Episode Transcript
[00:00:00] Speaker A: Hi, everyone. Welcome to the 209th episode of the Atlas Society. Ask my name is Lawrence D'Alevo, senior project manager for the Atlas Society, the leading nonprofit organization introducing young people to the ideas of Ayn Rand in creative ways, like animated videos and graphic novels. Our CEO, Jennifer Grossman, is out this week, but I am excited to have joined me, Atlas Society senior scholar and professor of philosophy at Rockford University, Stephen Hicks. And I want to remind all of you watching this on Zoom, Instagram x, Facebook, LinkedIn, or YouTube. You can use the comment section to type in your questions. For today, we'll try to get to as many as we can closer to the end of the webinar. To start things off, just a quick introduction saying that on November 19, 2023, Javier Millet won Argentina's presidential runoff vote, promising a dramatic shakeup in moving government policy towards a libertarian ideal to combat inflation and rising poverty. It's been six months since then, so Steven is here to join us to talk about this and see just a general analysis of what's going on there. So, Steven, thank you for joining us today.
[00:01:20] Speaker B: All right, thanks for, for hosting Lawrence. Yes, as Lawrence mentioned, right at the end of 2023, the world was surprised, and Argentina was surprised that an outsider, Javier Millay, had won the presidency. He had seemingly come out of nowhere and shot up in the poll, shot up in public attention, and in a hotly contested presidential race. One shortly after that, here at Atlas society, I teamed up with economist doctor Richard Salzman, and we did an analysis of what we knew then about the situation in Argentina, what we knew about Javier Malay in particular, and what we thought were both very promising, but then at the same time, some things that were possibly to be concerned about. So now that Malay has been in power for six months, I wanted to revisit Argentina not in person this time, but intellectually and as an outside observer to give my assessment of how the first six months had gone. Now, at that point, what we knew about Javier Millay was that he had significant number of libertarian views, particularly on economic issues, although those were mixed in with some conservative views. And a big part of the surprise at the end of 2023 was that a candidate like him could have been not only prominent, but one in Latin America of all places in the world. Why Argentina? And large part, it had to do with the fact that things had gotten so bad under the preceding regime that had been in power for decades, that many people were willing to try something, or almost anything, anything different. Javier Malay had also gotten a significant amount of international attention particularly from the economically minded, because while Argentina really should be a rich, rich country, a century ago, before the Peronists had acquired power, Argentina was among the top richest countries in the world. But it had underperformed and declined significantly over the course of the 20th century with terrible inflation, terrible budget, and just often defaulting on a fairly frequent basis. So maybe this guy who has some knowledge of actual economics and free market economics can turn some of those things around. Other surprising things about victory at that time was the number of Argentinians who had become engaged with the political process. Partly it had to do with his personal style, kind of often wild, but certainly offbeat. And he had a kind of charisma.
And so even younger people who are notoriously apathetic with respect to political issues had become engaged. And what Molay among the voters was able to put together was a number of people. There have been institutions, free market, more classically liberal organizations in Argentina working for some sort of change over the course of many years. So there was a significant minority contingent of people there, but also a large number of people for whom things had just gotten so bad in Argentina that they were willing to give almost anything a try, particularly someone who seemed to have a clear voice and a clear vision for where things were going. Now, six months ago, the four questions that were on our mind, my mind and professor Saltzman's mind was, we know one of the problems is that politicians candidates can often talk a good game. So was Malay really committed to doing what was necessary in Argentina or was he running? This is putting it too flip. But for fun, they didn't really have the seriousness of purpose and the willingness, willingness to do what is necessary to get the job done. So how really committed was he?
He was a relative newcomer to practical politics and an outsider. Would he be able to overcome the political opposition not only inside the coalition, he among, so to speak, strong free market libertarian types. That was only part of the coalition that Malaya had to put together. He had to work with members of other parties and other persuasions, some of them much more conservative.
Would that coalition internally survive or would he fall victim to often what happens internally? The knives come out or any sense of weakness and the person gets deposed. But then, more formidably, outside of the. Outside of the coalition, the entrenched bureaucracy, the still significant number of people in the legislature and in the judiciary who are just ideologically and in part because their careers depend on a paycheck from the government, absolutely opposed to everything that Millay stood for. And these are formidable entrenched opposition? Would Millay be able to prevail against them? Would he be competent enough, given his lack of administrative experience?
