Argentina's President Javier Milei Issues Epic Takedown Of Socialism In CPAC Speech

[Applause] [Music] [Applause] [Music] hello everyone I'm the lion day to make left wing Shake I love you [Applause] too long live Freedom damn [Applause] it what seemed just like a local phenomenon has grown it's quite a large neighborhood now so first of all thank you very much for this invitation and as for today's talk in view of the impact of my speeech in tavos [Applause] and [Music] what I stated that the West Was in danger due to the advance of status and socialist ideas today I will focus on the technical underpinnings of those political views and along those lines I will focus on how neoclassical economics and its view of market failure are conducive to the advance of statism and how this destroys economic growth putting a break on the improvements in well-being and the fight against poverty as for the root of this problem the problem is methodological in nature it's about a model versus reality reality is always very complex to analyze so it's analyzed by using models but normally if a model doesn't match reality you throw away the model and the thing about the neoc classical model is that when the model doesn't match reality they get mad at the reality calling it a market [Applause] failure so the root of this problem um arises when you start studying the normative basis of competitive equilibrium so when the analysis focus on existence uh uniqueness and stability there was no Act political problem the problem started when the normative analysis started to be linked to parito analysis the basic idea of parito optimality is you that you can't improve proove someone's position without damaging someone else's so if you can actually improve someone's position without damaging another one's position that would be a Paro optimality and when those opportunities run out then that's parito optimality and that's when the definitions of market failures crop up um one of the names given to to this um position is that of non-convexities this has to do with concentrated structures structures and monopolies also externalities public goods information asymmetry the prisoners dilemma and all these elegant names are actually ways to pave the way for uh State intervention and for statists and socialists but to make it less abstract let me give a more practical example see let's suppose we are at a time when candles were still used and uh Edison hadn't yet come along of course when Edison did come along with a light bulb all candle manufacturers went bankrupt and if we had paid attention to those who favored intervention instead of having this conference in this lovely venue today full of light we would still have [Applause] candles that's how socialists mess up our lives so let's get rid of paro's optimality and uh let let's um get rid of the Socialist [Applause] approach Long Live Freedom yes so the first thing we need is to have a good definition of the market what the market actually is the U Market is actually a social cooperation process where you voluntarily exchange property rights um actually since these exchanges are voluntary there can be no market failure because nobody would be uh self-inflicting harm so if we Define the market properly all definitions that are interventionist in nature collapse it is also very important to be clear as to what institutions are the foundations of the market two major institutions are private property and markets that are free from State intervention because if you're basically going to exchange property rights it means that private property is important and if the exchanges are voluntary there's no room for the intervention encroachment and Invasion by the state [Applause] so actually when someone engages in an exchange and gives something exchange for money this creates a historical record or register which is price and that historical record we call price is an information transmission mechanism and also becomes a coordination mechanism as it makes some people be on the supply side and others on the demand side and there's also an adjustment process because demand and Supply don't always perfectly match when demand goes up um prices go up and the other way around so so the um private property and free markets determine the price system and this is the basis of economic calculation and this shows why none of the varieties of of socialism can [Applause] work in the most extreme cases because there's no private property so you can't engage in the exchanges that the market would require and in the milder varieties that do allow the existence of the private sector what happens is that state interven ion creates noise in the price system and the more State the more government there is the more violence there is the more Distortion there is and the worse the system [Applause] functions another key element is free competition but not in the um more neoclassical sense but in terms of in and out and another two very important elements are the division of labor and social cooperation the one who best explained the division of labor was Adam Smith a single person could manufacture just 20 pins if the task was divided by 15 we could end up with 177,000 pin the thing is if there's no demand for 75,000 pins there will be no division of labor and then combined with the notion of social cooperation ends up being fully destructive as far as socialist ideas are concerned I could actually hate him but I need for him to buy my product so I must treat him nicely so as Bas used to say what trade goes in