Protectionism in Argentina

The Economist recently described protectionism in Argentina, including the micromanagement of imports:

For firms that refuse to (or cannot) move production to Argentina, the government offers another option: deals to export goods worth at least as much as a company’s imports. In January customs officials stopped letting Nordenwagen import Porsches. Its cars languished in port for three months before the firm succumbed to a deal. Since its owners also possess Pulenta Estate, a vineyard, they agreed to launch a new line of mass-market wines for export, erasing the family’s trade deficit.

Argentina restricts exports, too:

Even before Ms Fernández’s late husband, Néstor Kirchner, became president in 2003, Argentina was taxing farm exports. The policy was meant to raise revenue. But the Kirchners later justified it as a way of discouraging commodity exports in favour of manufacturing. In 2008 Ms Fernández sparked protests by trying to raise taxes on soyabeans, Argentina’s chief export, and lost a congressional vote. Since then the country has restricted maize and wheat exports, leaving farmers with an estimated 4m tonnes of maize they can neither sell at home nor ship abroad. Beef exports have also been limited, which caused ranchers to stop raising cattle and led to lower leather output and beef consumption. Many foreign leather firms, such as Italy’s Italcuer, have left.

The top comment on the article, garnering twice as many votes as any other, argues that the policy of the Argentine government is sound because other countries are protectionist, while the second most popular comment, attracting half as many votes, responds that the stupidity of your neighbor is not a good reason for you to be stupid, too. Both participants are Argentinians, so I suppose the majority get the government they deserve and the minority are oppressed.

Economic nationalism is a philosophy of war where a thug with a gun and a government employee badge threatens peaceful people who want to exchange goods and become richer. Ludwig von Mises asked us to imagine a Utopian world where:

  • everybody were free to live and work as entrepreneur or as employee where he wanted and how he chose;
  • frontiers are drawn on the maps, but they do not hinder anybody from the pursuit of what he thinks will make him more prosperous;
  • no institutions hinder the mobility of capital, labor, and commodities, in which the laws, the courts, and the administrative officers do not discriminate against any individual or group of individuals, whether native or alien;
  • governments are devoted exclusively to the task of protecting the individual’s life, health, and property against violent and fraudulent aggression.

In the first video below, John Lennon asks us to imagine a world where everybody lives for the moment and nobody saves their possessions. In the second video, Jackson Browne suggests that it is clever to prepare for a very rainy day.

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