Speech Of Argentina’s President Javier Milei At Davos

Milei stuns WEF: Liberty, not socialism, holds the key to unlocking human prosperity and overcoming global challenges.

January 19, 2024

Good afternoon. Thank you very much.  Today. I am present to inform you that the Western world is facing a significant threat.  It is in danger because those who are supposed to defend the values of the Western world are co opted by a worldview that inevitably leads to socialism and consequently to poverty and economic deprivation.

Unfortunately, in recent decades, motivated by some well intentioned desires to help others and others by the desire to belong to a privileged caste.  The main leaders of the Western world have abandoned the model of freedom for different versions of what we call collectivism.  We are here to tell you that collectivist  experiments are never the solution to the problems that afflict the citizens of the world, but rather they are their cause.

Trust me, there is no one better than us Argentines to provide testimony on these two issues.  When we embraced freedom in 1860, in 35 years, we became the world's first dominant power. 35 years, we became the first world power.  While when we embraced collectivism over the past 100 years, we saw how our citizens began to systematically impoverished themselves until they fell to the hundred and 40th position in the world.

There are about 40 in the world,  but before we can have this discussion, it would be important for us to first look at the data that supports why free market capitalism is not only a possible system to end world poverty, but also the only morally desirable system to achieve it.  If we consider the history of economic progress, we can see how from year zero until around 1800, the world's per capita GDP remained practically constant throughout the reference period.

If one looks at a chart of the evolution of economic growth throughout human history, one would be seeing a chart with the shape of a hockey stick, an exponential function that remained constant for 90 percent of the time, and exponentially shoots up from the 19th century.  The sole exception to this stagnant history was at the end of the 15th century with America's discovery.

Except for this, from year 0 to 1800, global per capita GDP remained stagnant. Without any significant changes.  Now, not only did capitalism generate an explosion of wealth from the moment it was adopted as an economic system, but if one analyzes the data, what is observed is that growth has been accelerating throughout the entire period  during the entire period between year zero and eighteen hundred.

The per capita GDP growth rate remains stable at around 0. 02 percent annually. That is practically without growth.  From 19th century with industrial revolution, growth rate reaches 0. 66%.  Given the current rate, it would require a time span of approximately 107 years to achieve a twofold increase in per capita GDP.

In 1900  1950, growth rate rises to 1. 66 percent annually.  150 growth rate rises to 1. 36 percent annually.  We no longer need 107 years to double per capita GDP, but 66.  If we take the period between 1950 and the year 2000,  we can see that the growth rate was 2. 1 percent annually, which would mean that in just 33 years, we could double the world's per capita GDP.

This trend, far from stopping, remains alive even now.  If we consider the period from 2000 to 2023,  the growth rate increased again at 3 percent per year. Meaning we could double our per capita GDP globally in only 23 years.  Now, when studying per capita GDP from 1800 to today, what is observed is that after the Industrial Revolution, global per capita GDP multiplied by more than 15 times, generating an explosion of wealth that lifted 90 percent of the world's population out of poverty.

We must never forget that by the year 1800, about 95 percent of the world's population lived in extreme poverty, while that number dropped to 5 percent by the year 2020,  prior to the pandemic.  The conclusion is obvious.  Far from being the cause of our problems, free market capitalism as an economic system is the only tool we have to end hunger.

Poverty and destitution throughout the planet.  The empirical evidence is unquestionable. Therefore, as there is no doubt that free market capitalism is superior in productive terms, the left's doxa has attacked capitalism for its moral issues. For being, according to them, as its detractors say, unjust.

They claim capitalism is bad because it's individualistic and collectivism is good because it's altruistic towards others.  And thus they strive for social justice. But this concept that has become trendy in the developed world recently, in my country, it has been a constant in political discourse. For over 80 years,  the issue is that social justice is unfair and doesn't contribute to general well being.

On the contrary, it's an inherently unfair idea because it's violent. It's unfair because the state is financed through taxes and taxes are collected coercively.  Or can any of us confidently say that they pay taxes of their own free will?  This implies that the state is funded through coercion and that the higher the tax burden, the greater the coercion, leading to a reduction in freedom.

Those who promote social justice start from the idea that the economy as a whole is a cake that can be distributed in a different way.  But that cake is not given. It is wealth that is generated in what, for example, Israel Kirchner calls a market discovery process.  If the good or service that a company offers is not desired, that company goes bankrupt unless it adapts to what the market is demanding.

Create a high quality product at a good price or attractive. Succeed and produce more so the market is a process of discovery where the capitalist finds the right direction on the go.  But if the state punishes the capitalists for success. and blocks him in this process, it destroys his incentives and the consequences are that he will produce less and the cake will be smaller, generating harm to society.

