Argentina Agonistes: The Separation of Money and State (Michael Munger, November 29, 2023, AIER)

Argentina is in many ways an advanced nation with a moronic government, saddled with the ditzy wishful thinking of Peronism. Argentina has a tax collection/compliance rate of less than 40 percent, more characteristic of a third world nation. As Leonidas Zalmanovitz pointed out last week, the real problem is a consensus on reducing inflation, not fiddling with rules.

Still, rules and institutions matter. Combining the “generosity” of Peronism, albeit generosity with the money of others, and the inability to collect taxes, has meant that the government has systematically gutted the value of the already threadbare peso. That issue, more than any other, is the reason that an outsider such as Milei was able to win by nearly 20 percent of the vote, a landslide rejection of orthodoxy. It is worth taking a step back and considering the sources of these “Argentina Agonistes,” and thinking about Milei’s core promise: the separation of money and state. I wonder if future generations will look back and wonder, “what took them so long?”