Although at first the Central Court of La Rural was planned, today the presentation with show included will be at Luna Park. In front of almost 10,000 people he will talk about his new book, Capitalism, socialism and the neoclassical trap.
What is the book about? Of Economy, of course, and of Politics. “The first part,” he said. Milei to Infobae Cultura days ago -, they are political speeches, that’s how I sweeten the readers’ eyes… In part 2 there are several articles, one from the perspective of economic thought, another from growth…”
There are 375 pages. The work opens with “Preliminary words” , which are followed by a chapter titled: “A better future is possible.” Then “Freedom: key to prosperity”, Milei’s speech before the CPAC and the one he gave to open the ordinary sessions of Congress in 2024. Then yes, economic thought, growth theory, the topics that Milei usually touches on.
Through written messages, audios and a brief telephone conversation, the President spoke about his book.
-When did you have time to write?
-It is a topic that I became aware of ten years ago and over time I matured until a few years ago I found my way around it… And since the original article I began to discover a lot of problems with political implications. That’s why there are academic and application articles. Many of them are part of my speeches, for example there is the theoretical basis of what I said in Davos [N.deR.: cuando marcó que el Estado “no es la solución sino el problema mismo”]complemented with that of CPAC [La Conferencia de la Acción Política Conservadora, donde argumentó que “la economía neoclásico y su visión de los fallos de mercado son funcionales a la base del socialismo”].
-And were you able to finish it as President?
-I finished it on long plane trips…
Precisely, the preliminary words that open the book are dated in Olivos – the place of residence of the Argentine presidents – in April 2024. Times in which Milei He is active as a ruler.
There he talks about when he came across a work by the economist Murray Newton Rothbard, whom he often quotes. He says that Monopoly and competitionof Rothtbard“is part of one of the books that, together with human actionby Mises, have had the greatest impact on my life: “Man, the economy and the State”.
That reading, he explained, made him think that ““Everything I had studied and taught for more than twenty years about market structures was wrong.”. And that’s why she ended it, she said, “embracing the ideas of the Austrian School of Economics, which revolutionized my thinking”.
The neoclassical school The one you are going to criticize, be careful, it is not close to what we usually understand by socialism but rather it talks about the efficiency of markets and the importance of supply and demand.
“I was tormented by the contradiction between the empirical evidence of economic growth and the brutal fall in poverty in the world during the last 250 years and what economic theory indicated as something bad for the well-being of the population: the existence of increasing returns that “They imply concentrated market structures (at the limit, monopolies) and are considered inefficient and harmful to the population, while in reality they bring enormous gains in the quality of life of humans.”writes Milei.
However, some may be struck by the title of the book –Capitalism, socialism and the neoclassical trap- remember Capitalism, socialism and democracy, a work by the Austrian-American economist and political scientist Joseph A. Schumpeterwhere Schumpeter analyzes the evolution and functioning of capitalism, as well as its relationship with the democratic system and its potential transition towards socialism. The main thesis of the book is that capitalism fosters economic development through the process of “creative destruction,” where innovations and technological advances constantly displace previous economic and business structures. And that capitalism has a tendency to self-destruct due to its successes, leading society towards more socialist forms of organization.
-It seems like a kind of response to Schumpeter… Did you think so?
-I didn’t think about it that way. The inspiration for the title has to do with two Austrian authors and a technical problem that I describe in the book. [Ludwig Von] mises It says: there are two systems, socialism and free enterprise capitalism. The other logic is that of Friedrich Hayek in easement road and it would be that anything you put in the middle goes towards socialism. Davos is a political application of this. Note that the subtitle of the book is “from economic theory to political action.”
-Then let’s go back to your title…
-The idea of the title: that there are two systems and any system in the middle goes towards socialism. And that the creation of neoclassical economics goes towards socialism.
-What would that be like?
-When you study balance the first thing you have to see is if balance exists. The other is if that equilibrium is unique, you have to see if there is an equilibrium price or if there is a lot. You also study if it is stable, if the forces bring you back to a given equilibrium. So here you have two balances, the socialist and the capitalist and I say that anything you put in the middle goes towards socialism because when you intervene, the result is worse than what you had before, so that generates more demand for intervention and that is why you have have to intervene more and it is even worse. And so. That is the dynamic of Hayek’s book.
-But the neoclassicals are not socialists…
-The neoclassicals, when reality does not map with the model, get angry with reality and call it “market failure”, they call on you to intervene. The neoclassical trap is to show that this generates intervention and ends up leading to socialism.
-However, any socialist would tell you that it is not that easy to get there…
-For me, everything that is intervention is a socialist touch. In Davos I give a list of things that I call “socialism”, that’s why [el economista español Jesús] Huerta de Soto and Alberto Benegas Lynch ask to talk about “statism.” I use the two words in a similar way because I am an anarcho-capitalist, so everything that has a state is socialism… I have that declared vision and I feel no shame!
-Finally, you talk about the relationship between theory and political action… How do you as president handle the friction between those two terms? He was thinking about intervention on prepaid prices.
-I understand that the world imposes restrictions and I make decisions based on that.
“Although this solution that I present is not optimal -Milei writes in his book-, At least it offers a useful basis that can be worked with and that I find more satisfactory than that presented in conventional textbooks.”.
