“I do not understand why the Argentines are charged corn in the same way that they charge it at the price the world pays” President Alberto Fernández said yesterday in a radio interview. Something similar raised for the meat: “If they all produce in pesos, why do Argentines have to pay a kilo of roast as a German does. Why? I do not get it”.
The President’s reasoning reveals three disturbing aspects: a wrong aspect from the theoretical-conceptual of its policy, imbalances in the coordination of the areas of Economics and a mistaken belief about the scope of the public policies and state capacity to put imbalances back on track.
Let’s see the FirstWhat does economic theory say? There are at least two arguments why Fernández’s phrase is inapplicable (or at least without contraindications). The first has to do with microeconomic theory: People always try to sell the product of their effort at the highest possible price. And if the price of corn or meat in Argentina is lower than the international one, with export quotas they will end up producing less. An efficient market such as commodities (it operates on the stock exchanges), has a single price and selling below it affects business. When the government’s measure was known, the future of the ton of corn fell by 8 dollars. In the 1940s, 1950s and 1960s, Argentina was able to implement these quotas because the world food market was restricted and they did not have the consequences that there are in a globalized world. From the point of view macro, the damage is to exports. The country in the 60s sold less than in the 20. According to Ecolatina calculations, Argentina today sells its meat internally below the world average.
He second One aspect worth noting is that the President’s idea goes against what economists such as Martín Guzmán or Matías Kulfas, today at his side, argued. They both criticized (and have told Axel Kicillof) the basic proposition of Kirchnerism: the increase of the economy can be demand-driven, forever. If that were the case, Argentina would have already solved poverty with the K. But precisely physical restrictions operate as well as Kulfas recounted in his book The Three Kirchnerisms to criticize Kicillof’s stage (which Cristina defends most). Whose side is the President on then? To increase the supply, investment stimuli are needed as explained by Guzmán. The minister knows.
By latest. In the Government a phrase that says like this is usually repeated “We did not come to administer but to govern”. Beyond an invocation with romantic overtones, Kirchnerism always haunts the overestimation of the tools available to the State and public policies to resolve imbalances in the economy or discipline markets. A clear case was that of Vicentín. Does Fernández think that he can lower the prices of the economy by stepping on the dollar, tariffs and exports? Will Argentina want to change global integration? Cuba he started the year with an adjustment and the message that you cannot redistribute what is not produced. No more.