Would he be able to learn fast enough how to organize the government and how to do the politicking necessary to get things done? And then a fourth question, and this one was even perhaps more of a concern, had to do with his character and his style. Because in the many years leading up to his winning the presidency, he was in many respects a pit bull and a fighter on Internet forums and in personal conversations when he was on tv. An often savage style of speaking and a savage style of acting with respect to people. Just outright name calling, often to the point of character assassination and so on. So does he have the character? It's going to be necessary to handle the stresses of the office, and the office of any CEO or president carries with it enormous pressure. Anybody who has character weaknesses, those always come out. And then, of course, we want presidents to have a certain presidential style, to represent the country in a certain way, to represent the government in a certain way. Does Javier Millay have that? And there were, I think, some legitimate questions there. So those. That's where things should sticks months ago. And at that point, I started a list, because I'm a, I'm an academic, and so I wanted to put just on the record the list that I started. I commend this for anybody who's interested in doing serious evaluations. Often people are just creatures of their political party, and so they don't give candidates a fair chance. You know, whatever my candidate says is great. Whatever the candidates from the other party say is bad. Or many cases, people are one issue people. They have their one pet issue. And if the candidate agrees or disagrees with them on that issue, then they are either totally opposed or totally not opposed. But my view is that to evaluate someone like a president overall, given the wide range of things on that person's agenda, something more analytically useful is necessary. So I think one thing to do is to start off by making a point that I'm going to pay attention to and do the research on. What are this person's ideas? What is the person's actual political philosophy, including his or her view? Views on morality, on religion, on politics, on economy, on the wide range of issues. What does this person believe? As best that I can can tell? And in the case of Javier Malin, it seemed like he was substantially libertarian on those, but he also had a significant minority number of conservative positions. Then, just to make a point of keeping track of the actions that the person engages in this involves following the news and making notes on he did this, he did this, he did this, he did not do this. So you have the list as complete as you can make it. And then when one notices the actions that someone like a president does, it's of course that he, as the president, bears the ultimate responsibility for those. But at the same time, one needs to be aware that some of the actions that he engages is he bears the responsibility for those alone. Sometimes they are the actions of ministers in his party. And in many cases ministers are part of a coalition. And the president, while having sort of veto power in most cases, often does not have total say. And so how much responsibility does the minister or the president bear for the particular issue? How much of it is coming, so to speak, from the coalition and how much of it is coming from the, from the president?
And then also often at one time one inherits, right, a given situation and there are going to be actions, both of which are possible to you and both of which involve benefits and costs at the same time and as much as possible when evaluating those actions, to be aware of those cost benefit calculations that the person often will say, yes, I'm aware that I'm causing pain in this respect, but my judgment is that this benefit outweighs those pain. So trying to read that person's mind as much as one as possible in evaluating initially the, or putting the things on the, on the list, I like to on my computer make a good and bad table. It's simple. The things that I think are good, things that I think are bad and actually starting to place things his ideas on the good and the bad side, the actions on the good side on the bad side. When one has a list of good and bad things to get more nuance to then say well, which of these things say that I disagree with are or I think are worrisome are more important and which of them are less important. So when I am making a judgment call about the things that are good and the things that are bad, making sure that I'm going to be focusing first on the most important things. So in this case of Argentina, we know that Javier Malay has a lot of views on the economy. He also has some views on immigration, on abortion, on religion and so forth.
But I wouldn't weight all of those equally in importance, both for good or bad. Some of them are more important, some of them are less important. So be attentive to and put one's own weightings on those things then one so one have done all of those things, then you have a big overall judgment call of waiting what you have on the overall good list and on the overall bad list to come up with an overall assessment. So what I'm going to do then is start to talk through some of those things. Now my judgment call is that there are lots of issues facing Argentina and facing any president at any time. But for Malays presidency the most, the three most important issues are of the economy, the economy and the economy. So those ones in my thinking get the hugest amount of weighting. There are lots of things that I know I would disagree with Javier Malay on various foreign policy and social issues and so on, but they are much further down the list. So then we say I'm going to pay special attention to what Malay is doing with respect to economic issues. Now I'm not a professional economist, I know enough to talk some of the talk and be a little bit dangerous but inflation is a terrible issue. When I started to go to Argentina first time was in 2010, the peso was trading at the official rate at 16 pesos to the dollar. By the time we got to 2023 it was well over 1000 pesos to the dollar on the black market. That's over ten years. That's terrible, terrible inflation just destroying many people's savings and those unfixed incomes and other kinds of dislocations as well. The amount of spending that goes on in the government. We in North America, I'm from Canada and America and Europe, we complain about the amount of fat and the amount of even if we agree that something's a legitimate government function or not, a lot of it is just wasteful and ridiculous. But we have nothing on the Argentinians. Take whatever your worst complaints are about the american or the canadian government, bloat and multiply it by a factor of four, five or six and then you are in the range of the problem in Argentina. So the amount of number of people on the payroll, so to speak, who should not be on the payroll, setting aside or nesting that within another judgment call about which things the government should be doing or should not be doing in the first place, recognizing that the amount of tax revenue in Argentina has been woefully inadequate to pay for all of the government spending. So it's running definitely deficits and so tackling the deficit again, a size of the economy. Worst problem for Argentina than the richer countries in Europe and North America. The amount of taxes paid by Argentinians.
