Better in their words…

Buckle in, this is a speech for the history books. Summary quotes and the transcript are below the video.

Note that “Libertarianism” as used here by Milei is synonymous with the classical liberalism of the US founding fathers such as Thomas Jefferson. Life, liberty, property. The term “classical liberalism”, while sometimes used to describe libertarianism, is actually a modern invention. There is a school of political and economic thought which advocates that we should be using the word liberalism (which is very different from what in the US are called “liberals” or left wing) to describe the true philosophy of individualism. Also keep in mind that Javier Milei self identifies as an anarcho-capitalist in the mold of Murray Rothbard, and you can hear echos of Rothbard’s arguments in this speech by economist/president Milei.

Summary of Javier Milei’s speech in Davos 2024 (in 20 quotes)

1: “Today I am here to tell you that the western world is in danger, and it’s in danger because those who are supposed to defend the values of the west are co-opted by a vision of the world that inexorably leads to socialism, and thereby to poverty.”

2: “Unfortunately, in recent decades, motivated by some well meaning individuals willing to help others, and others motivated by the desire to belong to a privileged class, the main leaders of the western world have abandoned the model of freedom for different versions of what we call collectivism.”

3: “We are here to tell you that collectivist experiments are never the solution to the problems that afflict the citizens of the world, rather they are the root cause.”

4: “The problem with neoclassical (economists) is the model they love so much does not match reality, so they attribute their own mistakes to the supposed market failure, rather than reviewing the premises of their model.”

5: “On the pretext of the supposed market failures, regulations are introduced, which only create distortions in the price system, preventing economic calculation, and therefore, also prevent savings, investment, and growth.”.

6: “Not even supposedly libertarian economists understand what the market is, because if they did understand it, they would quickly see that it’s impossible for something alone the lines of market failure to exist.”

7: “Talking about market failure is an oxymoron, there are no market failures, if transaction are voluntary the only context where it can be a market failure is coercion, and the only one that is able to coerce is the state.”

8: “Faced with the theoretical demonstration that state intervention is harmful, and the empirical evidence that it has failed, the solution proposed by the collectivists is not greater freedom but rather greater regulation. Greater regulation which creates a downwards spiral until we are all poor, and the life of all of us depend on a bureaucrat sitting somewhere in a luxury office.”

9: “Given the dismal failure of collectivist models, and the undeniable advances in the free world, socialists were lead to change their agenda. They left behind the class struggle based on the economic system, and replaced it with other supposed social conflicts, which are just as harmful to life as a community, and to economic growth.”

10: “Today’s states don’t need to directly control the means of production to control every aspect of the life of individuals. With tools like printing money, debt, subsidies, control of the interest rate, price controls, and regulations to correct the so called market failures, they can control the lives and fates of millions of individuals.”

11: “They say that capitalism is evil because it’s individualistic and that collectivism is good because it’s altruistic, of course with the money of others.”

12: “Those who promote social justice, they advocate the idea that the whole economy is a pie that can be shared in better ways, but that pie is not a fixed given, it’s wealth that get generated in what Israel Kirzner for instance calls a Market Discovery Process.”

13: “If the state punishes the capitalists when they are successful, and gets in the way of the (Market) Discovery Process, they will destroy their incentives and the consequence is that they will produce less, and the pie will be smaller, and this will harm society as a whole.”

14: “Collectivism, by inhibiting the (Market) Discovery Process and hindering the appropriation of discoveries, ends up binding the hands of entrepreneurs and preventing them to provide better goods and services at a better price.”

15: “Thanks to free enterprise capitalism, the world is now living its best moment, never in all of mankind’s or humanity’s history there has been a time of more prosperity than today. Today’s world is more free, more rich, more peaceful, and more prosperous than in any other time of human history. And this is particularly true for those countries that respect economic freedom and the property rights of individuals.”

16: “The capitalist, the successful entrepreneur, is a social benefactor, who far from appropriating the wealth of others, contributes to the general well-being of all. Ultimately, a successful entrepreneur is a hero.”

