Argentine President Javier Milei didn’t promise an economic revival for all of Argentina, because significant chunks of the Argentine economy were invested in low-profit or even loss-making industries as the country followed “traditional” South American economic advice. Tim Worstall celebrates some of the belated losses in those deadweight areas of the economy:
Argentina has, for decades now, been making itself poorer by following — effectively — fascist economic policy. That whole process of trying to make everything at home, not importing, being self-reliant in manufactures and so on. The effect being that everything is made by companies of sub-optimal size and therefore consumers can only gain access to expensive shite.
So along comes a liberal — Milei — who lets consumers buy what they wish to buy from whoever, whereever. The result is that those inefficient, expensive, manufacturing firms close down as people buy the better, cheaper, stuff from abroad. The people are better off because they get better, cheaper, stuff. Not that expensive shite from the domestic producers.
Now, true, those jobs go. But those workers can go and do something else. Which they will too. In fact, they are — the unemployment rate is falling.
So, who loses out here? Obviously, the domestic capitalists, the people who own the now bust factories. Which, well, the correct reaction is probably Har Har. If your wealth is based upon producing expensive shite your customers are forced to buy then why shouldn’t we celebrate when you lose the lot?
We can — and should — take our analysis that one step further too. If the absence of the trade restrictions harms the domestic capitalists then who benefitted from the trade restrictions? The domestic capitalists, obviously. Which is how that infant industry protection, that insistence upon self-reliance, how fascist economics always does work out — the people who benefit are the domestic capitalists. And why in buggery would we want to protect them from the effects of free trade?
