The situation becomes dire when a nation’s economy falls under the control of a corrupt socialist regime. In such circumstances, hope and opportunities for prosperity wither away. Economic decisions lose their relevance as corruption and political alliances funnel resources into the hands of the few, leaving the majority at a disadvantage.
In this article, we delve into the insightful perspectives of our friend Joel Bowman, who shares remarkable observations through his Notes From the End of the World. Based in Buenos Aires, Argentina, Mr. Bowman has a unique vantage point on what he calls “The Greatest Political Experiment of Our Time.”
In recent years, President Javier Milei has implemented drastic measures to stabilize the economy, cutting government expenditures, reducing the number of ministries, and eliminating thousands of bureaucratic positions to combat hyperinflation and dismantle a corrupt political establishment.
The clearest understanding of this turbulent period can be gleaned from the stories and insights shared by those who have witnessed decades of political and economic mismanagement. Among these tales, you will find one that stands out—a poignant narrative viewed through the eyes of a 94-year-old, recounting events that have unfolded over the past 70 years.
Here’s the latest from Buenos Aires…
Enjoy!
MN Gordon
P.S. After exploring Mr. Bowman’s article, be sure to visit his website and subscribe to his newsletter to stay updated on the ongoing developments in “The Greatest Political Experiment of Our Time.” We hold no financial ties with Mr. Bowman and gain no profit from sharing his work; we simply appreciate the value of his insights and believe you will, too.
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The Tale of Mr. Scrap Metal
Exploring Peronist protectionism, flawed economics, and the path forward for Argentina…
“The years teach much which the days never know.”
~ Ralph Waldo Emerson, from his essay Experience (1844)
Joel Bowman with today’s Note From the End of the World: Buenos Aires, Argentina…
“After all these years, I remain fascinated by the complexities of human thought. Just for a fleeting moment, I wish I could experience true mental stillness.”
At 92, Ana embodies wisdom. She and her husband, Luis—turning 94 next week—paid a visit, sharing coffee and cookies. Despite modern discussions on gender norms, Ana unabashedly elaborated on the distinctions between men and women.
“Sometimes, I ask Luis what’s on his mind, and do you know what he replies? ‘Oh, nothing, dear.’ How I envy his simplicity! Alas, peace of mind seems elusive for us. Women are wired differently,” she assured our wife with a knowing smile. “We can’t simply switch off like men. Our minds are always busy, even if the thoughts lack significance…”
Realizing it was best to steer clear of that topic, Luis shifted his focus to his passion—his beloved Argentina—letting the women continue their lively conversation.
The Tale of Mr. Scrap Metal
“I see you’re keenly observing our grand experiment,” he initiated, his excitement evident. “Every day, my hope for the future increases. Did you catch the recent news about Don Chatarrín?”
We admitted we hadn’t, and expressed our preference to hear it from him instead.