17: “Libertarianism is the unrestricted respect for the project of life of others, based on the non-aggression principle, in defense of the right to life, to liberty, and to property. With its fundamental institutions being: Private property, markets free from state intervention, free competition, the division of labor, and social cooperation. Where you can only be successful by serving others with goods of better quality at a best price.”

18: “The impoverishment produced by collectivism is no fantasy, nor it is fatalism, it’s a reality that we in Argentina have known very well for at least 100 years.” “We have lived through it, and we are here to warn you about what can happen if the countries in the western world -that became rich through the model of freedom-, stay on this road to serfdom.”

19: “We come here today to invite other countries in the western world to return to the path of prosperity. Economic freedom, limited government, and the unrestricted respect for private property, are essential elements for economic growth.”

20: “In concluding, I would like to leave a message for all entrepreneurs and business people here, and for those who are not here in person but are following from around the world:
Do not be intimidated either by the political caste nor by parasites who live off the state. Do not surrender yourself to a political class that only wants to perpetuate itself in power and keep their privileges.
You are social benefactors, you are heroes, you are the creators of the most extraordinary period of prosperity we have ever seen. Let no one tell you that your ambition is immoral. If you make money, it’s because you offer a better product at the best price, thereby contributing to the general well-being. Do not yield to the advance of the state. The state is not the solution, the state is the problem itself. You are the true protagonists of this story.
And rest assured that starting today, you can count on Argentina as an unconditional ally.

Long Live Freedom, Dammit!”

The full transcript:

The conclusion is obvious. Far from being the cause of our problems, free trade capitalism as an economic system is the only instrument we have to end hunger, poverty and extreme poverty across our planet. The empirical evidence is unquestionable. Therefore, since there is no doubt that free enterprise capitalism is superior in productive terms, the left-wing DOXA has attacked capitalism alleging matters of morality. Saying, that’s what the detractors claim, that it’s unjust. They say that capitalism is evil because it’s individualistic and that collectivism is good because it’s altruistic, of course with the money of others. So they therefore advocate for social justice.

But this concept, which in the developed world became fashionable in recent times, in my country has been a constant in political discourse for over 80 years. The problem is that social justice is not just and it doesn’t contribute either to the general wellbeing. Quite on the contrary, it’s an intrinsically unfair idea because it’s violent. It’s unjust because the state is financed through tax and taxes are collected coercively. Or can any one of us say that they voluntarily pay taxes? Which means that the state is financed through coercion. And the higher the tax burden, the higher the coercion and the lower the freedom.

Those who promote social justice, the advocates, start with the idea that the whole economy is a pie that can be shared differently. But that pie is not a given. It’s wealth that is generated in what Israel Kirzner, for instance, calls a market discovery process. If the goods or services offered by a business are not wanted, the business will fail unless it adapts to what the market is demanding. If they make a good quality product at an attractive price, they will do well and produce more. So the market is a discovery process in which the capitalists will find the right path as they move forward. But if the state punishes capitalists when they’re successful and gets in the way of the discovery process, they will destroy their incentives and the consequence is that they will produce less, the pie will be smaller and this will harm society as a whole. Collectivism by inhibiting these discovery processes and hindering the appropriation of discoveries ends up binding the hands of entrepreneurs and prevents them from offering better goods and services at a better price.

So how come that academia, international organizations, economic theory and politics demonize an economic system that has not only lifted out of extreme poverty 90% of the world’s population, but has continued to do this faster and faster? And this is morally superior and just. Thanks to free trade capitalism, it is to be seen that the world is now living its best moment. Never in all of mankind’s or humanity’s history has there been a time of more prosperity than today. This is a true for all. The world of today has more freedom, is rich, is more peaceful and prosperous. And this is particularly true for countries that have more freedom and have economic freedom and respect the property rights of individuals. Because countries that have more freedom are 12 times richer than those that are repressed. And the lowest decile in terms of distribution in free countries are better off than 90% of the population of repressed countries. And poverty is 25 times lower and extreme poverty is 50 times lower. And citizens in free countries live 25% longer than citizens in repressed countries.