soldiers don't and promoting free trade is promoting [Applause] peace and also this idea of the market as a social cooporation mechanism is a tremendous bomb for socialism because if exchanges are voluntary it means that it's win when for both sides so there's no room for the theory of exploitation or for Surplus value or for Marxism and [Applause] socialism and according to the market logic a successful entrepreneur or business person is a social benefactor because in free enterprise capitalism you can only be succeed if uh you serve others with Goods of better quality or at a better price and if the business person doesn't do things right then someone else might come along offering Goods of better quality or at a better price and that will lead to them going bust and so entrepreneurs who can come up with Goods of better quality or at a better price are actually offering progress and we must embrace them because they are creating well-being for society so after this intro the question is where is the neoclassical dilemma um we talk about the hockey stick in terms of economic growth Theory and its empirical evidence if you look at history ever since the Christian era per capita GDP between the year zero and the year 1800 remained virtually constant but since the year 1800 and until now it has multiplied nearly 15 fold um and actually in the same period if we look at the year 1800 the population at the time was um 800 million and now it's multiplied by 10 so per capita productivity went up and GDP Rose uh by nearly 1050 times so much so that we're actually in the best moment in the history of humanity [Applause] all of this despite the existence of government of the state and in this same period of growth extreme poverty went from 95% to [Applause] 5% now these increasing returns involve the existence of concentrated structures of monopolies so the question is if um monopolies are so bad how can you explain the fact that they promoted so much well-being and such a reduction in poverty the inventor of new capitalism Mur rothbart said that the problem was that the model was wrong of course let's suppose that we have 10 companies in competition to manufacturer um cell phones and one of them now discovers a technology to manufacture a new kind of phone with a better quality and at a better price of course there will be nine businesses staying out of business but would anyone here complain about having better phones at a better price so down with a neoclassical [Applause] Theory so what are the mistakes in neoclassical Theory basically because they say that the price in Monopoly um situations is higher than in competitive situations and that the uh quality is lower but that analysis is flawed there are several things to point out first because it's only a partial equilibrium analysis it only focuses on equilibrium in a single Market without looking at the rest of the economy I mean I hold a monopoly on jav and you hold a monopoly on on each and every one of yourselves and there's nothing wrong about that and God thank God we're all different in fact we celebrate our differences we because we don't like the gray uniformity of socialism but the analysis is not just wrong because it only looks at the partial equilibrium without looking at the whole Market but also because it fails to consider the future effects in this regard the future impact Henry hxy wrote a lovely book called uh economics in uh one lesson um freely translated and I remember that book and he said the difference between a good Economist and a bad EC Economist is that the bad one only looks at the market within a certain period but as a good Economist looks at all markets not just the present ones but also the future so the traditional analysis of monopolies and the way they're regulated is part of a flawed economic analysis and if we also take into account the role of profits as drivers of econ economic growth if you start uh meddling with uh profits this slows down growth so what's the true answer what's the true foundation of this analysis so it's not about economic analysis but about the mathem atrical structure used in global or general equilibrium so there's parito optimality and nonconvexity in uh production sets that's what it's about in the parito optimality um model both consumers as well as producers should be optimizing maximizing rather when we have increasing returns we have inex um production functions and the problem with those functions is that you can't actually find a maximum of course that of course that is also mathematical error because if you have increasing returns you can find the maximum provided you use all endowments in the economy so the other issue that comes up is that you would would end up with just one business but this which might seem empirically correct entails another conceptual error because it basically involves disregarding the nature of the business and it also disregards the fact that businesses are run by human [Music] beings and the more you want to work in order to produce more of course the opportunity cost of free time of leure time uh goes up phenomenally what good to uh get a job where you're offered $12 million a year if you have to work 247 you will be doing violence to your own Humanity but your classical analysis treats businesses as if they were machines rather than organizations with humans [Applause] fin yet another uh criticism leveled at monopolies is that they generate less uh produced quantities in the economy that's also false because all that money that is generated in these monopolistic