One of my economist professors, friends in Argentina had done a serious calculation of this and said that if you were in business and you paid legally every tax that you were supposed to pay, you would pay 120 something percent of your income. That is to say, you only survive in business by cheating on your taxes, by hiding income. And of course, you can't get away with everything you pay. Nonetheless, a huge amount of taxes, and that is, for all kinds of obvious reasons, a problem. A number of things that you are not allowed to do, the amount of regulations that are just obstacles or outright prohibition. Deregulation is another important thing to pay attention to. To the extent that we think some things can be better done in the private sector than in the government sector, the issue of privatizing for economic gain is another one. One of the major government expenses is the number of bureaucrats on the payroll. And is the president committed to payroll deduction, including people in the legislature and the president themselves. And presidents and people in the legislature are notorious politicians around the world for giving themselves lots of perks that the public is not aware of them giving themselves lots of pay raises. And so that one is an important bellwether. So that's not an exhaustive list, but those are the things that one would make a list of explicitly and start to make notes on in order to do a serious assessment. So just mention a few things that I have that struck me and I've got. These are just a few. But it has struck me that over the course of the six months that Javier Malay has been in power, he has succeeded in steadily reducing inflation rate. He inherited a 300% inflation rate at the end of December, shading into January of this year, that went down steadily. The latest number we saw was for May of 2024. That was 4%. So from 300% inflation rate to 4% inflation rate in six months, that's a significant factor. For five months running January through May, there has been now a budget surplus in the argentinian government.
He has fired tens of thousands of bureaucrats with more in the offing, and that is 70,000 was, was the latest estimate that I saw. But that is then 70,000 people who probably were not adding value to the economy or adding value to the country. They are now off the payroll. They will get jobs in the private sector, where most likely, if they can get a job in the private sector, they're actually going to be doing something value adding to the economy. So that's a win for the economy as a whole, but it's certainly a win for the government. Budget a small thing, but Malay has frequently made a point of flying coach when he travels around the country, and this is partly a matter of political theater to show that he is a man of the people. But it's a serious amount of political theater because he is, in effect, showing that I'm not going to hide myself away from the people and I'm not going to fly around in a government jet and enjoy all kinds of perks and so forth, even though I could, with the power that I have, I'm going to take seriously staying in contact with the people and cutting expenses where it is possible. With respect to the issue of the internal coalition and internal divisiveness among people who are in the government. He has fired a couple of ministers, one of them for leaking information inappropriately. One way of sabotaging the operations of government is not keeping things that should be secret, secret so that the political enemies know what's going on and they can do various kinds of damages for being obstructionist. Things that Millay and the cabinet had decided that we're going to do, going in slow motion or putting up various other obstacles to make sure that that thing did not happen. When Mick Mullay became aware of that, firing that cabinet minister again, saying, signaling that I am going to deal with the problems are significant. Another was that the government had decided early in the presidency that they were going to freeze the pay for all government officials, and particularly senior government officials. There had been a kind of an automatic pay raise for senior government officials voted in place by previous administrations, and that was allowed by one of the cabinet ministers to go through.
And when that did go through, Millay made a point again of firing that cabinet minister. You knew better. You should have stopped that.
And so making it clear that he is not just talking the talk, so to speak.
A more significant thing was a number of things that had been done over the course of January through May. But there was a kind of an omnibus bill of 238 provisions that got through the Senate very close vote in May with.