Now what is it that we mean when we talk about libertarianism? And let me quote the words of the greatest authority on freedom in Argentina, Professor Alberto Benegas Lynch Jr. Who says that, “Libertarianism is the unrestricted respect for the life project of others based on the principle of non-aggression, in defense of the right to life, liberty and property. Its fundamental institutions being private property, markets free from state intervention, free competition, the division of labor and social cooperation. As part of which, success is achieved only by serving others with goods of better quality or at a better price.” In other words, capitalists, successful business people are social benefactors, who far from appropriating the wealth of others contribute to the general wellbeing. Ultimately, a successful entrepreneur is a hero.

And this is the model that we are advocating for the Argentina of the future, a model based on the fundamental principles of libertarianism. The defense of life, of freedom and of property. Now, if free enterprise capitalism and economic freedom have proven to be extraordinary instruments to end poverty in the world and we are now at the best time in the history of humanity, it is worth asking why I say that the West is endangered. And I say this precisely because in those of our countries that should defend the values of the free market, private property and the other institutions of libertarianism, sectors of the political and economic establishment. Some due to mistakes in their theoretical framework and others due to a greed for power are undermining the foundations of libertarianism opening up the doors to socialism and potentially condemning us to poverty, misery and stagnation.

It should never be forgotten that socialism is always and everywhere an impoverishing phenomenon that has failed in all countries where it’s been tried out. It’s been a failure economically, socially, culturally and it also murdered over 100 million human beings. The essential problem in the West today is not just that we need to come to grips with those who even after the fall of the Berlin Wall and the overwhelming empirical evidence, continued to advocate for impoverishing socialism. But there’s also our own leaders, thinkers and academics who are relying on a misguided theoretical framework, undermine the fundamentals of the system that has given us the greatest expansion of wealth and prosperity in our history.

The theoretical framework to which I refer is that of neoclassical economic theory. Which designs a set of instruments that unwillingly or without meaning to ends up serving the intervention by the state’s socialism and social degradation. The problem with neoclassicals is that the model they fell in love with does not map reality, so they put down their mistakes to supposed market failures rather than reviewing the premises of the model. On the pretext of a supposed market failure, regulations are introduced which only create distortions in the price system, prevent economic calculus and therefore also prevent saving, investment and growth.

This problem lies mainly in the fact that not even supposedly libertarian economists understand what the market is. Because if they did understand, it would quickly be seen that it’s impossible for there to be something along the lines of market failures. The market is not a mere graph describing a curve of supply and demand. The market is a mechanism for social cooperation where you voluntarily exchange ownership rights. Therefore, based on this definition, talking about a market failure is an oxymoron. There are no market failures. If transactions are voluntary, the only context in which there can be a market failure is if there is coercion. And the only one that is able to coerce generally is the state, which holds a monopoly on violence.

Consequently, if someone considers that there is a market failure, I would suggest that they check to see if there’s state intervention involved. And if they find that that’s not the case, I would suggest that they check again because obviously there’s a mistake. Market failures do not exist. An example of these so-called market failures described by the neoclassicals are the concentrated structures of the economy. However, without increasing returns to scale functions, whose counterpart are the concentrated structures of the economy, we couldn’t possibly explain economic growth since the year 1800 until today. Isn’t this interesting? Since the year 1800 onwards, with population multiplying by eight or nine times, per capita GDP grown by over 15 times. So there are growing returns which took extreme poverty from 95% to 5%.

However, the presence of growing returns involves concentrated structures, what we would call a monopoly. How come then that something that has generated so much wellbeing for the neoclassical theory is a market failure? Neoclassical economists think outside of the box. When the model fails, you shouldn’t get angry with reality but rather with the model and change it. The dilemma faced by the neoclassical model is that they say they wish to perfect the function of the market by attacking what they consider to be failures. But in so doing, they don’t just open up the doors to socialism but also go against economic growth. An example, regulating monopolies, destroying their profits and destroying growing returns automatically would destroy economic growth. In other words, whatever you want to correct, a suppose market failure inexorably, as a result of not knowing what the market is or as a result of having fallen in love with a failed model, you’re opening up the doors to socialism and condemning people to poverty.