structures can then be uh put into U new and further production into jobs for the benefit of the economy overall now we're going to quote a couple more cases to irritate kyans even [Applause] more and of course um what if those big substantial profits uh saved are put into investments in other business that into other businesses that will lead to growth growth in GDP in jobs in other sectors so nothing is lost well let's assume that this Monopoly holder is so greedy that he wants to invest it all in his own business so that all of his savings turn into Investments but of course this investment means more Capital higher productivity more wages and of course uh if you have more Goods this means uh more higher salaries and lower prices so it's all gains for well-being as we run out of arguments to attack Monopoly holders since if they consume then well-being is created if they save in the financial system same thing and if they save and invest in themselves they also promote well-being now let's consider what happen s if that evil businessman decides to or business person decides to bury their money so that no one can reach that money the amount of money in the economy will go down and prices will also go down for the benefit of the population and the evil business owner will end up benefiting those who have less because they will benefit the most from this [Music] deflation so what we have seen is that all analyses that favor more intervention end up creating more government more State and more damage to the [Applause] people so in wrapping up this presentation and show how socialist intervention ends up destroying the [Applause] economy and the attacks from socialists basically focus on two things on the one hand there's the regulation of monopolies which leads to Breaking the effect of increasing returns and in turn leads to the economies uh being stagnated in fact if you were to regulate according to the neoclassical idea uh quasi rent or extraordinary profits would be zero so it would be a world of perfect competition with no incentive for growth so this ends up um aborting the creative uh destruction process um according to shampa because these creative destruction processes are based on some issue that they seek to resolve in order to be able to uh generate more growth so regulating profits regulating gain leads to station and also regulating prices and quantities or Amounts is T them out to destroying property [Applause] [Music] [Applause] rights in fact let me tell you about a case involving a country I know Argentina a country that was one of the most affluent in the world in the early 20th century and which today ranks 140 worldwide with over 50% poor and over over 10% extreme poor and when you look at the number of regulations then you'll understand our government teams have so far identified 380,000 regulations which get in the way of a functioning economy and in fact our two major structural reform drives the emergency decree and the Omnibus Bill seek to uh give more freedom to the Aran people move towards more competitive market structures and above all and corruption in [Applause] [Music] [Applause] politics and of course we uh we Face much resistance on the part of those who benefit from this decadent framework and of course this involves the corrupt political cast which includes uh the this political uh corrupt uh cast includes thieving politicians who put their own privileges above the well-being of the Argentine people and of course there's business owners who get into wheeling and dealing and monkey business with corrupt politicians and there are also corrupt media who really mad at us because we have done away with government paid advertising and of course there's a trade unionist who look after their own business interests rather than taking care of the people and of course there are professionals who make a living out of Defending these corrupt groups and who basically profess the religion of government of the state so you can get an idea of this major battle we're fighting but will not surrender to we make Argentina are great [Applause] [Music] [Applause] again the other major threat or attack from socialists and statism has to do with um efficiency uh as opposed to distribution and so they uh say that capitalism is high individualist as opposed to the altruism of socialism always with the money of others and this aberration is pursued in the name of social justice the um Hayek used to talk about weasel words whenever they chose an adjective it was actually the exact opposite so as says social justice is violence and adjust it's not just or anything of the sort far from it it's an [Applause] aberration it's unjust because it involves unequal treatment before la so in addition to being violent social justice unjust because that redistribution is basically robbing Peter to pay [Applause] Paul and this is made even worse when you take the idea of unlimited democracy democracy was originally designed to respect the smallest of minorities the individual but when socialist ideas came along and the idea of unlimited democracy then socialism came along but to make it less abstract let me give you an example let's suppose uh for wolves and a hen come together let's now vote what's on the menu tonight they've just eaten the hen so deep down that's also what happens in the economy the hand that lays the golden eggs is a segment that generates wealth but due to the way um income is distributed 80% of the population have income below the average and that's when the populist politician comes along