Business Maverick


After the Bell Davos, Day 4 — Long live freedom, dammit!

After the Bell Davos, Day 4 — Long live freedom, dammit!
Javier Milei, Argentina's president, departs the Congress Hall on day two of the World Economic Forum in Davos, Switzerland, on Wednesday, 17 January, 2024. The annual Davos gathering of political leaders, top executives and celebrities runs from January 15 to 19. (Photo: Hollie Adams/Bloomberg via Getty Images)

Argentina’s president Javier Milei’s speech at Davos, his first excursion out of his country after being elevated to the presidency only a month ago, constitutes a signal that he has no intention of sugar-coating his message in the face of a hostile parliament and tough trade unions. 

Before Argentina’s new president Javier Milei gave his speech to a crowded Davos hall on Wednesday, I wondered what the protocol might be if you, say, just happened to bring a chainsaw to your Davos debut. Sadly, Milei didn’t bother recreating his now-famous election stunt of flaunting tree-felling equipment at his election rallies. 

But he might as well have.

I don’t think I have ever heard such full-throated, unequivocal, enthusiastic, evangelical support for untrammelled free markets by any speaker at any WEF function ever — let alone a president. 

The Davos faithful are often accused of being the super-rich who casually and thoughtlessly tread on the rights of the world’s poor. 

However, the organisation is imbued with the values of European social democracy and it can sometimes be almost painfully righteous.

Yet, the criticism of the gathering persists. 

As it does every year on the eve of the Davos meeting, British NGO Oxfam published a castigating report about the awful, despicable rich, pointing out that the world’s five wealthiest men have seen their fortunes more than double since 2020 at the rate of about $14-million an hour. 

Well, Javier wasn’t having any of that. 

He told the 0.001%: “You are social benefactors. You are heroes. You’re 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 well-being.”

This was part of a centuries-long academic explanation of the global economic system, except it was delivered with a hammer rather than a chainsaw. 

There is no such thing, he said emphatically, as market failure.

His own country was an “empirical demonstration that, no matter how rich you may be, or how much you may have in terms of natural resources, or how many bars of gold you may have in the central bank; if you adopt measures 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.”

The speech, marking Milei’s first excursion out of his country after being elevated to the presidency only a month ago, constitutes a signal that he has no intention of sugar-coating his message in the face of a hostile parliament and tough trade unions. 

At times, he comes across as a touch paranoid. 

Javier Milei, Davos

President of Argentina, Javier Milei. (Photo: Hollie Adams/Bloomberg via Getty Images)

“Today, I’m here to tell you that the Western world is in danger. And it is endangered 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.”

In closing, he said, “Do not be intimidated, either by the political caste 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. 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. Long live freedom, dammit!”

At first, I think people didn’t know what to make of this stick of human dynamite tossed into one of the most proper and cautious of conferences. Of course, the reasons and circumstances why a proto-libertarian academic could suddenly become the country’s leader are unique. 

Argentina has suffered several bouts of hyperinflation over the years, and they have returned with a vengeance. Year-on-year inflation in Argentina topped 211% in December, the highest level in more than three decades. 

Read more in Daily Maverick: Argentina to issue 20,000 peso bills as inflation eclipses 211%

The Argentine economy has been plagued for years by Peronism, an odd mix of national populism and nationalist socialism. In some ways, it reminds me of the economics of the ANC: excessively righteous, heavily labour-supportive, keen on state planning, and supportive of state/business constructs. 

The one organisation that is not complaining about Milei’s radicalism is the IMF, which granted the previous administration a generous $43-billion loan programme. 

Milei has moved rapidly to slash Argentina’s fiscal deficit and deregulate the economy, including devaluing the currency by 54%. 

The Financial Times reports that the IMF delivered a vote of confidence in Milei’s plans last week as its technical staff approved a $4.7-billion disbursement, enabling it to repay the fund for earlier lending. 

Speaking in Davos, IMF head Kristalina Georgieva said of Milei’s speech that the devaluation was one of his administration’s “bold” moves and that a “strong fiscal anchor” was an important condition for economic improvement.

To say that the corporate titans at Davos liked his speech would be an understatement. 

The FT quoted Daniel Pinto, JPMorgan’s president and chief operating officer, saying Argentina’s new government “may be creating a new beginning for the country, bringing an end to 80 years of economic deterioration”. 

Pinto warned of a “tough year” ahead, however, as Milei’s plans “require the population to be willing to go through the pain of [austerity]”.

Milei does have an unusual problem since his party holds a minority in the parliament; legislative change will require agreement with other parties, including a more formal right-wing party, the Republican Proposal, led by Patricia Bullrich. 

The gossip in Davos is that Milei constitutes a version of populist backlash at successive left-wing governments and parties that have ruled for decades – yet a very peculiar type of backlash. 

He is often compared to former Brazilian president Jair Bolsonaro who narrowly lost his election just over a year ago. Or US presidential contender Donald Trump.  But even Milei’s detractors say he is far smarter than both.

For South Africans, the overlap between Peronism and the ANC’s national socialism means it will be worth watching Argentina’s progress – or decline. 

This, too, could be our future. DM


Comments - Please in order to comment.

  • Andre Grobler says:

    He is not wrong… except it is those very rich who work very hard at Davos to give the poor socialism and the rich free reign on the world’s resources… so yea freemarket… sure… but the super rich aren’t into freemarket anymore, except for themselves of course

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