Argentina is notorious for its economic calamities, but for decades it has also been deeply immersed in a different kind of crisis: a legal one. Indeed, the relationship between most Argentines and the law is so contentious that politicians and journalists regularly cite disregard for the rule of law as a cause of economic backwardness. If people just followed the rules, the argument goes, then they would prosper. Everyone would pay their fair share of taxes, and the state would have enough money to provide basic services and assist the poor.
In popular culture, lawlessness is presented as one of the main characteristics of Argentine society. Perhaps the most important symbol of that is the country’s most famous poem, the Martín Fierro (1872), which tells the story of a gaucho who gets drafted, deserts the military, and then becomes an outlaw who is pursued by the police. But decades later, Jorge Luis Borges, perhaps Argentina’s most important writer in the 20th century, would still write that:
The Argentine, unlike Americans and almost all Europeans, does not identify with the state. This may be attributable to the circumstance that governments in this country tend to be awful, or to the general fact that the state is an inconceivable abstraction, but one thing is certain: An Argentine is an individual, not a citizen. (‘Nuestro pobre individualismo,’ 1946.)
Today, the main academic source for anyone who discusses lawlessness in Argentina, and particularly the theory that it causes economic backwardness, is the book Un país al margen de la ley, written by legal philosopher Carlos Nino. In the document, Nino coined the concept of anomia boba or ‘silly anomie’ to explain the country’s ‘tendency towards illegality.’ His main argument is that Argentines refuse to follow specific sets of rules in daily life because they believe they personally will be better off defying them, with the result that everyone is in the end worse off than they would have been had the rules been followed. According to Nino, it is the attitude toward the law, rather than the law itself, which is problematic. And since the resulting state of anomie is silly, he concludes that it must be changed. But what if there is something amiss in that equation?
In terms of social cooperation, abiding by the rules may lead to improved economic outcomes for most people, but the opposite could also be true. In fact, if following the law causes a majority to be worse off than they would have been by breaking it, then it is reasonable to expect people to disregard the law. And it is at this point that an alternative hypothesis arises to explain Argentines’ apparent disregard for the rules: What if there is something in the law that hinders individual progress and thus incentivizes people to disregard it? What if a relaxed attitude toward law, far from condemning society to backwardness, is actually an Argentine survival strategy? And what if the solution to that problem is to change the content of laws rather than the people’s attitude towards them?
To explain the evolution of Argentine law, it is useful to examine constitutional changes, and particularly those that were made to the 1853 Constitution, which is still active today. Juan B. Alberdi, who had the most influence at the time of writing, purposefully followed the model set by the American Founding Fathers so as to establish the kind of rule of law that a classically liberal society would need. Argentina declared, in the 19th century, that everyone in the world who wished to do business in the country could do so; that internal, bureaucratic barriers to free trade were to disappear; that no privileges would be extended by the government to anyone; and that private property was an inviolable right. As Isaiah Berlin might say, the document considered liberty in a negative way. The state’s role was simply to set rules for individuals to act and flourish.
Ever since its inception, though, the Argentine Constitution has suffered from several changes that have modified its spirit. In many instances throughout the 20th century, new articles incorporated into the Argentine Constitution have recognized social and collective ‘rights,’ the enforcement of which depends on increased government intervention. The 1949 reform, for example, instituted a ‘social use’ of property that directly paved the way for the state to violate property rights. That change, though later overturned, would serve as the basis for Article 14 bis of the Constitution, which was added in 1957 and is still active. This section, among other things, guarantees the existence of a minimum wage, mandates ‘fair’ salaries for workers, demands that they get a share of whatever capital gains exist, and effectively bans the state from dismissing public employees.
Further reforms solidified the increasingly interventionist spirit of the Constitution. The 1994 Convention, for example, added the concept of ‘environmental rights’ in a way that implies proactive government intervention. This and other third and fourth-generation ‘rights,’ particularly those that demand affirmative action for various groups to ensure the ‘true’ enforcement of other constitutional rights, show that the concept of liberty embedded in the document is no longer negative, but has become positive: The state is to actively intervene in order to bring about specific results.
Unsurprisingly, Argentine law has become more and more interventionist. Congress has, at various times in the past, nationalized private businesses and pension funds, and it has established and increased dozens of different taxes with the result that effective total tax rates are over 100%. But bureaucracy has also increased so dramatically that complying with legislation costs small and medium businesses 500% more time than their counterparts in neighboring countries such as Brazil. And even though the evolution of bureaucratic stringency is difficult to measure over time, available evidence for the past decades suggests the situation has gotten worse: According to the Fraser Institute’s Economic Freedom Ranking, Argentina ranked 36th in 1970 but ranks 151st out of 165 countries today in terms of regulation, which means it has become more and more bureaucratic. It is no wonder, then, that informal employment now accounts for as much as 45% of the total workforce. The ‘tendency towards illegality’ that Nino identified in the Argentine society seems to be caused by the state itself.
Lawlessness is not a random feature of Argentine society. The normative problem with the Argentine economy is not lawlessness at all, but rather overregulation on the part of the state. What is needed is not better enforcement or the creation of new laws, as Nino would suggest, but less and better legislation, which would enable people to comply without driving their businesses into the ground.
However, the chaos that results from reacting to overregulation goes beyond the economy. In 2020, for example, during the Covid-19 pandemic, Argentina had the longest quarantine in the world, and the government imposed such strict measures that people eventually started massively disobeying them. Businesses were striving to survive, of course, but regular citizens were also just trying to exercise fundamental human rights like the ability to leave their homes without a permit or meet whomever they wanted to meet. By making it impossible for people to enjoy basic freedoms, the Argentine government forced everyone to disobey. Laws existed, but they were absurd, which in practice meant that spontaneous order ensued.
The problem with Argentine law, in the end, seems to be that it has gone astray. Instead of allowing law-abiding citizens to do business as they see fit, it has turned into a mixture of suffocating regulations and outcomes-based legislation that forces people to remain outside of its boundaries in order to survive. In this regard Borges, who sensed something was wrong almost a century ago, expressed with clarity not just the source of this problem, but also the coping mechanism that Argentine society continues to embrace decades later:
The most urgent problem of our time… is the gradual interference of the state in the acts of the individual. In the battle with this evil… Argentine individualism, though perhaps useless or harmful until now, will find its justification and its duties. (‘Nuestro pobre individualismo,’ 1946.)