A group of over 100 prominent economists has cautioned that if the radical rightwing economist Javier Milei were to be elected as president of Argentina, it could potentially lead to additional economic “devastation” and social turmoil in the South American nation.
A group of economists released an open letter prior to Argentina’s crucial election on November 19. In the letter, they acknowledged the strong desire for economic stability among voters, given the country’s history of frequent financial crises and persistent high inflation.
Forty percent of the population is currently living in poverty and there is an annual inflation rate of nearly 140%. Milei has promised to address this crisis by defeating his opponent, Sergio Massa, who is the finance minister of Argentina. He plans to take drastic measures such as eliminating the central bank and adopting the use of the US dollar as the official currency.
“Despite their initial appeal, seemingly simple solutions are cautioned to have adverse effects in the real world, causing greater harm in the short term and limiting potential policy options in the long term,” stated a letter written by notable economists like Thomas Piketty from France, Jayati Ghosh from India, Branko Milanović from Serbia, and former finance minister José Antonio Ocampo from Colombia.
The correspondence stated that Milei’s suggestions, though advertised as a drastic change from standard economic methods, were truly based on laissez-faire principles. These ideas were deemed to be filled with dangers that could greatly harm both the economy and the citizens of Argentina.
During his time campaigning, Milei, who identifies as an anarcho-capitalist, has used a chainsaw as a representation of his goal to decrease subsidies and significantly decrease the amount of government spending on social programs. He has also consistently stated that taxes are unjust and referred to the social justice initiatives they fund as abnormal. He has expressed his belief that the state was created by the devil and that a free market system is the preferred system by God.
However, the economists cautioned in their letter that cutting government spending significantly could worsen poverty and inequality, potentially leading to heightened social tensions and conflict.
They stated that Javier Milei’s ideas about using the dollar and implementing strict financial measures fail to consider the intricacies of present-day economies, disregard past crisis experiences, and could worsen existing inequalities.
Ghosh, an expert in economic development from the University of Massachusetts Amherst, expressed concern along with her two co-authors, Piketty and Milanović, that Milei’s proposed policies could have negative consequences for Argentina and the entire continent.
Ghosh stated that extreme right positions could not only lead to social disorder, but also result in economic turmoil due to a decrease in government income and spending.
Citizens of Argentina will participate in an election that presents difficult decisions. However, promoting a libertarian approach that condemns the government sector will only exacerbate the hardship.
With less than two weeks remaining until one of the most pivotal elections in recent Argentine history, the outcome appears too uncertain to predict.
Before the initial round last month, Milei was seen as the leading candidate. However, he ended up coming in second with 29.9% of the votes, while Massa took the lead with 36.6%. Recently, Milei has gained support from two influential conservatives: Patricia Bullrich, who came in third place, and former president Mauricio Macri. Massa’s campaign has also been hindered by fuel shortages.
Juan Cruz Díaz, the CEO of the consulting firm Cefeidas Group in Buenos Aires, stated that as the election reached its end, the two candidates would have to approach it from different angles.
Milei aimed to center the discussion on the economic shortcomings of his rival’s Peronist movement, which has been in control for 16 out of the last 20 years.
Meanwhile, Massa had to focus on addressing Milei’s unpredictable personality and persuading voters not to vote for his opponent, who he described as “eccentric, angry, and erratic.” “He will try to portray him as emotionally unstable and a hostile, aggressive figure who causes division and polarization,” said Díaz, who was unsure if these tactics would be effective in light of Argentina’s economic struggles. “In my opinion, Milei has an advantage in this regard.”
Milei is prone to sudden outbursts of anger whenever the 20th-century English philosopher and economist John Maynard Keynes is mentioned. Therefore, it is doubtful that Milei will be pleased by the open letter. Milei views Keynes as a Marxist, due to his belief that free markets cannot sustain full employment and economic growth.
A recent episode of the podcast from El País, a Spanish newspaper, featured an interview with a previous neighbor of Milei’s. The neighbor brought up Keynes during a conversation in the elevator, to which Milei allegedly responded by shouting insults at her until they reached the 10th floor. In the past, Milei has also criticized Piketty, referring to him as a “turd” and “an intellectual impostor.”
Source: theguardian.com
