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liberalismo, kirchnerismo, peronismo, Casa rosada

Is it true that Argentina has no way ahead?

Competition among provinces in Argentina is what stimulates incentives for people not to move from one province to another and to attract investments.

[Leer en Español]

In Argentina, for some time now, the government has said that the problem lies in the lack of a clear direction. In addition, salivary glands and rivers of ink are consumed debating who is in charge in our country. I believe that both observations are a pitiful waste of time, even though they are formulated with the best of intentions and purposes. The first one because what the question insinuates is not truthful: it is clear that the march is on towards Chavismo, and the second one because it is definitely irrelevant, the crucial thing is the outcome of the administration and we should not stop to delve in the twists and turns at the palace, no matter how loud they may be.

Instead of babbling generalities, it is urgent to propose concrete measures to redirect Argentina steps towards values and principles of Alberdi that we should have never abandoned in the first place. Let us remember that since our Liberal Constitution of 1853, and before the Fascist coup of 1930, and certainly before the military coup of the 1943, we were, together with the United States, the most flourishing country on the planet. Income and wages, in real terms, of rural workers and workers in our emerging industry were higher than those of Switzerland, Germany, France, Italy, and Spain, causing the immigrant population to double every ten years.

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“It is not that a German is more generous than an Ugandan, it is that he is obliged to pay higher wages because his investment is higher, which in turn, is the result of a civilized institutional framework that protects, and does not violate people’s rights”. (Flickr)

Then we were invaded by Statism, which destroyed the moral and material wellbeing of all, but especially that of the neediest due to a galloping increase in misery. At this point, it is essential to propose for Argentina the elimination of useless functions in governmental departments, and I do not mean to cut costs, since, as with gardening, trimming translates into a more vigorous growth.

At other times I have stopped to develop in detail suggestions on how to proceed accordingly, but this time I am only insisting on the need to resort to a more precise language.

Even when talk is directed to the independence and rigor of Justice, it would seem that its meaning is overlooked, which according to the classic definition consists in “giving to each its own” and that which is “its own” refers to the right to property, which is bitterly subjugated in our days starting from the insanity of price controls to that contradiction in the terms called “state enterprise” since the central tenet of business activity is taking risks with one’s own resources, and not with the fruit of the work of others by force.

On the other hand, prices are the only signals appropriate to operate in the market. If they are distorted by the irruption of bureaucrats, there is inexorably a waste of capital, which implies a reduction in people’s salaries, since the rates of capitalization are the only factor that determines them. That is the difference between Ugandan and German wages. It is not that a German is more generous than an Ugandan, it is that he is obliged to pay higher wages because his investment is higher, which in turn, is the result of a civilized institutional framework that protects and do not violate people’s rights.

Even federalism has seriously deteriorated. It is the provinces that constitute the nation, and not the central government. Consequently, they should co-participate with the federal government by keeping all taxes in provincial jurisdictions except those relating to foreign affairs, defense and to finance federal justice. Competition among provinces in Argentina is what stimulates incentives for people not to move from one province to another and to attract investments.

In short, it is to be expected that the opposition will be broadcasting much denser speeches in order to move the axis of the debate in this indispensable cultural battle.

Alberto Benegas Lynch (Jr.) is President of the Economic Sciences Section of the National Academy of Sciences of Buenos Aires.

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