Benzinga - by Piero Cingari, Benzinga Staff Writer.
Argentine President Javier Milei delivered a fervent defense of free-market capitalism and issued a stark warning about the perils of socialism at the World Economic Forum Wednesday, invoking the economic principles of Nobel laureate Milton Friedman.
“The Western world is in danger” because its defenders are co-opted by “a vision of the world that inexorably leads to socialism and thereby to poverty,” Milei said.
Milei, a staunch libertarian, argued that capitalism, not socialism, holds the key to eradicating global hunger and poverty. “Free trade capitalism as an economic system is the only instrument we have to end hunger, poverty, and extreme poverty across our planet,” he said, challenging the notion that the state is the solution to economic woes.
Drawing on historical data, Milei highlighted capitalism’s role in drastically reducing global poverty over the last two centuries. Ninety-five percent of the world’s population lived in extreme poverty in 1800, a figure that plummeted to 5% by 2020, he said. This, according to Milei, is a testament to the effectiveness of the capitalist model.
Elected as Argentina's president in November, Milei took the reins from a leftist administration amid rising hyperinflation in the country. Milei initiated a peso devaluation exceeding 50%, aiming to match the peso with the rates of a substantially devalued parallel market. Earlier this month, International Monetary Fund staff and Argentine officials agreed on the seventh review under the nation's $44-billion extended fund facility arrangement, which will grant Argentina to access approximately a tranche of $4.7 billion.
Argentine stocks, as tracked by the Global X MSCI Argentina ETF (NYSE:ARGT), have rallied by more 20% since Milei’s victory.
Related Link: Argentine President Milei Shocks With Plan To Dismantle Central Bank Amid Skyrocketing Inflation, IMF Backs Move
Milei Critiques Socialist Policies, Taxes At Davos
The Argentine leader said his country’s experience is an empirical demonstration of how socialist policies can lead to economic downturns regardless of a nation’s inherent wealth or resources. Milei pointed out that despite Argentina’s natural resources and skilled population, the adoption of socialist models has not resulted in prosperity or progress.The Argentine leader took a firm stance against the notion of social justice as propagated by socialist ideologies, denouncing it as inherently unfair and violent due to its reliance on coercive taxation.
“The higher the tax burden, the higher the coercion and the lower the freedom,” Milei said, emphasizing the need for a smaller state apparatus and greater economic freedom.
Milei encouraged entrepreneurs, lauding them as the true drivers of progress and prosperity. He reassured them of Argentina’s unwavering support, urging them not to be deterred by state intervention.
“If you make money, it’s because you offer a better product at a better price, thereby contributing to general well-being. 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 protagonist of this story, and rest assured that, as from today, Argentina is your staunch, unconditional ally,” Milei said.
Chart: Argentina’s Equity ETF Rallied By Over 20% Since Milei’s Election In November
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Photo via Shutterstock.
Watch Milei’s full speech at the World Economic Forum in Davos.
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