Can visionaries such as Musk and Milei prevail?

As an economist, one of the simple principles I rely on policies analysis is that Motivation matters. In the last century, as the size and scope of the government have expanded, so the authority of bureaucracy – unleashed officials managing state affairs. Their motives and another basic principle, interestingHelp explain how and why this growth continues.

I had first witnessed the rise and corrosive effect of an expanded situation on my home country in Argentina. After moving to the United States four decades ago, I noticed similar momentum here: the established bureaucrats gaining enormous power, with strong incentives to protect and maintain their influence. It is considered objectively-through the motivation lens and the interest-the system appeared to be fixed. Over time, the bureaucracy appeared to be destined to prevail with the elected leadership.

Then, during these recent years, a surprise came: two extremely unusual figures-Javier MileiThe newly elected Argentine president, and Elon MuskOne of the most transformative entrepreneurs of our time in the political and economic scene. Steve Forbes often joke about predictions, “all we know about the future is that it will be different.” While we can predict financial trends with some confidence, it is impossible to predict the appearance of a Javier Milei or Elon Musk on the political scene. Both men share the characteristics of excellent intelligence, intense focus and tendency to challenge traditional social standards. However, everyone has won their way to the center of some of the most subsequent discussions and decisions in the world.

The challenges they face and my doubts about their chances of success brought to my memory the first meeting of the Mont Pelerin society I attended. Convened with the title “Restrictions on the government” and took place in September 1980 at Institution. Ronald Reagan’s election was still uncertain at that time, and most speakers had doubts that he could even defeat Jimmy Carter, let alone reduce the power of bureaucracy. The conference was full of spiritual giants – Milton Friedman, Thomas Sowell, Murray Rothbard and others. Fa Hayek was scheduled to attend, but had to cancel the last minute.

William E. Simon (1927-2000)Former US Treasury Secretary presented a document with a striking criticism: “During the last century, the commitment of business leaders and free business workers provided so many benefits has been dramatically weakened.

Simon’s point was repeated by many speakers who emphasized the terrible, often hidden power of bureaucracy. Pascal SalinA respected French economist reinforced this view: “The problem is not only ideology, but also privileges and acquired interests.

Similarly, Michael Walerwho grew up in Canada Fraser Institute In a top worldwide think tank and still sits on his board, he noted that senior civil servants were ensuring the continuation of the policy regardless of which party was in power. The institutional knowledge and their alliances with special interest groups were a major obstacle to reform.

The view from the southern hemisphere was no more optimistic. Malcolm R. FisherWriting about Australia, he described the resilience of the bureaucrats: “The power of the bureaucrats is extremely strong – political change does not need to disrupt the quiet, effective – and their sovereignty could keep everyone in the vagina except the most active ministers.”

Fisher also described how bureaucrats often use delay, indecision and inactivity to eliminate political leaders who threaten their areas. One of its most frustrating conclusions was that conservative governments, at best, only soften the regulatory state. They rarely disassemble it. Thus, the control mechanism remains ready to be revitalized by the next administration that is willing to intervene.

Ezra SadanSubsequently, the General Manager of the Israeli Ministry of Finance warned that the bureaucracy scope was expanded beyond its employees, which includes countless government services. These workers, he noted, often believe that they understand not only how to achieve the goals of their body, but also who these goals should be. In an ironic manner, he concluded, The only power that the big government can be limited can be the government itself.

I had doubts about it. Creation of bureaucracy to combat a bureaucracy? Shortly after my college graduation, decades before Chatgpt, I helped a businessman write a Ph.D. Dissertation with the drafting of published research on how to weaken the power of bureaucracy. I did not have a hand in the final composition of the dissertation, which went against my libertarian prejudice: the prospective doctorate proposed the creation of a new government department, a bureaucracy, to reduce bureaucracy and regulations. To my surprise, this person was influenced by a few years later, the Argentine government created such a service and appointed him a minister! However, it did not complete much.

Nearly four decades later, President Javier Milei set up a ministry of liberation and transformation of the state (Minister de Desregulación Y Transformación Del Estado) in Argentina to do a similar job. His mission is to “increase financial freedom, reduce public spending and improve government efficiency”. He was appointed one of the most integrated academic economists in America, Federico Sturzenegger, head of the department. Sturzenegger was in public service before as head of the Central Bank (2015-2018), but then President Mauricio Macri did not dare to face bureaucracy. President Milei, on the other hand, authorized him to go to break. At the end of last year, in a small private meeting with a leading world economist, Sturzenegger said he felt like he was in Toyland, able to apply all the best financial lessons. He acknowledged that it was a major boost in his efforts when President Milei publicly approved his work, especially against strong established interests, “but I must do so carefully so as not to deviate from the goals of our free economy.”

And that brings us to Elon Musk, who won the confidence of President Trump and promoted the creation of the Doge, the Department of Government Effectiveness. It will take time to make a final Musk agreement. This may be an excessive generation, but many of us old fiscal policies and the theory of bureaucratic decision -making have never believed that we would attempt such efforts to reduce bureaucratic costs and waste.

The bureaucratic rule, which seems to have replaced the rule of law, had never been disputed as it has in recent months, first in Argentina and then home to the world’s largest economy. In my analysis at the beginning of the year, I said that I thought it would be easier for Javier Milei than for Trump to apply drastic cuts, as Argentine bureaucracy offers almost no service effectively and has few honest supporters. In the United States, however, bureaucratic services tend to be more effective than in Argentina. The results so far show that over the first fifteen months of the Milei administration, it reduced more than 45,000 government jobs and eliminated one -third of senior government positions. US estimates range between cuts from 220,000 to 280,000 jobs in just 4 months. The US population is seven times larger than Argentina and its economy is forty times greater, so efforts are comparable.

Doge is targeting several organizations and organizations, such as social security administration, internal revenue service, US Peace Institute, USAID and others, to reduce waste and fraud. However, several federal judges block or react to actions, making the future of reforms uncertain. Congress has so far failed to support all the cuts. With Elon Musk soon leaving the city, the success of his effort is in the air.

During his recent interview with Qatar’s financial forum, Elon Musk He was asked why Doge only achieved a reduction of $ 170 billion instead of the $ 2 trillion he appreciated. Musk, who believes that the overall impact should be evaluated over time, replied: “Doge’s ability to work is a function of whether the government and this includes Congress, is willing to receive our advice.

As excerpts from the leading economists I mentioned above show, many of us expected that, regardless of the importance of Doge’s goals for the economy, those who were affected would fight hard to prevent reforms. Lord Peter Bauer (1915-2002), considered one of the best growth economists of all time, stressed in one of his books: “People often refuse to abandon the attitudes and mores that prevent financial performance. They are not willing to abandon the established ways for greater prosperity. This is a preference that is neither unjustified nor reprehensible. ”

Is the rule from the bureaucracy defeat Elon Musk? I still don’t count it, but it will take many other courageous people, inside and outside the government, to continue the struggle that led to the first half of this administration.