So a huge number of economic reforms are now more than likely going to go forward. So it's not just a reform here and there. It's a huge number. We're talking of hundreds of things that have been thought out and are going to be put through. Some of them that grabbed my attention. I'll just give some anecdotes. There's some small examples here. One is making serious the point about taxes and fiscal transparency to the consumer. So right now, what had happened actually up until now in Argentina was that if you bought something, you did not know how much the purchase price was going to the business and how much of the purchase price was taxes. And there had been a law passed by previous governments in Argentina that made it illegal for businesses to let consumers know how much of the purchase price was taxes and how much of it was actually going to the business. And that was a way, since taxes were so high, of hiding just how much of taxation is going to the government and anytime there's a tax or a price increase or things seem expensive and consumers are complaining that of course they're going to direct their ire toward the business and not in many cases toward the government where the significant prices are. So that old law was overturned and it is now legal for businesses to say here the price of the good and to make clear and explicit and transparent how much of the purchase price is taxation. I think this is significant for economic education of the consumers, but also for political education for consumers. So they know exactly what, what is going on there. Another one with respect to taxes that I think was important, the property transfer tax. Anytime there was a real estate transaction from one person to another there was an additional 1.5% tax that was paid. And so this was a significant source of revenue for the government. That was a tax that was eliminated. Therefore it's going to have huge impact for people who want to buy homes, cost of rental properties, and there has been a housing shortage and as in many places in the world very difficult for people to purchase homes. So this is at least immediately at a 1.5% solution toward that particular problem. Now there's lots more that can be said in there, but what I want to do is move on from this issue of what has Malay done with respect to economic issues, to talk about what I think is perhaps a more important long term impact that Malay is having and that is not as a politician doing various sorts of reforms, but Javier Millay as an educator of economics. Many politicians of course don't know very much about economics. They don't talk about it. When they do talk about the economic situation, they talk briefly about it, they lie about it, they divert and so forth. One of the things that is very important about Millay is that he is and has been an economics professor for many years. He knows his material very well and he likes talking about it and explaining it. So Argentina is a country in which there is huge amounts of economic ignorance. That's true of course of many countries around the world. But if Argentina is going to be successful as any sort of a democratic republican mass participation in the political process, it needs to have a citizenry that knows basic economics. And so with Javier Mullay, manages to stay in power for two years, three years, four years, we don't know will he get reeducated or not. The fact that he takes time in his speeches, when he's talking as the president, to talk about economic matters, to explain what he is doing, the problems that he has inherited, the rationale for the explanation, he is giving people knowledge that will then inform them as they think about their own economic circumstances, their business circumstances, and as they vote for the rest of their lives in Argentina, circum argentinian elections. And that, I think, is going to be a huge, long lasting impact of Javier Millay. Javier Millay not necessarily as president, but Javier Ley as president of, sorry, as a professor of economics, who happens to be president, that's going to be huge, hugely important, a huge value for the argentinian economy. Now, I am a professor of philosophy, and I want to just throw this hypothesis, but I think perhaps the more and most important thing that Javier Millay is doing, whether we think he is successful in this 100% or not, and that is that Javier Molay is also a moral professor or a professor of morality. And one of the hugely refreshing things about Malay has been his honesty. Now, obviously honest, he comes out in Malay in crude, negative form, fairly frequently. But the fact that he is willing to use moral language front and center to say what is good, what is bad, and to say that it matters, that these things are good and bad, is crucially important for the psychological and moral political health of Argentina. One of the big problems argentinian culture has, especially its political culture, is a kind of amoralism. The expectation that, yeah, we know everybody is corrupt in politics, yeah, we know all of the connected businessmen are corrupt in politics, but, eh, what are we going to do about it? That's life, that's politics, we accept it, that's business as normal. And you know, if I had the chance in business or if I got elected to politics, I would probably do the same sort of thing and pat myself on the back for being able to scam the economy out and then the government out of a certain amount of money. That kind of amoral shading into immoral culture is death to a politics, it's death to a country. Argentina has been suffering from it for generations. So to have a president who comes along and says, look, corruption is immoral and we are not going to tolerate it, to put that issue out there front and center, we are not going to engage in double standards, one set of standards that we expect the populace to engage in a different set of standards for politicians. The faking of economic numbers, the outright lying about where the funds are coming from, where the funds are going, what the impact of various policies is going to be. We are not going to tolerate any of that.
The idea that I am a politician, I made as a candidate certain promises. Well, it's often that all of us will say around the world, oh yeah, politicians will just blow smoke until they get elected, but they will not follow through. The fact that Molay has said, this is what I believe, this is what I'm going to do if I am elected. And he is doing those things again, perhaps not perfectly, but his record is much stronger and his commitment. So that honesty plus the integrity in action, absolutely crucial to the morality, health of the, of the, of the culture.
I have been impressed with the fact that he has been using moral language, undermining the socialists. And there's a huge number of them in Argentina, the huge number of Peronists. And I don't know how much we know about argentinian Paula, but the peronist party was like 99% a fascist policy party formed in the 1920s, directly inspired by Mussolini's fascism in Italy, and putting in practice fascist policies. Over the decades, of course, it became corrupted and institutionalized and watered down in some respects. But the fact that Malay is saying, look, that is fascism, that is bad, that is socialism, that is bad, that is cronyism, that is evil. And using this language strongly in identifying who the bad guys are is refreshing and important at the same time. On the emphasizing the positive, he uses the language of saying that businessmen are heroes for creating value, wanting to trade with other people, wanting to enrich the economy, and of course become wealthy themselves. That is a virtue, a heroic virtue, particularly in a corrupted economy such as Argentina. So identifying business, if it's done well and morally, as a great moral beacon to be held up high and striven for that. Entrepreneurs also are noble people, coming up with their own vision, having being the self starters, starting all of the businesses that are going to grow and be successful. That is a heroic, noble practice to engage in. So identifying in moral terms the positive as well, and also the theme with respect to Argentina, which has been depressed political culture for decades, to say that Argentina should be successful. We've got natural resources, we've got huge amount of political capital. We have what it takes once again to be among the richest countries in the world, giving argentinians a positive goal to strive for. It's not just going to be, be corrupt politics and business as usual and we're just going to limp along. We can be awesome and giving a particularly young people a positive message about where Argentina possibly can can go. And I think all of that is hugely important. So that's then three points. His actual actions with respect to economics, his being a professor of economics and an educator, but then also a this is not quite the right title, but a professor of moral philosophy, philosophy or moral culture and making many strong points. All of those things I think are important to evaluating Malays presidency. So to come back to the initial concerns and questions that we had about Malay six months ago, is he committed and not just a guy who wants power and is a dilettante? No, I think the answer to that clearly is he is committed. He's putting in the hours, he's putting in the effort. He is doing everything that he can to make his presidency mean something with respect to his character and his style. The wild and crazy Malay that we were all aware of before. I think he has muted and moderated that significantly, at least in what I have seen over the six months. So I think he is becoming more and more presidential and is growing into that role. So I think he's taking seriously what it is to have presidential character and style. Still some question marks there. He's a very passionate man and he does have the, the years of certain character style. So it's only six months but I'm more encouraged now on that point than I was six months ago. Is he able to overcome the political opposition both internal and external?