Collectivism, by inhibiting discovery and hindering appropriation ties the entrepreneur's hands, preventing him from producing better goods and offering better services. At a better price.  How can it be then that from academia, international orgs, politics and econ theory, an econ system is demonized that not only has lifted 90 percent of the world's pop out of extreme poverty and does so increasingly faster.

But it's also fair and morally superior.  Thanks to capitalism. The world is currently in its best moment. There has never been a moment in history with greater prosperity than the one we live in today.  Today's world is freer, richer, more peaceful and more prosperous than ever before.  This is true for everyone, but particularly for those countries that are free.

Where they respect economic freedom and individual property rights  because free countries are 12 times richer than repressed ones. Saying goes that in countries with freedom, people live better than 90 percent of population in repressed countries.  It has 25 times fewer poor people in the standard format and 50 times fewer in the extreme format.

And if that weren't enough, citizens of free countries live 25 percent longer than citizens of repressed countries.  Now, in order to understand what we come to defend. It is important to define what we mean when we talk about libertarianism.  To define it, I take up the words of the greatest proponent of the ideas of freedom in Argentina, Professor Alberto Venegas Lynch, who says that libertarianism is the unrestricted respect for the life project of others, based on the principle of non aggression and in defense of the right to life.

Liberty and property, whose fundamental institutions are private property, free markets without state intervention, free competition, division of labor, and social cooperation. Where one can only be successful by serving others with goods of better quality at a better price.  In other words, the capitalist, the successful entrepreneur, is a social benefactor who contributes to the well being of society as a whole.

In short, a successful entrepreneur is a hero.  This is the model that we are proposing for the future of Argentina. A model based on the fundamental principles of libertarianism, the defense of life, freedom and property.  If free market capitalism and economic freedom have been remarkable instruments to eradicate poverty globally, and we are presently experiencing the most favorable period in human history, it is worth inquiring why I assert.

That the West is in jeopardy.  I argue that the West is endangered as in countries defending free market, private property and other institutions of libertarianism sectors of the political and economic establishment. Due to errors in their theoretical framework and ambition for power, undermine libertarianism, opening doors to socialism, and potentially condemning us to poverty, misery, and stagnation.

Because it should never be observed that socialism is always and everywhere impoverishing, failed in all countries where attempted.  It was a failure economically. It was a failure socially. It was a failure culturally, and it also killed more than 100 million human beings.  The main problem of the West today is that we not only have to confront those who, even after the fall of the wall and overwhelming evidence, continue to advocate for impoverishing socialism, but also our own leaders, thinkers, and academics who, sheltered in a misguided framework, undermine the foundations of the system that has given us the greatest wealth and prosperity in our history.

The theoretical framework I am referring to is neoclassical economic theory, which designs an instrument unintentionally functional to the intrusion of the state, socialism, and the degradation of society.  The issue with neoclassicals is that since the model they fell in love with doesn't match reality, they attribute the error to the supposed market failure.

Instead of revising the premises of their model  on the text about a supposed market failure, regulations are introduced that only generate distortions in the price system that hinder economic calculation and consequently savings, investment and growth.  This problem essentially lies in the fact that not even supposedly libertarian economists understand what the market is.

Since if it were understood, it would quickly be seen that it is impossible for there to be such a thing as a market failure.  The market is not just a graphical description of a supply curve and a demand curve on a graph.  The market is a mechanism of social cooperation where property rights are voluntarily exchanged.

Thus, considering this definition, discussing market failure is a contradiction in terms.  There is no market failure if transactions are voluntary. The only situation in which there can be a market failure is if there is coercion present. And the only one with the ability to coerce in a generalized manner is the state that possesses the monopoly of violence.

Consequently, if someone considers that there is a market failure, I would recommend that they check if there is state intervention in the middle.  If no state intervention found, suggest reanalyzing as it is definitely wrong.  Market failures do not exist.  An example of the alleged market failures described by neoclassicals are concentrated structures in the economy.

However, without functions that demonstrate increasing returns to scale, whose counterpart are the concentrated structures of the economy, we would be unable to explain the phenomenon of economic growth from 1800 to the present day.  Look how interesting.  Commencing from the year 1800 and extending onwards, with the population experiencing a multiplication of more than eight or nine times.

The per capita income underwent a growth of more than 15 times in magnitude.  To clarify, there are more returns. This caused poverty to drop from 95 percent to 5%.  However, the presence of increasing yields implies the existence of concentrated structures, which would be referred to as, for example, A monopoly in the market economy.

How can it be that something that has generated so much wellbeing, according to neoclassical theory, that is considered a market failure.  Neoclassical economists think outside the box. When the model fails, don't get angry with reality. Get angry with the model and change it.  The dilemma for the neoclassical model is that they aim to enhance market functioning by targeting perceived failures.

