International Man: Milei has vowed to privatize state-owned companies. How would you suggest he does this while ensuring it doesn’t create a new class of oligarchs as it did in Russia in the 1990s?
Doug Casey: For years, I have proposed to many governments that when they privatize, not to do so by selling State assets but by distributing them in the form of shares directly to the people. After all, the people theoretically own all State assets. Make it a reality with share ownership. That plan is pure capitalism but is also about "power to the people." How can you give people more power than giving them direct tradeable share ownership?
They tried something similar in Eastern Europe in the 1990s. But it was complicated; the people didn’t understand what they were getting and typically sold their ownership rights for pennies on the dollar to would-be oligarchs.
To avoid that problem, Argentina should distribute shares pro-rata to all citizens. The shares would be "lettered" and unsalable for a couple of years while prices stabilize, then saleable at perhaps 5% per year over 20 years. Many people would keep them because the dividends should be attractive, and the share prices should go up radically as the economy booms in an inflation-free, regulation-free, and largely tax-free environment.
This is the ideal way to privatize. If the industries are sold, they’d be bought cheaply (perhaps due to corrupt payoffs) by foreigners and the well-connected rich, creating antagonism. At some point in the future, they’d be subject to nationalization again for some reason. However, a future government won’t be easily able to re-nationalize these businesses if the people own all the shares. Ownership by the public would, in addition, help defang the unions, which are a major impediment to prosperity in Argentina.
International Man: Historically, Argentina has stayed out of large global conflicts and remained relatively neutral. In recent years, Argentina joined the BRICS+ countries and became more geopolitically aligned with Russia and China. Milei has said he will reorient Argentina towards the US and Europe geopolitically. What is your advice to Milei on how he should conduct Argentina’s foreign affairs?
Doug Casey: I hope Milei comes to recognize that America today is not what it once was. America, the ideal, is wonderful. But America, the current nation-state, is very different. Henry Kissinger once said something to the effect of: "It’s dangerous being America’s enemy, but it’s even more dangerous being America’s friend." He’s right.
Foreign policy-wise, Milei ought to emulate the example of Singapore, Switzerland, or Dubai and be completely neutral. As Jefferson said, a friend to all, but allied to none. An Argentine ambassador should do no more than make small talk and be friendly. Quite frankly, the country doesn’t need a foreign policy. It should be up to 45 million individual Argentinians to decide who they do or don’t want to deal with.
International Man: If Milei succeeds and his reforms stick, what are the investment or speculative implications for Argentine assets? What are the lifestyle and other international diversification implications?
Doug Casey: If Milei’s reforms stick, within a decade, Argentina could become the most prosperous country in the world. Look at what Pinochet’s limited reforms did for Chile. It changed from a backward mining province into the most advanced and prosperous country on the continent. Milei’s reforms could transform Argentina into both the freest and the most prosperous country on the planet.
Argentina has many advantages. It’s geographically isolated, away from the winds of war which might blow in the Northern Hemisphere. It’s a giant country almost the size of Western Europe but with only 45 million people. It’s got absolutely everything in the way of resources, climate, and scenery. Argentina is the perfect country whose only real problem is its insane government. But that’s about to change.
If he succeeds, I think there will be a rush of millions of Europeans who will see that Argentina has got everything that Europe does - including the favorable aspects of its culture, but none of the disadvantages. It’ll draw the best kind of immigrants, people with capital and education that are anxious for freedom and are self-supporting. Very unlike the migrants currently overwhelming North America and Europe.
What’s just happened is something of world historic importance. I urge you to get on a plane and investigate firsthand. It’s summer there now, and the weather is beautiful. The prices of everything from steak dinners to estancias are at giveaway levels. They won’t be for much longer."
