Despite abundant evidence that the economic policies of the last several months have been highly destructive, the government has persisted with them. Argentina’s economy and political system are being ground to dust. How the resulting social upheaval is resolved will determine the shape of Argentine society for a generation or more.
The basic question Argentina has been unable to resolve since the 1930s is what type of economy it should be. Should it be a business oligarchy? Mercantilist? Fascist? Socialist? Populist? These possibilities have been tried in Argentina and elsewhere and have failed. Our recommendations are based on the assumption that most Argentines will eventually conclude that they want a market economy. They may unfortunately have to suffer much more pain experimenting unsuccessfully with other systems before they reach that conclusion. Developing the social consensus in favor of a market economy is a hugely important task, but we will say no more about it because the area in which we have the most to contribute is describing what economic reforms are desirable once the consensus in favor of a market economy exists.