The controversial Argentine economist Javier Milei is the politician of the moment on the global stage. This character, practically unknown to most before the last few months, could become the next president of Argentina, putting a tombstone on that version of Peronism that is Kirchnerism.
In presidential primaries of August (the Argentine elections take place in three rounds) Milei scored an extraordinary performance. If it happens again, as seems likely, next October 22nd it could take it to the final run-off at the end of the month with a good chance of going to the Casa Rosada.
It is estimated that from August on worsening of the Argentine crisis and the march of hyperinflation could bring other decisive consensus to Milei.
Milei is an ultra-liberalist and its teachers are the thinkers of the Austrian school of economics. For the moment his presidential program is essentially based on statements of principle and remains rather vague on concrete measures.
And for the moment the main commitment in his program is to replace the peso with the US dollar, even if it has not yet expressed itself in defining the timing and methods of execution of this policy.
Discovering Milei
As we said, Milei, until a few months ago, nt was in the global mainstream. In Italy, although very close to Argentina, only the militants of the liberal movement knew his thoughts and initiatives.
Therefore in Italian there is very little of the writings of this figure who could take the lead of one of the most important nations on our planet where, among other things, there is a large community of Italians.
In 2021 goWare, together with the Bolognese publisher Tramedoro, published an anthology of Milei's writings and essays, translated and edited by Leonardo Facco who has followed Milei for many years. The book has a provocative title and reflects the effervescent and combative personality of the Argentine economist: Long live freedom,
Dear! Short anthology of essays in defense of individual freedoms and property rights. The book is available in all online bookstores in paper and digital.
From this publication goWare has extracted for FIRSTonline readers a passage that gives an account of the basic idea that could guide Milei's action if he went up to the Casa Rosada at the beginning of November.
The essay is about the centrality of the market in the author's economic and political vision. The book also contains his interventions on crucial issues of the Argentine and global scenario. Here's what Milei writes.
. . .
Milei: iThe market is a continuous process of discovery
There are two different ways of approaching the capitalist market, even among the same economists who consider the free price system the best mechanism for carrying out allocative functions in an economy.
Perfectly competitive markets
On the one hand there is the typical case of microeconomics, in which, in perfectly competitive markets, the economy operates with perfect knowledge. Thus, an individual's choice is the best among a set of known alternatives. Given the prices of all goods, each decision maker can transform his budget into a series of alternative goods and services and, among all these, select the one he considers preferable, so that this selection constitutes the set of purchases and sales that carries out on the market. In this perspective, the feat of a competitive market is that the goods bought and sold fit together perfectly thanks to equilibrium prices known to all. Every attempt to buy and sell is successful. Goods that can be sold at a price that is advantageous to both the seller and the buyer. Therefore, in this market setting there are no surprises and therefore no extraordinary profits or losses.
The Austrian School
On the other hand, this vision contrasts sharply with the position of the Austrian School, which characterizes the market as a process of discovery, where every price paid or every income received is part of a system, in which every transaction is the result of simultaneous discoveries made by all parties involved.
Now, the market consists of one continuously evolving succession of transactions, which emerge as a result of the interaction of offers. At any moment, the goods purchased by buyers and the incomes received by sellers represent the discoveries made up to that point by one or the other actor. They also express the mistakes that they have made and that others would have made if they had been aware of the real possibilities of the market.
In this context, entrepreneurial discoveries can continue to be made to the extent that they exist without taking advantage of opportunity for a mutually beneficial exchange between any pair of market participants and with respect to any pair of goods they own. Furthermore, in a market with multiple goods, the discovery of an opportunity will produce a cascade of new changes in individuals' buying and selling decisions, as well as new opportunities for mutually beneficial exchanges. Thus, the market process consists precisely in succession of induced discoveries, a process that would only stop in the absence of exogenous changes. That is, when all the opportunities for mutually beneficial trade have already been exploited and there is no place for further trade breakthroughs.
The spontaneous interaction of the subjects
Therefore, according to the Austrian School, unlike the first, the emphasis is on ignorance (non-knowledge) that hides behind every decision made.
Furthermore, the success of the market does not consist in its ability to produce exactly a set of equilibrium prices leading to an infinite number of perfect decisions (each taken with perfect knowledge of all prices). Rather, success in the market is judged by its ability to generate discoveries.
Starting at any moment from a specific context of mutual ignorance between market participants, the functioning of the market will spontaneously offer the incentives and opportunities that will end up leading these participants to squander more and more the mists of not knowing.
In fact, it is these fogs that are responsible for the market's inability to reach a perfect equilibrium, and it is precisely the fact that the market continuously generates the intuitions that dispel them that allows the degree of adjustment actually necessary to be achieved.
Knowledge is an outcome
Finally, the rational justification for the use of competition arises from the lack of advance knowledge of the facts that determine the actions of competitors. For sport, as well as for exams or poetry prizes, it would be useless to organize a competition if we knew in advance who the winner would be. Therefore, the competition must be regarded as a procedure for discovering facts that, without competition, would be unknown to everyone or, at least, would not be used.
Two corollaries arise immediately from the above formulation: 1) competition is precious due to its results being unpredictable and different from those deliberately pursued; 2) the generally positive effects of competition include disappointment or lack of satisfaction of some expectations or intentions.
From: Javier Milei, Long live freedom, Carajo! Short anthology of essays in defense of individual freedoms and property rights, goWare-Tramedoro, Florence.-Bologna, 2021, pp. 331-33
