By Atilio Boron on March 11, 2025 from Buenos Aires
In his address to both houses of Congress on March 1, President Javier Milei reiterated that one of the objectives of his administration is to reduce the size of the state in Argentina to 25% of the GDP. We are not going to dwell on refuting, from the point of view of the history of economic ideas or economic theory, the nonsense of his proposal.
Many scholars have devoted numerous writings to refuting the president’s statements, demonstrating that “really existing capitalisms” — not the ones that churn chaotically in Milei’s mind — have always needed the crutches provided by the state. Whether in its implementation phase, as in the original accumulation, as much as in its maturity to facilitate the progress of the capitalists’ business and, above all, to throw them a lifeline every time capitalism enters into crisis or its reproduction is threatened.
The most significant cases are the state bailout of capitalism during the Great Depression of the 1930s and, more recently, the bailout of banks and large companies during the inappropriately named “mortgage crisis” of 2008.
Let’s put this history to one side and take a look at today’s developed capitalist countries and see how big the state is, measured by the level of public spending in each of them. In stark contrast to what the far-right politician claims, countries with developed capitalist systems are characterized by a strong state presence, which is measured by the high level of public spending in proportion to their GDP.
In 2023, in France, for example, public spending amounted to 57% of GDP; in Finland, 55.8%; Italy followed with 53.8%; Belgium, 53.3%; Austria, 52.7%; Sweden, 49.4%, for the same year and always in relation to GDP. Germany, traditionally faithful to economic orthodoxy and invariably governed by conservative or right-wing social democratic forces, showed a public spending of 48.4%.
Could it be that the leadership of all these advanced capitalist countries fell into the hands of “fiscal degenerates”, to adopt the disqualifying and insulting lexicon that Milei likes so much? Obviously not. Even if we look at the figures for the US, the country in the developed world with the lowest ratio of public spending to GDP – and therefore with the worst quality of social services among the G20 countries – the ratio is 36.3%, eleven percentage points above the paradise that the current government is trying to take us to.
If Milei’s proposal were to materialize, Argentina would have a profile of public spending in relation to GDP comparable to that of some of the most underdeveloped countries in the world. Mauritania, for example, with 24.9% of public spending in relation to its GDP, illustrates very well what the consequences of moving in the direction proposed by the government could be: 67% of people are below the poverty line and it has a scandalous infant mortality rate of 47.9 per thousand live births.
Mali, which borders Mauritania, is another case to bear in mind: its ratio is 25.7% and its correlate in the face of the practical absence of the State is 80.5% of people below the poverty line and a shocking infant mortality rate of 64.1 per thousand live births. Is that the Argentina we want?
In the Caribbean, the Haitian tragedy portrays in stark relief what happens when the dystopia of anarcho-capitalism is put into practice. In that country, the first to gain independence in Our America (1804, defeating Napoleon’s army), the public spending/GDP ratio is 6.40%.
Without a state, without public health or education, without armed forces or police, without investment in roads, bridges and housing, without a legal system to punish criminals, the case of this troubled country demonstrates what happens when a society is left without a state — in the case of Haiti, destroyed by successive invasions by the USA and the brutal dictatorships imposed by Washington —: society devolves into the dreaded “state of nature” portrayed by Thomas Hobbes, in which man is wolf to man. Without a state, private violence prevails, and the country is at the mercy of armed gangs that thrive everywhere.
The heartrending example of Haiti is a borderline case, but one which, with its brutal exaggeration, illustrates the dismal outcome that looms over a society when its state order has disappeared. Hopefully the mole infiltrated into the bowels of the Argentine state with the evil intention of destroying it from within can be stopped, before it is too late.