I don't, he has not achieved everything that he has wanted, but I think in terms of what he has accomplished and been able to get done in six months has been very impressive despite internal opposition and despite more formidable external opposition. So I don't know exactly how much one could have gotten done in six months, but it does strike me that he has gotten significant amounts of and that's the thing that perhaps is the most surprising to me. I did not expect him to be able to accomplish as much in six months as he has accomplished in the, in that six months now still we're in the honeymoon phase. This is still relatively early in the presidency. There's a lot of slogging ahead. So where we will be in six months, one year, two years from now, I don't know. But he has proven to be, I think, effective as a politician given his lack of track record, surprisingly so. So I want to make two more points and these are kind of new things that are possible concerns for us to pay attention to as we keep an eye on Malay and Argentina for the coming months and years. One is that in this omnibus bill of 238 items and also along the way there has been an increase in the number of emergency powers granted to the office of the pressure.
And this is already in the case of the presidency of Argentina. Argentina rather already having lots and lots of power. It's already a very strong executive function. So the argument here has been Argentina is in a terrible state in various respects and so the president needs to have powers that are going to jumpstart the normal legislative and perhaps judicial process to be able to unilaterally make certain things happen. And I want to say that the, obviously the under argument for that is sometimes there are emergencies and so having your executives have emergency power makes of course sense, but this is always a worry anytime there's an increase in the amount of power, particularly emergency power among the, among the executives and especially in a latin american country. So I would flag this as something to pay close attention to over the course of the next year or so. One ameliorating thing with respect to the emergency powers is that they do have a sunset clause attached to them. So that's built into the legislature. So it's not just that the president gets the emergency powers until the legislature takes them away or the judiciary takes them away. There is that he has these emergency powers for a certain amount of time and then they will be automatically retired. And that's a good thing.
So, but nonetheless, we do also know that sunsets can be ignored and so there's still a big concern there. So that's one that I would like to like to flag. The other thing I would like to flag before I close is there has been a significant amount of normal political opposition is the people among the electorate who disagree with Malay and they make their voices heard normal among people in the legislature and in the bureaucracy who disagree with Malay, and they have used the political power that they have. All of that is normal, part of Democratic and Republican Republican Party. But there is a significant amount of gang activity in Argentina, more so than in other countries, and a significant amount of organized crime in Argentina, again, perhaps more. And they are also threatened in various ways by the malay presidency. In some cases, their corruption involved, getting sweetheart deals with respect to the government and so on. So they have in many cases resorted to increases of violence in various sorts in order to exert their political opposition. And this is an ordinary problem in one respect, and governments do need legitimately to have police power and military power to deal with some of these gangs and some of the organized crimes criminals, rather, particularly when they are crossing international borders. So one thing that I am a little concerned about, though, is that Malay is increasing naturally the police response and the military response. But he also has signaled an interest in what Bukele is doing in El Salvador, because El Salvador, their central american country, has had terrible gang issues and criminal organization issues, and it has quite famously over the course of the past year engaged in crackdowns with respect to that. And, and in one respect, it has been enormously successful in arresting and detaining and putting on trial. In some cases, people have died. And so the organized gang and organized crime problem is much less now in El Salvador than it certainly was a year ago. But there's a problem here in that the El Salvador case is involving a lot of setting aside of ordinary rule of law and the rights of citizens to due process, habeas corpus and so forth. So there has been a serious overstepping of the mark in El Salvador in order to achieve these ends. So to the extent that Malay has signaled, I think he sent one of his ministers to El Salvador to study what has happened in El Salvador to see what can be adapted to the argentinian case. To the extent that dealing with the problems in Argentina would involve some of the methods that have been used in El Salvador, I think that's a serious problem and a serious worry for us to pay attention to. All right, so just a one sentence conclusion. I would say Malay, overall, I have some, some questions, has had an excellent six months for six months, so, and I hope to be back in one year to do a follow up, see how things are going then. So let's turn things open to discussion and Q and A.
