Javier Milei gave a speech1 at Davos that, I imagine, didn’t go down too well. It argued that any state intervention in the market would doom a country to penury. Oddly, it took aim at neoclassical economists who, it argued, saw monopolies as evidence of market failure, which lead them to regulate firms, a slippery slope which quickly turns a country into an economic basket case, like Cuba or … Argentina.
I am not sure that Milton Friedman, the patron saint of neoclassical economics, would see regulation of monopolies as a central plank of his world view. I think that the classical view is that monopolies can, and do exist for ‘good’ reasons (because one firm has some technology or access to raw material that means that other firms cannot undercut it), and that ‘natural’ monopolies can exist because in some cases the total size of the market is below the size at which there come diminishing economies of scale.
Arguably, the Internet has eliminated the root causes of many diseconomies of scale, which has resulted in the ‘Magnificent Seven,’ firms which can extract economic rents because they have no serious competition.
I didn’t know much about Milei. Most reporting seemed to concentrate on his dogs, or his marital state, or his relationship with his sister. I think I vaguely knew he was a libertarian, and wanted to dollarize the Argentinian economy, but I had not appreciated that he wanted to scrap competition law. Even in the USA, where there is a coordinated attempt to weaken competition regulation, driven by corporate lobbying, I am not aware of anyone actually suggesting that the FTC should disappear.
Politicians often say things hyperbolically. It seems that although Milei promised to dollarize the economy, he isn’t really going to do it. Maybe he doesn’t want to get rid of all competition regulation, but simply wants to shift the Overton window a bit, so corporate regulation can be eased a bit. I have no idea, but I’m guessing that Milei will never be invited back to Davos. I am surprised that Klaus Schwab didn’t have a coronary when he heard what Milei was proposing. It must have ruffled more feathers than any contribution since Rutger Bregman’s famous challenge to the audience2.