastructure, and police protection.”

This rugged individualism is more political philosophy than economic discipline. The belief is that both state and taxes must be eliminated.

Milei is quoted in a November 28, 2024 interview with The Economist:

“I still consider the state to be a violent criminal organisation that lives from a coercive source of income called taxes, which are a remnant of slavery.”

“Anything I can do to remove the interference of the state, I’m going to do.”

Argentina and Milei will be watched closely, as this bold experiment continues into its second year and gets copied by U.S. leaders.

Hilliard MacBeth

The opinions expressed in this report are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Richardson Wealth or its affiliates. Assumptions, opinions and estimates constitute the author’s judgment as of the date of this material and are subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results. The comments contained herein are general in nature and are not intended to be, nor should be construed to be, legal or tax advice to any particular individual. Accordingly, individuals should consult their own legal or tax advisors for advice with respect to the tax consequences to them, having regard to their own particular circumstances.. Richardson Wealth is a member of Canadian Investor Protection Fund. Richardson Wealth is a trademark by its respective owners used under license by Richardson Wealth.

Hilliard MacBeth December 13th, 2024

Posted In: Hilliard's Weekend Notebook

Next: Beware Last 2 Weeks of December – Something is Not Right »