[00:39:18] Speaker A: All right, thank you for that, Stephen. Definitely a lot that was covered there. And I've been keeping an eye on all of the questions that have been in the comment section, so we'll try to work through them here in the next sort of 20 minutes or so that we have left. So jumping in with the first question here, here comes from Rick Robin, and you've partially answered this already, but this goes in more detail. He asked how has malays experiment worked out for the argentine people and will it be a model for other countries? And then his follow up to that is how has Malay been dealing with foreign relations?
[00:39:53] Speaker B: So that's actually two questions, one about Argentina in particular and then the foreign relations issue.
I think there is a lot of optimism among the people and a lot of pain among the people.
The last time I was down there in Argentina, I was down there in December, January and again in March, April and there were a significant number of disruptions, some internal to the government, various sorts of government services that had been provided. For example, Malay said we're not going to subsidize, say, this bus service anymore. And what that then meant was that many of the bus companies that were getting bus subsidies then basically held their finger up to Malay and says, okay, so therefore we're just going to cut services and we're going to blame Malay for it. And so that meant a lot of people went without transportation for a certain number, certain number of days. But even aside from that obstructionist kind of pain, there is the very real pain that has to happen anytime you are getting out of an economic predicament that you have gotten yourself into.
And Malay to my knowledge has been extraordinarily upfront about this. He's saying, look, we're going to do this and this is going to hurt for six months, it's going to hurt for a year. All of these people who are getting subsidies, well we take the subsidy away and it's been a 20% subsidy. That means that you have to come up with 20% somehow. And 20% for people who are already close to the line in a relatively poorer country like Argentina. That is, that's an economically painful thing. All of the people who were on the government payroll in various respects, if you don't get a job, well that's painful or you don't have a job now you have to find another job that is painful and so forth. So the point though has been, just to make the analogy, if you have been living large on your credit card for a certain number of years and you get religion, so to speak, with respect to how you're going to responsibly use your credit card, it's going to hurt psychologically and you are going to cut back on your lifestyle for a certain amount of that. So multiply that by 20 million, that's going to happen in Argentina. So yeah, so there is a lot of pain, but I think people have gotten the message and this is partly Malaya's economic educator, that this is a necessary pain that we're going to have to go through. But they are open to believing that with the economy being rebuilt that we can get past this pain and actually be better off in a year, two years, five years or whatever. So the other question then was about foreign relations there. I've been tracking much less. I know that he's done some international speeches at WEF in Switzerland. He was up in the United States a couple of times and gave some major talks there as well.
And I know that with respect to IMF and all of the international banking and economic organizations, many of them carrying credit or carrying the debt, rather, that Argentina has a lot of security, serious conversations that are above my economic pay grade. I don't know enough to be able to comment on those, but I do think that the fact that he's having the conversations, and that from what I've read, he's been very forthright about being a serious economist and a serious free market economist. All of that's going to go well.
[00:43:36] Speaker A: Okay, great. The next question that has come in, it's a little bit of a long one, so. So let me know if you want me to reread it. This is from Hope Malkin asking about the president's intention to. He's. Well, what it says is, I have recently read the president's intention to court investment in development in AI. This, of course, means Silicon Valley. I would like to know how he can square this intention with the reality of big tech's implementation of sensors leadership in this, in this country, and the bigger issue of AI as the linchpin of surveillance of the surveillance state.
[00:44:17] Speaker B: Well, I first wanted to just generalize that. I think the first thing is that Argentina desperately needs foreign investment.
So one thing is to homegrown your own capital, and Argentina can do that. It's got a lot of human capital, a lot of natural resources, but that's a longer process. A way of short circuiting that process is convincing foreign businesses that have millions and billions of dollars and expertise at their disposal to come into Argentina in order to invest and then speed up that process. So I know that they are actively incorring foreign investment. One part of the 238 item omnibus bill was to offer generous tax credits to foreign investors.
That then is to say, instead of saying paying 80% taxes, you'll only be paying 40% taxes or 30% or whatever the number is going to be.
And I think that's essential to have a more normalized tax rate if you're going to attract foreign investors. Foreign investors are not going to invest in Argentina if they're paying 80% taxes or 60% taxes, if they can invest in Canada and pay 30 or 40% taxes. So the tax differential is going to be important. The more important thing, though, there is whether the foreign investors will believe not only Malay in particular, but Argentina in general. Latin America in general has a terrible record of inviting foreign investors to invest billions of dollars. And once the infrastructure is in place, to then just nationalize it.
