The rise of libertarianism in Latin America has made free market capitalism fashionable in recent years. Indeed, the popularity of intellectuals such as Chile’s Axel Kaiser, Guatemala’s Gloria Alvarez or Argentina’s Javier Milli would have been hard to imagine a few years ago. In many cases, these icons and their supporters dominate the economic conversation in traditional and social media.
Intellectuals on the left were not slow to react to this surge in the popularity of free markets and accused their defenders of being extremists. inside Has the rebellion turned right?, historian Pablo Stefanoni questions whether being ‘rebellious’ is now synonymous with being right-wing. Historian Federico Finchelstein has also clearly equated the economically libertarian concept of Latin America with ‘post-fascism’. A Brief History of the Fascist Lie. This comparison is also common in mainstream American media. (Examples can be found in academic journals and in the press.)
But free-marketers are far from far-right or fascist. If anything, this confusion reveals that society has moved to the left over the past century. Indeed, as we shall see, it is impossible to call free-marketeers ‘extremists’ without taking into account a certain evolution of ideas and principles over time.
Many of the most popular economically liberal proposals in Latin America would have been described as ‘classical liberal’ almost a century ago. In Argentina, for example, Javier Mille became known primarily because he called for the abolition of the central bank. And indeed, Argentina’s classical liberals expressed their concern about the existence of such a national entity before it was created in 1935. In particular, classical liberals (and even socialists) warned that political pressure on central banks could allow governments to impose indirect taxes on everyone—which is exactly what happened. It is not surprising that after decades of high inflation there are renewed calls to eliminate the institution in 2022. Yet the idea of eliminating the central bank, which was extreme a few decades ago, still seems ludicrous to free-market advocates today.
More generally, free-marketers face an ideologically uneven playing field in Latin America. If we take the size of government as a variable, we notice that the average level of government spending in Latin American countries has risen from marginal to account for more than 30% of GDP. However, public discourse is so left-leaning that the ‘burden of proof’ falls on libertarians to demonstrate why the size of government should be reduced to levels that only a few decades ago would have been considered compatible with classical liberalism. Even social democracy. In Uruguay’s 2019 presidential election, for example, sheer idea Fiscal adjustment was described as ‘barbaric’ by the left-wing candidate. This shows how left-wing positions have become standards against which ideas and proposals should be measured.
inside The new politics of the welfare state, Paul Pearson argued that the development of the welfare state made reducing the size of government an increasingly unpopular option, since so many depended on it for their livelihoods. In Latin America, the same argument can be applied to trade in a country like Brazil: for decades, protectionist policies have created so many interest groups that rely on high tariffs that even Paulo Guedes, a staunch supporter of free trade who has been economy minister since 2018, Experiencing serious difficulties in lifting. Yet that hasn’t stopped left-wing analysts from accusing him of being part of the far-right, as if a world with less protectionist barriers than existed in the past is unimaginable.
Left-wing intellectuals are using the term ‘libertarian’ to denote extremism: but this ‘extremism’, at least in economics, is merely a function of time. Central banks, tariffs, the size of government: many of the ideas promoted by liberals were, in the past, supported by classical liberals and even progressives who no one would accuse of extremism. The recent mainstreaming of the anti-capitalist left in Latin America doesn’t mean that free-market capitalism has no precedent, so the next time you hear someone describe free-market economics as extremist, remind them of the historical context — legitimizing capitalism. For they have to think again and present real arguments. If they are able.
Marcus Falcone is Project Manager in Argentina Liberty Foundation its host remember Bi-monthly contributor to the podcast and Argentine edition Forbes.