Don’t confuse Argentina’s right-wing statism with economic freedom

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Just last month, I wrote about Argentina’s bleak economic outlook and criticized supposed center-right president Mauricio Macri for failing to achieve meaningful economic liberalization.

And reform is desperately needed.

According economic freedom of the worldArgentina is one of the most statist nations on the planet (the only nations doing worse are Libya and Venezuela).

For all intents and purposes, Argentina suffers from decades of bad politics.

Argentina is a sobering example of how state policies can turn a rich nation into a poor one. … After World War II, Argentina was one of the 10 richest nations in the world. But Juan Peron then seized power and initiated Argentina’s slide towards majority government, which eroded the country’s competitiveness and hampered growth.

To put it mildly, the country is an economic tragedy and this should be a lesson to all countries in the importance of good policy.

Yet why am I writing about Argentina again after last month’s analysis?

Because a story in The New York Times discusses the country’s upcoming presidential election and manages to paint a grotesquely inaccurate picture of what’s going on in the country. We are supposed to believe that Macri was a free market fundamentalist.

Since taking office more than three years ago, President Mauricio Macri has broken with the fiscal populism that has dominated Argentina for much of the past century, embracing the grim arithmetic of economic orthodoxy.

Mr. Macri cut subsidies… “It’s a neoliberal government… It’s a government that doesn’t favor the people.” …the tribulations unfolding under the disintegrating roofs of the poor are a predictable dimension of Mr. Macri’s detour from left-wing populism. He vowed to reduce Argentina’s monumental deficits by diminishing state largesse. …M. Macri’s presidency…was meant to provide an escape from the wreckage of overspending.

And we are also supposed to believe that his failed free market policies are paving the way for a return to left populism.

As the October elections approach, Mr Macri faces the growing prospect of a challenge from the president he succeeded, Cristina Fernández de Kirchner… Her return would sound like a rebuke to his market-oriented reforms while potentially returning Argentina to their usual situation. preserve: left populism.

For what it’s worth, I suspect Kirchner will win the next election. This part of the article is therefore correct.

But the part about free market reforms is ridiculously inaccurate.

You don’t have to believe me. Let’s look at the Argentinian data from economic freedom of the world. I may be being dogmatic, but I don’t think a small improvement in 2015 followed by a setback in 2016 qualifies as “diminishing state generosity.”

The bottom line is that Macri should have been bold and made sweeping changes once he was in charge. Like Chile after the fall of the Marxist regime of Allende.

These reforms would no doubt have triggered protests. But if they became law, they would have produced tangible results.

Instead, Macri chose a half-hearted approach and the economy remained stagnant. Yet because many voters think he enacted reforms, they blame him and they blame free markets.

The net result is that they will likely vote for Kirchner, which will likely mean even more statism for the long-suffering Argentine people.

PS What is happening in Argentina is not an isolated example. It is very common for supposedly right-wing politicians to choose bad policies, which sets the stage for left-wing electoral victories. Look at how Bush’s statist policies created the conditions for Obama’s victory. Or how Sarkozy prepared the ground for Hollande in France. Or how Theresa May’s recklessness in the UK can lead to victory for Jeremy Corbyn.

This article from International Liberty has been republished with permission.

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