And sometimes this is done honestly by one administration that attracted the foreign capital and the infrastructure, but then they are out and a new administration comes in that's much more socialistic or communistic, and it just goes ahead and expropriates it. So part of it then is they have to convince the foreign investors that whatever billions they invest is going to be safe for five years, ten years, 15 years, years, whatever the time horizon is going to be coming to AI in particular. This, again, that's a narrow sector.
But I do think one of the interesting things about Argentina is that relative to other latin american nations, it has a more educated population.
I've seen statistics that Buenos Aires has more bookstores per capita than any other city in the world, and it has had for some generations. So it's a relatively more literate population, and education is taken relatively seriously in higher education.
And so Argentina has largely suffered the problem of a brain drain.
And so lots of top Argentinians who are ambitious end up making their fortunes and successful careers outside of Argentina. So it is natural for a country like Argentina to say that if one of our human capital assets is very smart people with an education for then us to emphasize high tech, and AI is the hottest and sexiest and perhaps most promising part of high tech tech in this area. So Argentina wants to be involved in all of that. And so that would then be a judgment call. Again, I'm a philosopher. I'm not having a seat at that table in order to make that particular judgment.
But then the tail end of that question was to say, yeah, well, of course AI and any kind of technology can be abused. So to the extent that there are surveillance, surveillance issues, and then we're bringing in AI, and if it Argentina ends up being a surveillance state down the road, that would be a net negative. So that would be a concern. But I think that's a, that's a normal, to everyone in the world concern right now. That's not a unique argentinian problem.
So I'll stop there.
[00:48:36] Speaker A: Okay, next question comes in from Arno. He asks, while Malay has had some success, there are other leaders, Maloney in Italy, Poland, in Bulgaria, with different levels of libertarian versus conservative mix and success. Can we draw any larger conclusions?
[00:48:58] Speaker B: I'm sure someone can, but I can't, just because I have better knowledge of what's going on in Argentina for various reasons. And I have. I don't think I have any particular expertise with respect to Italy? I've not been following that at near the same level, but I think I have more concerns about Italy. I have more concerns about Poland. Obviously, I was spent time in Poland as a visiting professor a couple of times, so I have better knowledge there.
And while I'm very impressed with how Poland has, over the course of the last generation, pulled itself out of the malaise of communism, it's a very impressive case study. At the same time, there are some legitimate concerns about the degree to which it's going in a more conservative, authoritarian direction as well. So with that, though, I'm going to have to stop, just because I am not enough of a political scientist to say I have done the expert level study of what's going on in Poland, Italy and Argentina, and I can do a point by point compare and contrast to come up with the kind of overall conclusion the question is asking for.
[00:50:16] Speaker A: Fair enough. Another question comes in here from Scott asking what lessons of Malay can pro liberty politicians here in the US incorporate?
[00:50:28] Speaker B: That's a very interesting question.
One lesson is that it can be done. I think many people who are liberty friendly in a principled way in the United States are naturally discouraged that both the republican parties and the Democrat party are very far from libertarian or objectivist or even classically liberal politics.
That the libertarian party, not that I've paid much attention over the years, but seems to be a disappointment in a lot of respects. So there's a tendency to give up and say it's impossible. So the fact that there are countries where people who have genuinely liberal libertarian views can be successful politically and can play the game, that should be encouraging immediately then to say, one of the other lessons is that that seems to be packaged with the idea that it's not only that you have to have someone who is a principled liberty person who's willing to go into politics and keep his liberty soul intact, so to speak, not be corrupted. But it does seem to be the case that things have to get really, really bad before in a democratic republican context, enough people are willing to vote for you. So I think one of the sectors, for example, that seems to be finally turning around is the education sector, say, in North America. But it has taken decades of underperformance and just ideological nastiness in the education sector for millions and millions of people in America and to a lesser extent in Canada, to finally say enough is enough.
We're going to try to seriously reform education. We're going to do all kinds of entrepreneurial outside of the government sector activities to do education seriously. So education really had to hit rock bottom for us to start taking it seriously. So using that just as one example, one of the lessons seems to be that we have our work cut out for us before the general population is in a position to vote for liberal libertarian policies, freedom policies on their own merits and not just, well, we tried everything else and that was a disaster. So I guess we might as well try liberty.
Great.
[00:53:14] Speaker A: So I've seen a number of questions throw through Zoom and elsewhere already touching on something you've asked, you've covered about pushback to what he's trying to do either from other people in government or from how he's doing with the sit and reside. But since there's so many questions about that, maybe you could go into a bit more detail. Maybe what is the biggest obstacle that Malay is going to face, maybe from either other political groups in Argentina or just from the general populace in regards to his policies, what do you think is going to be the biggest challenge for him moving forward?