and says that you need to take away from the rich to give to the poor not just Venezuela Argentina and all of Latin American populism and when that happens profits are destroyed as well as economic growth in Practical terms Argentina is a country that produces food for over 400 million people and the tax pressure the tax burden on the food producing sector is 70% so the state government keeps the food of 280 million people and still five million argentines don't have enough to eat uh because of the Damned government the state uh socialists also continue to discuss income distributions saying that the system is unjust there's a lovely book by Israel kersner that's called creativity capitalism and distributive justice uh so the Assumption um is that kirna says that capitalism is actually more productive but if it were unjust there would really be no argument to defend it and he works on two ideas along those lines Lo's appropriation principle so if you discover something then you keep it you appropriate and then there's Hayek's idea of the Market as a discovery procedure in fact this idea of the U Market as a discovery procedure involves that there's actually no pie to be shared it's not a given the pie develops as you continue to create for so if a Pie Gets discovered As you move forward along the productive process it's only natural that the pie should be appropriated by those who uh discovered it so that makes a system not only more productive but also means that it's the only just [Applause] system and of course after all of this we've uh got socialists cornered this is why one more to share with you Uncle naturally when you regulate and you act against monopolies and you regulate business and uh production and bring up this idea of social justice well all of that ends up leading to stagnation and stagnation in the context of in the context of population growth leads to a gradual stagnation in the country how do you remedy this and well how do they correct this with the murderous abortion agenda and mous agenda that we can trace back to the uh times of ancient Egypt when the ancient Egyptians uh attempted to exterminate the Jewish people um Mals and his um Iron his principal on birth control which was basically about just that birth control population control or even uh closer in time to the 60s the club of Rome which suggested that as the world used um energy based on fossil fuels and since those energy sources are not renewable they predicted that those resources would have run out by the year 2000 and yet they claimed that that would lead to food running out and to many of us dying and only um a billion people are being left on this planet and now that we have the niom and kissing files that have been Declassified we know that they were advocating the abortion agenda so uh children Parenthood has more um venues than mcdonals around the world fortunately they were wrong again because today there are eight billion people living in the world but they stick to their murderous agenda um postm Marxism defeated on the economic front transferred its class struggle to other aspects of life such as ecologism um arguing a fight um against nature that is waged by um human beings they blame human beings for uh global warming when this has actually happened already four times in the history of the earth even when there were no humans [Applause] around and of course the only idea that Neo marxists can come up with in order to correct this problem is to exterminate humans W so if we did have a problem with scarcity of resources we should be planning to colonize other worlds rather than think about exter Exterminating [Applause] ourselves in fact all those analyses that um go against population growth are false let me quote a very optimistic Economist called Julian Simon who said that population growth entailed more technological progress so he would say that there was demand driven technological progress um he suggested that uh if there were more people and scarcity scarcity issues that had an impact on the price system which of course ended up driving reforms and technological uh progress in order to solve the problems and he also highlighted Supply driven technological progress of course there are much many more chances of having a Mozart in your population if you are 1 million rather than just 10 so the message is this don't let socialism [Applause] Advance don't endorse [Applause] regulation don't endorse the idea of market [Applause] failure don't allow the advance of the murderous [Applause] agenda and don't let the sire calls of social justice will you I come from a country that bought all of those stupid ideas and from being one of the most efferent countries in the world now we rank 140 don't surrender your Liberty fight for your freedom [Music] if you don't fight for your freedom they will drag you into misery but I would also like to leave a message of optimism with you Argentina seemed to be a country Dem to be like sheep uh driven by socialists and when I started my political career in Congress as a congressman I said that I wasn't there to hurt sheep but rather to awaken [Applause] lions [Applause] and we continue to awaken more and more Alliance every day and the message of Freedom didn't just make me present of Argentina we are Awakening the world don't surrender in your fight Long Live Freedom damage Long Live Freedom damage Long Live Freedom damage much thank you very much [Music] get

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Length: 62min 29sec (3749 seconds)

Published: Sat Feb 24 2024