Don’t Cry For Me, Cry For Argentina

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One of my favorite cities in the world is Buenos Aires. Or at least it was…the last time I was there was in the late nineties. Since then, Argentina has suffered a complete economic meltdown, followed by a mild recovery.

But why settle for a mild recovery when government can deliver a total catastrophe instead? That’s where Cristina Kirchner comes in. Sra. Kirchner is a more successful version of Hillary Clinton. Just as Mrs. Clinton hopes to do here in the United States, Kirchner was elected president of Argentina last year solely on the basis of her prior experience as First Lady. Given that her formative years were spent as part of the Peronista Youth movement, I suppose we shouldn’t be surprised to see her driving Argentina to economic ruin in much the same way as Juan and Evita Perón did. In order to put the scope of Argentina’s economic problems in context, in 1998 the country ranked 19th on the Heritage Foundation’s Index of Economic Freedom. Ten years later, Argentina ranks 108th. The steady increase of government control over the economy has delivered high inflation and shortages of basic goods and services, which have in turn sparked protests in the capital city.

The current (but by no means last) crisis in Argentina is a farmers’ strike that started in early March. The farmers are protesting recent tax increases on soybeans and sunflowers which, when coupled with retail food price controls imposed by Sra. Kirchner’s husband, are making it awfully difficult to be a farmer these days – so difficult, in fact, that farmers are blockading the roads into Buenos Aires and destroying their produce rather than bring it to market. Store shelves are empty, people are mad, and politicians are blaming capitalism for all of the ills caused by misguided government policies. (See Mary Anastasia O’Grady’s excellent piece in the March 31st issue of The Wall Street Journal for a more thorough analysis of the crisis).

Argentina’s Minister of the Economy, Martín Lousteau, was discussing the strike recently and quipped, “you can’t fool around with people’s food.” An interesting comment to be sure, and one that could be taken any number of ways. Since I had read the quote on Upside Down World, an English-language socialist website that covers news from Latin America, I thought it would be worthwhile to see how the phrase was originally delivered in Spanish. Sr. Lousteau could have said either, “No se puede jugar con la comida de la gente,” or “No se puede jugar con la comida del pueblo.”

What’s the difference? Well, the first version is what Upside Down World translated as, “You can’t fool around with people’s food.” The second version would be translated as, “You can’t fool around with the people’s food.” Amazing what a difference a definite article can make in English, no? I suspected the latter, but indeed Upside Down World got it right and made a fair translation.

I looked for other sources on the issue, however, and saw that Lousteau criticized the farmers’ use of force in their strike. As far as that goes, I agree with him. The farmers certainly have the right to refuse to sell their own produce as they see fit, but they have no right to prevent others from selling. But Sr. Lousteau and other members of the Kirchner administration very clearly do not limit their criticism to the farmers’ use of force. Instead, they refer to the striking farmers as “oligarchs,” painting them as greedy and unpatriotic for bowing to the law of supply and demand, rather than meekly accepting government mandates and the endless losses they entail.

When one looks at Lousteau’s comments in their larger context, it is easy to see the collectivist nonsense that underlies all socialist thinking. Even if he did manage to avoid the overtly Marxist phrase “the people’s food,” it is clear that the Argentine government believes that the farmers are denying poor Bonarenses meals at prices the bureaucrats deem “reasonable.” According to the Peronist view espoused by Sra. Kirchner and Sr. Lousteau, the food with which one cannot fool is obviously that of the consumer (whether he’s paid the market price for it or not). As evidenced by their policies, they have no problem fooling around with the food that is created by farmers as a product to be sold.

Indeed, the government position seems to be that farmers are somehow obligated to deliver their goods to market under any conditions whatsoever, no matter how onerous they may be. If farmers are handcuffed by government regulations designed to force them to sell their goods at below-market prices, so what? If the increased costs of production caused by higher taxes ensure that the farmers cannot possibly earn a profit, who cares? The farmers should simply absorb the losses in perpetuity and keep breaking their backs to deliver the goods.

Obviously, this is an untenable position. No one – not farmers, oil companies, pharmaceutical corporations, nor any of the other bogeymen of today’s left – can absorb losses ad infinitum and continue to produce. It is simply not possible. The production of wealth cannot be divorced from its distribution. One cannot kill the goose and expect it to continue to lay golden eggs.

This has been proven so often that one would think it obvious by now. But evidently the sad history of price controls in the U.S., Venezuela, Russia, or anywhere else they’ve been tried is not enough to keep people from falling for the same tired old trick.

Argentina was not always the Peronist train wreck with which we are so familiar. The Constitution of 1853 was modeled on the U.S. Constitution, and for a century the country followed classical liberal policies that resulted in a standard of living higher than that of Spain or Italy at the time. (See Andrés Solimano’s paper titled, “Development Cycles, Political Regimes and International Migration: Argentina in the Twentieth Century” for more detail). As long as Argentina continued down this path, it grew more prosperous. Higher wages in Argentina attracted immigrants from all over Europe. All of that changed when Juan and Evita Perón rejected the classical liberal paradigm that had driven Argentina’s success, and opted instead for the modern redistributionist policies that have stunted economic progress all over the world.

One might wonder why any of this should be relevant to a reader in the United States. After all, we’re not dealing with a bunch of farmers on strike, and the government isn’t putting price controls on food. While that may be true, the differences between the economic policies of Argentina and those of the United States are really just a matter of degree. Argentina produced tremendous wealth by following classical liberal, laissez-faire policies. So did the United States. Argentina then threw those policies overboard in favor of the politically expedient but economically damaging concepts of wealth redistribution and positive rights. So did the United States. Today the issue in Argentina is food. In the U.S., it’s health insurance. Hillary Clinton, America’s own Evita, has been working tirelessly to convince us that we have a right to force other people to pay for our health care. Others want us to believe that we have a right to cheap gasoline and low mortgage rates.

The positive rights philosophy is nothing more than the idea that one individual has a right to a good or service that must be provided by someone else. What that good or service happens to be at any given time is not important. What is important is the fact that all policies based on this concept are doomed to failure, and will cause needless suffering wherever they are implemented.

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