[00:53:51] Speaker B: Yeah, well, so if you're just focusing on domestic argentinian politics, not anything external, then there's, there's the electorate and so there's the question of is he going to continue to make the case that we're going through a painful process but we are rebuilding and that by the time the next election comes around, an election season three, four years from now, a significant number of the population is still with him. They've been able to endure the shock of transition, their lives are economically better off than they were and so on. So that's one, and I think that's going to be an open question. I'm cautiously optimistic on that one. One. The second one is the internal coalition of liberals of various sorts, libertarians of various sorts, conservatives of various sorts, the coalition government that Malay put together.
My sense is this is not a super informed opinion, that he now has a working team, that he is accepted as the leader and that they are going to be more or less internally functional, that the, the amount of backstabbing and obstructionism will be kind of normal level backstabbing and instructionism inside the coalition and that they should be able to go forward. So that leaves the third group, which I think is going to be the most formidable, and that is the people who are politically and ideologically be opposed to any sort of liberal libertarian approach and to Malays government in particular. So that's going to be the significant number of people in the Congress, in the general legislature and among the Senate who no matter what are going to be opposed to Malay, personally to the party and they will just do whatever they can in order to block. Now he's not going to change their minds. So then it's going to be a matter of politicking in some cases compromising and horse trading in order to do to deal with them.
And then allied with them are going to be two more subgroups there, the people in the bureaucracy. A significant number of them have been let go. So the ones who remain in the bureaucracy, probably they will still, some of them be obstructionist because they disagree, but they are probably going to be more quietly obstructionist because they know that Malay now is serious and he has no compunction about firing them. If he gets any whiff that they are not, they're not with the, with the program. The more serious longer term constituent outside of Malay's group is going to be the intellectual though the people in the media, the newspaper, and they are quite monolithically opposed and that's a significant force on public opinion. And then among the professors and the professional intellectuals in other organizations, they are still even more so than what we are used to in North America opposed to any sort of liberal libertarianism. So I think that battle of ideas is also in a longer term going to be important whether he can win that one. I don't think he can win that one. It's not going to be his job to win that one. Over the course of the next three or four years, those sorts of intellectual arguments, that debate goes much more slowly. That's a generational thing. So he's going to need a lot of allies among the think tanks and those people who are currently ideologically in the minority position in Argentina and, and fellow, fellow countries. So short term I think his party or his coalition is with him. You're not going to change the minds of the politicians who are opposed to them. I think the bureaucracy is just going to go along, some of them rather sullenly, but some of them will be appointed by the new government and will go along willingly.
Intellectual public opinion is the longer game. That's probably the most important one for Argentina 1020 years from now.
[00:58:19] Speaker A: Okay, great. Now we're coming down to the last three minutes or so. Before we wrap up, there's a lot more questions. So I apologize to everyone who we're not going to get to all of them today, but to sort of cap things off a question that is pretty appropriate for this audience, I think this comes from Jacobi on Instagram. He asked how should objectivists contend with Malays religious ground?
[00:58:46] Speaker B: Well, I don't know very much about his religious grounding. I know that he converted to Judaism and but beyond that, I don't know how much that's a matter of personal faith. That is something separate from his political views, from his economic views.
So I understand that he understands from my limited personal interactions with him, but from also the stuff that I have read from him that he is a savvy enough politician to know that Judaism is a minority religion. And so his job is not at all to try to convert people to Judaism. That's not a part of Judaism anywhere anyways. It's not an evangelistic religion. We have to convert the masses and get everybody. And I don't think I see any signs that he is seeing any his personal religious views as important to.
[00:59:52] Speaker A: The.
[00:59:52] Speaker B: Kinds of policies that he's going to be focusing on, particularly with respect to economics over the next few years. So the only possible important issue is going to be, say, the abortion issue, where Judaism, there are various strands of Judaism and they have different takes on the abortion issue. But some of the more conservative forms of Judaism are anti abortion and some of the members of malays coalition government are of a more conservative ideological outlook. And for some of them, abortion is a much more important issue than economic issues and so on. So some of his kind of important people inside the coalition want to elevate that issue. But to my sense of the situation, I think that's the only place that I know of where Malays rather personal religious views might get some traction in the next few years.
[01:00:57] Speaker A: Okay, very good. And with that, we've reached the top of the hour. So big round of applause for Steven for doing that very sort of comprehensive overview of what Malaysia went up to and getting into the nitty gritty details. So thank you so much for this, Stephen. And I want to thank everyone who joined us today. If you enjoyed this video or any of the other content we produce here at the Atlas Society, please consider making a tax deductible donation at Theatlas Society and be sure to join us next week. Our CEO Jennifer Grossman will be back and she will be interviewing best selling author Amber Smith about her latest book, unfit to fight, how woke policies are destroying our military. Thanks again, Stephen. Have a wonderful night.
[01:01:51] Speaker B: Thanks, Lawrence. Bye for now.
