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The next stop on his European tour was Germany. Before meeting with German Chancellor Olaf Scholz, economics professor Javier Milei turned to liberal politics and was awarded the Hayek Medal by a liberal think tank. The honor has previously been given to Polish reformer Leszek Balcerowicz, among others. Milei appeared, as always, accompanied by his sister, with a look that was noticeably relaxed, contemplative, sometimes enthusiastic but not aggressive. Some Argentines in the audience celebrated him like a pop star.
Economist Stefan Kuss, president of the Hayek Society, explained in his eulogy that Hayekians consider Javier Milei one of those rare political pioneers who appeared at the moment when it was most needed to help a country that was economically and socially devastated out of its difficulties. Rejecting interventionism. Kuss stressed that the Argentine president was not a populist, but a popularizer of free-market ideas. Milei advocated radical changes, not populist promises or the paternalistic attitude of an ever-expanding welfare state, which ultimately only managed ever-increasing suffering. Instead, Milei freed people from the constraints that prevented them from helping themselves. He restored self-confidence to his fellow citizens, and that is what gave them legitimate hope.
The moment of awakening
In a candid talk, Mire portrayed himself as an unusual and adaptable economist. He explained that, like many Argentines, he initially studied and taught Keynesian economics. He gradually developed his own views in search of convincing answers to pressing questions. Skilled in mathematical models, he was initially comfortable with the world of Keynesian and New Keynesian macroeconomic equilibrium models. But he became increasingly irritated when he realized that these models kept producing inaccurate results and raising unmet expectations. He then studied neoclassical microeconomic theories of decision-making, market structure, and competition.
He stressed that he had read more than 50 books before he realized that the solution to a successful economy could be found in the theories of the Austrian School.
Millay experienced a “awakening moment” while analyzing historical data on economic development in an early speech by Angus Maddison at the World Economic Forum. In Davos, he realized that per capita wealth barely changed in the 1800s after “year zero” until it suddenly began to grow exponentially during industrialization. To his surprise, he could not explain this growth in terms of the use of labor and capital, diminishing marginal utility, or returns to scale, as the standard growth models suggested.
Instead, Mire concluded that it was the monopoly profits of innovative companies that fueled this development and lifted the masses out of poverty—something he had previously viewed as a negative.
The pandemic obviously politicized Milei a lot. Many young people have since discovered the value of freedom. After realizing this, Milei decided to go into politics and received a lot of media attention for it.
The Rolling Stones
In his performances, he tried to convey his liberal ideas in an appealing way, as enjoyable as a Rolling Stones concert, the current president recalled. His appearances on television became so popular that the country’s left felt threatened. He appeared on television frequently, sometimes as a superhero, sometimes as a serious economist, and even as a populist.
Left-wing representatives persuaded national television to stop giving him a platform. At this point, his sister had another bright idea and suggested to him: “If the boys like your class, then teach it on the street.”
That’s why he founded a new party. The ruling political class threw every possible obstacle against him and his colleagues. It was a battle like David vs. Goliath. But in the end, the majority of voters realized that after more than a hundred years of decline, fundamental changes were needed.
Last November, Milley was elected Argentina’s new president with 55% of the vote; he took office in December.
He inspires people with his market liberal ideas in every known channel. He makes no secret of the fact that he designs his political events to be as entertaining as a Rolling Stones concert to attract and retain young people. He always lays out his goals clearly and objectively in a calm, confident tone.
He argues logically and understandably that as president he wants only what is good for his Argentina. He does not hesitate to explain why his political rivals have a problem with him and others like him: “Socialists are afraid of us because we study, because we read” and “because we enforce facts.” “That’s why socialists are so radical.” His most important goal, he notes, is to move Argentina up 90 places in international economic rankings.
Just six months after taking office, he launched the largest tax adjustment in Argentina’s history. However, he did not mention in his speech that he had abolished 13 ministries, including the Ministry of Culture and the Ministry of Labor. Instead, he established the Ministry of Human Capital to consolidate the tasks of disbanding the ministries.
People’s support
The ultimate goal of liberal thinkers like Miley is to reduce the size of the state apparatus. They see government as the main cause of economic problems and emphasize that social prosperity can be achieved mainly through organic market processes. This explains why Miley is a thorn in the side of socialists, and why Hayek’s Day was not immune to counter-demonstrations from the left. The march started an hour before Miley arrived near his hotel, dotted with rainbow flags and placards with slogans such as “Disruption of social peace: whoever has, gives”. However, it remained calm in front of the hotel due to the street closure.
Miley’s success makes sense, as he is currently the most popular president in South America. This was shown in a representative survey released last week by the well-known public opinion research organization “CB Consultora”.
Thus, 55.7% of Argentines support the president’s course. At first glance, a moderate rating is still enough to rank first on the crisis-ridden continent. The next most popular democratic leader is the Brazilian Lula da Silva, who comes in third.
Polls show that there is one main reason for this success: the tough reforms announced by Mille during his campaign are starting to bear fruit. A recent study by Brazil’s central bank showed that the local currency, the real, has depreciated more against the dollar this year than the Argentine peso. Before Mille took office, such a thing would have seemed unthinkable.
Inflation was 4.2% in May and 25% in December. The budget has been in surplus for five consecutive months, but this has been helped by significant spending cuts. This includes reductions in state subsidies, especially for energy, gas and local public transport.
In addition, more than half of Argentina’s numerous ministries were abolished, transfers to the provinces were drastically reduced, and research and development funding, whose sustainability was questionable, was cut. The public’s acceptance of the foreign policy course was also better than expected. His clear turn to the West, especially the United States and Europe, and his unreserved support for Ukraine and Israel would have been unthinkable under the previous Peronist government.
Despite the continent’s traditional anti-American attitudes, 48% of Argentines support this direction, according to a survey by the Zuban-Cordoba Institute. No other Latin American country has experienced such a marked change in its geopolitical orientation in recent years.
Defending freedom
But Argentina’s main problem is the country’s economic development. In addition, the government has so far abided by parliamentary rules and struggled to gain democratic legitimacy for its reforms. This has led to longer discussions and a lot of debate on proposed legislation. The opposition has reacted angrily to the loss of power.
It remains to be seen when the government will be able to achieve concrete results that will be felt directly by the people, while parts of the middle class are plunged into poverty. For now, Miley’s approval rating remains high, also because his supporters support him not only in his fight against inflation, but also against rampant corruption and cronyism. But patience has its limits, as the protests in front of the Argentine Senate have clearly shown.
But Milley said in his speech that he knew it would be a challenge. Still, he was and is convinced that only rapid shock therapy can get the country back on track.
Mire counters that wages are rising faster than inflation for the first time. And despite a sharp fall in growth in the first quarter, the economy has been growing again on a monthly basis since April. That’s reason for hope. For Mire it’s clear: the socialists are trying to get violent protests in the streets because his policies are a success. And this is only the beginning. His team has already implemented 800 structural reforms, with another 3,000 planned – and we’ll keep fighting.
Finally, Millay addressed the German-speaking liberals gathered at the Hayek Society in Hamburg: “Defend your ideas with passion. Free ideas are so strong that they will eventually win, even if they face resistance at first.” Those present thanked the new winner for his speech with thunderous applause.
Daily News
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