However, faced with the theoretical demonstration that state intervention is harmful and the empirical evidence that it has failed couldn’t have been otherwise. The solution to be proposed by collectivists is not greater freedom, but rather greater regulation. Which creates a downward spiral of regulations until we’re all poorer and the life of all of us depends on a bureaucrat sitting in a luxury office. Given the dismal failure of collectivist models and the undeniable advances in the free world, socialists were forced to change their agenda. They left behind the class struggle based on the economic system and replaced this with other supposed social conflicts which are just as harmful to life as a community and to economic growth. The first of these new battles was the ridiculous and unnatural fight between man and woman. Libertarianism already provides for equality of the sexes. The cornerstone of our creed says that all humans are created equal. That we all have the same unalienable rights granted by the creator, including life, freedom and ownership.

All that this radical feminism agenda has led to is greater state intervention to hinder the economic process, giving a job to bureaucrats who have not contributed anything to society. Examples, ministries of women or international organizations devoted to promoting this agenda. Another conflict presented by socialists is that of humans against nature. Claiming that we human beings damage the planet, which should be protected at all costs. Even going as far as advocating for population control mechanisms or the bloody abortion agenda. Unfortunately, these harmful ideas have taken a stronghold in our society. Neo-Marxists have managed to co-opt the common sense of the Western world. And this they have achieved by appropriating the media, culture, universities and also international organizations. The latter case is the most serious one probably because these are institutions that have enormous influence on political and economic decisions of the countries that make up the multilateral organizations.

Fortunately, there’s more and more of us who are daring to make our voices heard. Because we see that if we don’t truly and decisively fight against these ideas, the only possible fate is for us to have increasing levels of state regulation, socialism, poverty and less freedom. And therefore, we’ll be having worse standards of living. The West has unfortunately already started to go along this path. I know to many it may sound ridiculous to suggest that the west has turned to socialism. But it’s only ridiculous if you only limit yourself to the traditional economic definition of socialism, which says that it’s an economic system where the state owns the means of production. This definition, in my view, should be updated in the light of current circumstances. Today states don’t need to directly control the means of production to control every aspect of the lives of individuals. With tools such as printing money, debt, subsidies, controlling the interest rate, price controls and regulations to correct the so-called market failures, they can control the lives and fates of millions of individuals.

This is how we come to the point where, by using different names or guises, a good deal of the generally accepted political offers in most Western countries are collectivist variants. Whether they proclaim to be openly communists, fascists, Nazis, socialists, social Democrats, nationalists, socialists, Democrat Christians or Christian Democrats, neo-Keynesians, progressive, populists, nationalists or globalists. At bottom, there are no major differences. They all say that the state should steer all aspects of the lives of individuals. They all defend a model contrary to that one which led humanity to the most spectacular progress in its history.

We have come here today to invite the rest of the countries in the Western world to get back on the path of prosperity, economic freedom, limited government and unlimited respect for private property, essential elements for economic growth. And the impoverishment produced by collectivism is no fantasy nor is it an escapable fate. But it’s a reality that we Argentines know very well. We have lived through this, we have been through this, because as I said earlier, ever since we decided to abandon the model of freedom that had made us rich, we have been caught up in a downward spiral as part of which we are poorer and poorer day by day.

So this is something we have lived through and we are here to warn you about what could happen if the countries in the Western world that became rich through the model of freedom stay on this path of servitude. 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 skilled your population may be or educated 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.

Therefore, in concluding, I would like to leave a message for all business people here and for those who are not here in person but are following from around the world. Do not be intimidated either by the political class or by parasites who live off the state. Do not surrender to a political class that only wants to stay in power and retain its privileges. You are social benefactors, you’re heroes, you are the creators of the most extraordinary period of prosperity we’ve ever seen. Let no one tell you that your ambition is immoral. If you make money, it’s because you offer a better product at a better price, thereby contributing to general wellbeing. Do not surrender to the advance of the state. The state is not the solution, the state is the problem itself. You are the true protagonists of this story. And rest assured that as from today, Argentina is your staunch, unconditional ally. Thank you very much and long live freedom, dammit.