An indicator that lying is not allowed: why our Argentines are living worse

The preferred metric of the wealth of countries is income per capita or GDP per capita. It is no more than the gross domestic production of a country divided by the size of its population. If the stock of material wealth remains stagnant and the number of inhabitants grows, the ratio decreases.

Why should we focus on this measurement to measure the evolution of well -being and not on more modern ones like indices that measure well -being, consumption or even people’s happiness, forms that economists have? to measure what is happening to people and the economy?

The answer in favor of using per capita income is that the physical and material well-being of millions of people is directly dependent on the GDP per capita of the country in which they live. That has been demonstrated by Nobel Laureates in Economics like Daniel Kahneman and Angus Deaton. There is a so -called positive correlation between per capita income and personal satisfaction.

Even further in history, for example the industrial explosion that occurred in the 19th century and that led to improvements in the living conditions of the people, it was associated with an unprecedented increase in income per inhabitant. after a long period (centuries) of economics. stagnation. In Argentina, a colonial economy prevailed that would soon present conditions for global capital to settle in its cities and farms, taking rents, multiplying and thus expanding the frontier of production. Capitalism, growth and population.

Increasing per capita income, therefore, makes it easier for a large proportion of the population to improve their standard of living.. Otherwise, only the most privileged can access them.

This process occurs in all developed countries. Ang social development is not the result of imposing sanctions or granting more rights to Parliaments, but material and economic development maintained over time in a country. Democracies have served unsatisfied requests.

In any case, it is insufficient growth, or insufficient growth, that hundreds of millions of people are experiencing extreme hardship and living in precarious conditions in the poorest countries. Although rights are allowed and laws are upheld, the lack of wealth of every resident there makes it difficult to fulfill electoral promises. If the population grows faster than material production, per capita income will decrease and social tension will increase.

It is important to understand what promotes per capita income growth and why didn’t it happen in Argentina between 2010 and 2021. It will serve to understand why some countries are thriving while others are failing.

Is the solution perhaps to distribute wealth between more and less, to improve per capita income? In short, the measure is average, meaning you are both Paolo Rocca or someone living in the lower part of the Bernal Triangle. Why not distribute the wealth and that’s it?

If that is done, there is a risk of improving the distribution of wealth, but not lack of growth. And the next day I had the same problem again.

The accumulation of capital explains the increase in production and GDP. And what is the reason for the increase in capital stock? Another Nobel laureate in economics, Robert Solow, responded that it was gathering people.

And how the rescue of the Argentines acted in a decade where inflation started at 20% and ten years later it was towards 70%?

Argentina’s economy was not growing then due to the lack of capital accumulation beyond technical development (which in any case the country knows how to take advantage of).

Some will say it’s all tax fault. Others, of money and so on, of external restrictions. But what Argentina needs is to take advantage of the new innovations that are emerging and turn away from obsolete technologies. There will be new companies born and competing with existing and new jobs and activities that will replace the existing ones. Creative destruction is the driving force of capitalism, ensuring its permanent and eternal multiplication.

But the only thing Argentina knows how to ensure so far is that rising inflation is colluding against the accumulation of capital and its per capita income.

Lord Keynes attributed the following statement to Lenin: “The best way to destroy the capitalist system is to destroy money”. More than what Lenin said or not, the phrase is applied to Argentina and explains why in the last ten years the cake distributed to the inhabitants here has been more and more women.