Javier Milei’s 18 Janaury World Economic Forum speech has, not surprisingly, received a great deal of attention. If ever there was a case of life imitating art, this was it. Ayn Rand at her most inspired could not have scripted it better. Here was an articulate, eccentric and utterly fearless outsider accusing Davos’s assembled grandees of failing to defend the fundamental values of the West. Milei’s speech brought to mind Ronald Reagan’s ‘Tear Down This Wall’ address in 1987. And even Martin Luther’s denunciations of the Catholic Church. For the historical record, here was another resounding, impassioned indictment of an authoritarian clique.

His opening lines say it all: ‘The Western world is in danger’ because ‘those who are supposed to… defend the values of the West are co-opted by a vision of the world that inexorably leads to socialism and therefore poverty’.

My sense is that many commentators missed the point of Milei’s speech. This was no mere economic defence of capitalism, but a powerful and unashamed ethical one – a rarity in today’s world and unheard of at Davos. Specifically, he set out to demolish the widely believed myth, not only among those on the left but also popular with centrists and even some conservatives, that free market economies, at least in their purest form, are immoral; or at the very least are without intrinsic ethical merit.

This proposition is accepted not only by avowed socialists and radical environmentalists, but also by Western politicians, economists and business-people who pragmatically accept capitalism but maintain it must be civilised or tamed in some way. As Milei points out, ‘since there is no doubt that free enterprise capitalism is superior in productive terms’ its critics ‘say it is evil and collectivism is good because it’s altruistic; of course, with the money of others.’

In countering these views, Milei puts his finger on their central philosophical flaw. Each one, he points out, posits a fundamental conflict. Whether between labour and capital, economic growth and the environment, or men and women (with patriarchal capitalism a tool of oppression). Conservative critics of capitalism, although not singled out by Milei, see a tension between selfish materialism and traditional values.

These imagined conflicts are metaphysical in nature and so impervious to rational criticism, much less empirical disproof. They are also crudely Manichean: in the contest between good and evil they contemplate, capitalism – and the freedom that lies at its heart – is seen as a force for ill.

As Milei recognises, once this fraudulent world-view is accepted, the door is opened to a whole range of freedom-destroying policies. Collectivism, in all its forms, is legitimised, whether it be the dictatorship of the proletariat; extensive government intervention we see in contemporary Western countries; or elites inflicting climate change and identity politics purity on the rest.

Far from being a solution to capitalism’s imagined evils, Milei points out, collectivism threatens its manifest blessings: respect for private property; an economy based on voluntary exchange; and the miracle of the market. Rather than being a recipe for social harmony, collectivism inevitably destroys it – narrowing the scope for freedom and widening the reach of compulsion. ‘Social justice,’ he reminds us, is ‘unjust because the state is financed through tax and taxes are collected coercively.’ It also shrinks the economic pie it seeks to redistribute.

I am deeply sceptical about the idea of a tax summit in Australia, but should one be convened I would make the following modest procedural suggestion. At the start of each day, dispense with the acknowledgement of country and instead have the chairperson recite the following lines (from Milei’s speech): ‘The higher the tax burden, the higher the coercion and the lower the freedom.’

Milei advocates limited government rather than no government. In this view, the state is a necessary evil, prone by its very nature to over-reach and abuse. In contrast to this healthy scepticism, collectivists glorify government as the embodiment of virtue, wisdom and omniscience. Conventional economists who should know better fall into this trap; both Keynesians and micro-economists who see market failures everywhere. This blinds them to the risks and pitfalls of interventionist policy. As Milei reminds his audience, when the market appears to have gone off the rails, there is invariably a government failure at the heart of it.

The global financial crisis is the most recent telling example of this. This was not caused, as the unreflective left claims, by unrestrained free market capitalism. While its full story is a complex one, foolish government policies played a key role, including a Clinton-era law which pressured banks to lend to low-income communities. This paved the way for the emergence of subprime securities, which as we know were seen by investors as risk-free (they assumed the government would cover any losses). Not surprisingly, they attracted a flood of capital. Once losses materialised financial panic spread, triggering a deep recession. While the profit motive was in play, misplaced faith in financial regulators and implicit guarantees made the crisis much worse than it otherwise would have been.

Far from this lesson being learnt, governments today are repeating this folly in their support for renewable energy: a sub-prime source of power no less.

I have no idea how Milei’s presidency will unfold. But his Davos speech is likely to be remembered for its moral clarity and power. He reminds us that far from having a monopoly of genuine idealism, the left – in its reflexive belief in the rule of the few over the many – trades only in its counterfeit version. He warns that in today’s world, the threat is posed not by old-style socialists, but misguided Western elites who seek to perfect capitalism but risk destroying it.

As Milei reminds his audience, the basic conflict, the fundamental moral choice we all face, is not between capital and labour, growth and the environment, or men and women, but between collectivism and individualism. It is apt, therefore, that he left them with this final rallying cry: ‘Long live freedom.’