Just a couple of weeks ago, the government of Javier Milei began a new edition of the Argentine superclassic in which those eager to open the economy to subject it to the rigors of the market face protectionists who are determined to keep it tightly closed. Judging by what has happened on other occasions, the libertarians will soon score some eye-catching goals, but then they will lose to those who, to survive, depend on high tariff barriers and a multitude of arrangements that serve to defend them against foreign intruders. Such figures have good reason to hope that, when the game is over, the country will be even more isolated from international markets than it had been before. Will we see a repeat of this old story? It is possible, especially if the libertarian government makes too many political mistakes.
Javier Milei and his faithful economic operator Luis Caputo are finding it relatively easy to reorganize national finances and thus put an end to the chaos in which the crazy voluntarism of a Kirchnerist government had left them, convinced that their “small money plan” would allow them to buy an electoral victory. The duo has already achieved a lot by sticking to certain basic principles without worrying at all about the eventual political costs of the drastic measures they have had to take. To almost everyone’s surprise, such costs have not been exorbitant. The thing is, as Milei said, “we put a lock on the fiscal balance and swallowed the key.” Thanks to the intransigence thus assumed, they have managed to stop inflation, abruptly lower the country risk index and begin to attract investments for certain sectors, such as Vaca Muerta and mining, which enjoy comparative advantages.
But this is only the first phase, by far the easiest, of a project that is extremely ambitious. What Milei wants is to make Argentina a true productive power that is capable of actively participating in the most demanding international markets. Sometimes the president and the Minister of Economy seem to believe that, once the problems posed by inflation and other financial ills that those in charge of the State are in a position to solve have been resolved, businessmen, finally freed from the chains that have immobilized them from long ago, Who knows how many years, they will immediately begin to emulate their equivalents from other latitudes. Unfortunately, many, perhaps most, will never be able to do so. They are like athletes who have trained for boxing, let’s say, who are forced to try their luck as elite soccer players; Some would be successful, but these would be exceptional cases.
As things stand, Argentina is one of the most protectionist, and therefore least competitive, countries on the planet, and there are many who pray that it will continue to be so until the Greek calends. While virtually everyone, with the presumed exception of those who adhere to the ultranationalist fantasy of “living with our own” that, more than forty years ago, was popularized by Aldo Ferrer, recognizes that the order that has been created is radically dysfunctional and that to put an end to the progressive impoverishment of the population it would be necessary for Argentina to integrate into the world market, there are many who are aware that, for themselves, a partial opening like the one that has begun and that some already described as premature, will have disastrous consequences for the so-called national “productive sector.”
Thus, although Milei and Caputo win the intellectual battle without having to do much more than allude to international experience in the matter and how essential it is for local entrepreneurs to be at least as productive as European ones, this does not mean May they be given the chance to defeat those determined to prolong the life of the existing system until further notice. As has always happened, those harmed by the reduction of barriers will accuse them of “industricide”, of having allowed themselves to be bought by sinister foreign plutocrats who, for mysterious reasons, fear competing with Argentine rivals supported by the State and, needless to say, of treacherously destroying to hundreds of thousands of SMEs and, with them, eliminate countless jobs.
While the libertarian government is completely right when it points out that, unless the private sector becomes much more competitive, Argentina will have to resign itself to being a gigantic slum, so are the defenders of the status quo when they insist that they need more time to prepare to face the many challenges that a broad opening would pose.
José Luis Espert was not wrong when he criticized, with the verbal brutality that is his trademark, the “brazens” of the Argentine Industrial Union, who “always lack something to compete,” but if all the walls are collapsing today that have served to protect them from foreign competition, tomorrow many would fall into bankruptcy, which would have a social and political impact decidedly greater than that caused by the financial adjustment. To make the situation in which businessmen already find themselves even more alarming, the dollar has become much cheaper in recent months, which has made it possible to repeat the “give me two” of half a century ago and the Menemist years by stimulating tourism. shopping not only in the Latin American neighborhood but also in Europe and North America, the tax pressure has not yet been relieved and the labor laws that make the trial industry so lucrative have not been modernized. Despite Milei, Caputo, Espert and others, no matter how predictable they may be, the complaints of those harmed by what is happening are legitimate.
If their own personal interests were not at stake, businessmen – “the captains of industry” said Raúl Alfonsín – would completely agree with Milei who, in addition to being very much in favor of a competitive market economy, believes that it is their responsibility to play a leading role in the national drama, thus displacing the politicians of “the caste” who are accustomed to believing themselves to be the main benefactors of the people. For the libertarian, creative entrepreneurs, men and women in some ways comparable to Elon Musk and the billionaires of the Californian technology giants, are destined to be the heroes of the war against the decadence that in their opinion has been caused by “socialism” and its variants not only in Argentina but also in all other countries of the Western community.
However, after being formed in a corporatist and populist culture that has been hostile to the free market, there is a shortage of local entrepreneurs who resemble the economic warriors of the Mileist imagination. Although many are “experts in regulated markets” and therefore skilled in the art of negotiating with politicians and officials, corrupt or not, few have had to compete directly with businessmen from abroad who have always had to privilege the quality of their products. products and minimize the costs of manufacturing them.
The lack of trained labor will also pose problems that are difficult to overcome. The most successful economies, that is, the most productive, have always stood out for the high quality of their workers who, in many cases, especially in countries such as Japan, Germany, the United States and South Korea, tend to make very valuable contributions. to the companies that employ them by contributing to improving the efficiency of the whole. They can do so not only because they feel like full members of a team to which they owe loyalty but also because they have been formed by a good educational system and, even more importantly, by a popular culture in which individual effort is privileged.
Although Milei and his companions boast that they are waging a “cultural battle” against leftism in the name of freedom, they often seem more interested in fighting “woke” extravagances than against the maudlin facileness that is the most dangerous enemy of leftism. project they have in mind. It is because, once the financial architecture is rebuilt and strengthened, the population could fall into the temptation of returning to populism that offers what at first glance are immediate solutions to problems of daily life that, in the long run, are counterproductive.
The fear that something like this will happen continues to worry many potential investors who are enthusiastic about Milei’s ideology but are not yet willing to take the risk of backing it with money. The possibility of Cristina and her friends returning to power also makes them hesitate, which is why the mere possibility that libertarians are thinking of making a pact with her because they assume that it would be in their best interest to have her as their main adversary, is influencing the progress of the economy. They have not forgotten that Mauricio Macri and his strategists thought it was great to have Kirchnerism as the alternative to their own government and that, when the economy began to creak, the electorate chose to trust again in the ruinous populist recipes sold by the doctor and its adherents.
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