Economist specialized in Economic Development, Strategic Marketing and International Markets. Professor at the University of Belgrano. Member of the Liberal Network of Latin America (RELIAL) and Member of the Institute of Ethics and Political Economy of the National Academy of Moral and Political Sciences.
This article was published in El Argentino on June 28th, 2021.
Pope Francis recently added his voice to the debate surrounding private property in Argentina, declaring that it is a secondary right that arises from the universal destiny of created goods. A string of voices followed, either accompanying or refuting those sayings.
Agustín Etchebarne, economist and director of the Fundación Libertad y Progreso, is among those in the second group. He soon remembered the encyclicals of Pope John Paul II and his sayings regarding the “subsidiary” function of the State in those sectors where the private sector had arrived.
In a brief review of Argentine history, he states that the founding fathers took refuge in the ideas of freedom due to the great influence of the Scottish school of Adam Smith and John Locke, “who founded the idea of private property.”
“Man has freedom because he is master of himself. You are the owner of your mind, your body, and the fruit of your work ”.
For Etchebarne, historically, the right to hold property was “enormously successful” as a way to administer assets and adjudicate community land since if it “belongs to everyone, then it belongs to no one. At this point he referred to the “tragedy of the commons”, a dilemma in which “if no one takes care of it (land) it doesn’t produce well, who is going to make a huge effort to produce if it is not yours”.
According to the economist, the search for self-interest ends up generating wealth and causing poverty rates to collapse. As an example, he referred to countries with institutions that ensure the right to property: “not only does the private sector develop, but poverty falls.“
Always speaking in defense of freedom, Etchebarne highlights the Assembly of 1813 as the moment in which the abolition of slavery was dictated in Argentina and equality under the law was established through the abolition of prerogatives of blood and titles of nobility. However, he warned that the constitutional reform of 1994 re-enacts this though allowing the acquisition of rights due to having indigenous blood.
“This idea is tremendously negative even for indigenous peoples because it represents a return to collective rights, it is going back 200 years,” he added. He described the situation that, he considered, would follow: Since, collectively, the one who has access to the rights is the head of the tribe, this creates inequality between people. The chief of the tribe gets to decide, he has an influence on the rest of the people, which is out of the ordinary and can lead to undue favors and exchanges.
He continues along the same lines: “Not all pre-Columbian cultures followed communitarian principles. They could kill one another simply because they had the authority and there were no written laws. That is why the Malones could attack cities, taking the cattle and enslaving women sexually”.
“The private sector is getting smaller and smaller and still has to pay the bill because the public sector lives off taxes.”
After referring to Europe’s zero per capita growth until the year 1000, it barely rose to 0.06% per year until 1800, he explained Adam Smith’s ideas on the nature of the wealth of nations and spoke out against the heavy tax burden of the States: “when they begin to say ‘I am going to distribute the wealth’ it is a disincentive to the producer. If it is done through taxes at some point you are going to take the ability to grow out of the economy and you will shrink it. And that is Argentina’s problem”.
Analyzing the current situation, he referred to the excessive growth of the public sector and the distribution of social plans that, to date, reach 22 million people compared to 6 million workers in the formal private sector. This breaks the operating scheme of the country.
“There is no way to solve this with patches, to make an economic plan based on the growth of the State, it is impossible to get ahead through the State“. He then referred to the need to reduce public spending by 15 points. “It is not a question of adjusting but of the liberation of young people about the entry of a million people to the labor market over the next four years,” he explained.
“We have to stop talking about poverty and start talking about wealth,” Etchebarne suggests before pointing that governments “with the excuse of poverty do a lot of tricks against those who produce wealth, so we are going to continue in this vicious cycle where Argentina is getting smaller. A decaying spiral in which there are more fights because the cake is smaller”.