“That’s the nickname President Milei has given to our leading steel magnate, Paolo Rocca—‘Mister Scrap Metal.’ I was astonished when I read it! This president is unlike any other politician I’ve seen; but I’ll explain more…”
“Señor Rocca, ‘Mister Scrap Metal,’ heads Techint, a significant multinational based in Argentina. They rose to prominence when I started my engineering career, winning their first major contract to construct an oil pipeline in Patagonia in 1949, shortly after Perón assumed office…”
“You must understand, that was a very different era,” Luis continued. “Perón was both a nationalist and a socialist, albeit in the most misguided ways. His core principles, las tres banderas [the three flags], included ‘political sovereignty,’ ‘economic independence,’ and ‘social justice.’ Many of his ideas were influenced by Mussolini. Discussions today about these concepts make it seem like we haven’t spent the last eighty years debunking them, but that’s beside the point…”
“Perón was a charismatic man and a compelling speaker, traits that can be dangerously appealing in a politician. He could persuade audiences to accept the most ludicrous ideas. Regarding what he termed ‘economic independence,’ he championed the concept of ‘import substitution industrialization,’ which sounds appealing—until you understand economic principles…”
Argentina First (to Last)
“The fundamental idea—clear, uncomplicated, and incorrect—was that Argentina could minimize its reliance on foreign imports by producing locally what had previously been imported, even at a higher cost for consumers. Naturally, consumers disliked paying more for inferior products, prompting the government to step in—enforcing their mandates in the name of the ‘greater good.’ Perón imposed tariffs and strict import quotas, limiting foreign competition and protecting local industries. Thus, his plan aimed to cultivate a thriving national manufacturing base, or so the theory went…”
“The outcome was entirely predictable—yet hardly anticipated. Instead of providing high-quality products at better prices, domestic producers exploited the protectionist policies, increasing their prices just below the artificially inflated rates of imports. With minimal competition, local industries became complacent, and the quality of goods deteriorated to the deplorable state we witness today. Innovation stagnated, and what was expected to be an economic revival became a dismal regression. Many businesses that did survive relied on tariff protections rather than superior product quality. Consequently, Argentines who once rallied behind Perón’s visionary ideas soon faced skyrocketing living costs and store shelves that were either filled with shoddy goods or completely barren. And that was merely the beginning…”
Luis shook his head, still bewildered by how such a grim fate unfolded…
“It was evident from the onset that Perón’s vision was flawed at best,” he continued. “Local industries still relied on imports for machinery, tools, spare parts, and various industrial needs. Suddenly, these essential items became prohibitively costly, and that cost was inevitably passed to the consumer. As local businesses faltered, the government intervened with massive subsidies to prop them up. With exports unable to keep pace and dollars in dwindling supply, the state resorted to printing money to meet its increasing expenditures. A growing monetary supply led to wage-price spirals and perpetual budget deficits. In response to this disaster, the government exacerbated the situation, implementing currency controls and printing even more of the local currency. What started as a cyclical nuisance, like a recurring cold, became a chronic ailment. Soon enough, corruption—always the most reliable resource in Argentina’s political landscape—followed.”
Indian Giving
“With authority concentrated in the state, the economy shifted from being about which businesses could deliver valuable goods and services to favoritism based on political connections. Contracts were awarded not to the best companies but to those who could manipulate the system, paying off the right individuals, and securing the right arrangements. The government was entongados [in cahoots], as we say, with powerful union leaders, the syndicalistas. Ultimately, Perón’s deceptive claims of ‘economic independence’ only enriched those who played the political game—the corrupt officials and their corporate allies.
“This brings us back to Mr. Scrap Metal. When a substantial contract for a major pipeline project in the Vaca Muerta oilfields was announced, Rocca likely assumed he was a lock to win. Historically, factors like quality and price wouldn’t have been primary considerations, given his well-placed connections. His firm’s bid was 40 percent higher than the competition—an affront to the very essence of market competition…”
“You can imagine his astonishment when his company lost the contract—part of a $15 billion LNG project—to an Indian firm, Welspun Corp. This was the first significant contract Rocca’s firm has lost in over 70 years, dating back to the Perón era. This transition marks a new chapter for us, rejecting the notion that the government knows best and should dictate markets from the top down. It’s time to embrace the power of the people in shaping our economy and lives. These truths are what we must correct. Very few are left who remember when this misguided protectionism took root. I’m grateful to witness its unraveling…”
“Don Chatarrín,” Luis chuckled again. “Remember Juan Perón. He was the politician. He laid this country on its disastrous path. What a relief it is to have Señor Milei, who is no politician.”
As we turned back to the ladies, absorbed in their conversation, we caught Ana saying, “We have but one rule in our family discussions: no politics.”
Sensing their partners’ renewed attention, Ana beamed at Luis and inquired what we had been discussing all this time.
To which her husband of over seventy happy years replied, “Oh, nothing, dear.”
Stay tuned for more Notes From the End of the World…
Cheers,
Joel Bowman
Founder of Notes from the End of the World
P.S. To catch all of Bowman’s latest thoughts, visit his website. While you’re there, subscribe to his newsletter for real-time updates and insights.