By doing so, they not only open doors to socialism, but also undermine economic growth.  For instance, implementing regulations on monopolies, dismantling their profits, and obliterating increasing returns would inevitably annihilate economic growth.  In other words, each time you want to correct a presumed market failure, Inevitably, due to not knowing the market, or because you have become attached to a failed model, you are opening doors to socialism and condemning people to poverty.

However, in the face of the theoretical demonstration that state intervention is harmful, the empirical evidence that it failed because it could not be otherwise, the solution that collectivists will propose is not greater freedom, but greater regulation, generating a downward spiral of regulations until we all become poorer and the lives of all of us depend on a bureaucrat sitting in a luxury office.

Given the resounding failure of collectivist models and the undeniable advances of the free world, socialists were forced to change their agenda.  They left behind the class struggle based on the economic system to replace it with other supposed social conflicts equally harmful to community life and economic growth.

The first of these new battles was the ridiculous and unnatural fight between man and woman.  Libertarianism already establishes equality between sexes.  The cornerstone of our creed states that all men are created equal, that we all have the same unalienable rights granted by the creator, among which are life, liberty, and property.

This radical feminism agenda has led to increased state intervention, hindering the economic process.  It provides jobs to bureaucrats who haven't contributed anything to society, whether through women's ministries or international organizations promoting this agenda.  Another conflict that socialists pose is that of humans against nature.

They argue that humans cause harm to the planet and that it must be protected at all costs, even advocating for population control mechanisms or supporting the controversial agenda of abortion rights.  Unfortunately, these harmful ideas have strongly permeated our society.  Neo Marxists have managed to co opt the common sense of the Western world.

They achieved this through the appropriation of the media, culture, universities, and yes, even international organizations.  The final case is very serious, as it involves institutions with huge influence on the political and economic decisions of the countries. In these multilateral organizations,  fortunately, more of us dare to raise our voices as we see that if we don't confront these ideas head on, the only possible destiny is more state, more regulation, more socialism, more poverty, less freedom, and consequently, a worse quality of life.

Unfortunately, the West has already started down this path.  To many, it may sound ridiculous to suggest that the West has embraced socialism, but this view is only ridiculous if one limits themselves to the traditional economic definition of socialism, which states that it is an economic system where the state owns the means of production.

In my opinion, this definition needs to be updated to reflect the current circumstances from my perspective.  Today, states don't need to control means of production to control every aspect of individuals lives.  With tools such as monetary issuance, debt, subsidies, interest rate control, price controls, and regulations to correct alleged market failures, They can control the destinies of millions of human beings.

This is how we have reached the point where with different names or forms, good parts of the politically accepted offers in most Western countries are generally collectivist variants,  whether they openly declare themselves as communists, fascists, Nazis, socialists, social Democrats, national socialists.

Christian Democrats, Keynesians, Neo Keynesians, Progressives, Populists, Nationalists, or Globalists.  In the end, there are no substantive differences. Everyone argues that the state should control all aspects of individuals lives.  All define a model contrary to the one that led humanity to the most spectacular progress in its history.

We are here today to extend an invitation to the other Western countries to resume the path towards prosperity. Economic freedom, limited government, and unrestricted respect for private property are vital for economic growth.  The impoverishment that collectivism produces is not a fantasy, nor is it fatalism.

It is a reality that Argentinians have known very well for at least 100 years.  Because we have already experienced it, we have already gone through this. Because as I said before, since we decided to abandon the model of freedom that had made us rich, we are trapped in a downward spiral, where we are getting poorer every day.

This is we have already experienced it ourselves, and we are here to warn you about what can happen if Western countries who became rich with the model of freedom continue on this path of servitude.  The Argentine case is the empirical proof that regardless of wealth, natural resources, population capability, education level, or the amount of gold bars in the central bank's coffers, these factors do not guarantee success.

If measures are adopted that hinder the free functioning of markets, free competition, free price systems, if trade is hindered, if private property is attacked, the only possible destination is poverty.  To summarize, I want to convey a message to all entrepreneurs present, and those who are not, but are following us from around the globe, whether they're here or not, physically.

Don't be intimidated by the political caste or the parasites who live off the state.  Don't yield to a political class that only wants to prolong its power and preserve its privileges.  You are social benefactors. You are heroes. You are the creators of the most extraordinary era of prosperity we have ever experienced.

Don't let anyone say ambition is immoral. If you earn money, it's because you provide a superior product, better price, contributing to 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 know that from today you have Argentina as an unconditional ally.

Thank you very much and long life freedom, damn it.

Thanks. Thanks.



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