Promised reforms in Argentina have only led to higher inflation, increasing poverty and unrest

Javier Milei has been at the helm of Argentina for just over 100 days. Since his inauguration on December 10, the far-right libertarian has been on a mission to end the “orgy of public spending” of previous governments, which he says left him with “the worst legacy” of any government in Argentina’s history .

Thanks to his extremely libertarian program, which Milei says will make Argentina great again, he has been compared countless times to Donald Trump, who has already heaped praise on him. It has also won him other powerful admirers; Elon Musk showed himself to be a big fan of Milei’s speech at the World Economic Forum in Davos this year.

But convincing his Argentine fellow citizens of his vision proves more difficult for this political outsider. The self-described “anarcho-capitalist” won November’s presidential election on a promise to end Argentina’s skyrocketing inflation by letting the free market transform the state. So far he has failed to deliver on his promises: inflation doubled during his first month in office, although it has since slowed. Poverty rates have skyrocketed and the retail sector has plummeted. Milei has faced widespread protests on the streets and hit a wall in Congress, which has so far twice rejected his plans, which he says will make Argentina “a world power again.”

All this headwind raises a disturbing question: who is Javier Milei really? Is he the economic visionary who convinced voters and elicited from Musk the prediction that “prosperity lies ahead for Argentina”? Or is he the power-hungry thug against whom tens of thousands of Argentinians are now taking to the streets, chanting the slogan “The country is not for sale”?

Archetypal caudillo

One thing is certain: Milei is no Donald Trump. Although his anti-establishment personality and incendiary rhetoric invite easy comparisons to the former US president, Milei is the product of a long South American history in which authoritarianism is the norm and democracy the exception. Although he embraces some elements of the Trump populism flowing from North to South America, Milei is more of an archetypal South American caudillo, or strongman, than a Trump impersonator.

Like Venezuelan strongman Hugo Chávez, his ideological opposite, Milei wants to amass extraordinary power to save his country. For decades, Argentina has been held up by free-market economists as one of the world’s leading examples of how progressive economic policies can lead to disaster. They argue that Argentina was ruled by conservatives in the late 19th and early 20th centuries, but at the time the country was one of the world’s top economies. However, left-wing governments came to power and caused spending to skyrocket with unaffordable social programs, creating a chronic inflation problem. In his December 10 inauguration speech, Milei expressed nostalgia for that long-ago era of economic success and boasted that Argentina was then “the richest country in the world” and “a beacon of light of the West,” which was of course an obvious exaggeration.

Argentina was not a paradise at the time. Between 1874 and 1916, one political party seized all power after election fraud. Although Argentina became an agricultural colossus, the period was also marked by endemic corruption, excessive international loans, recurring financial crises and empty public coffers, which the government tried to fill in the same way Milei tries to do today: by privatizing state-owned enterprises.

Argentina’s current democratic period, which began in 1983, is the longest in its 208-year history. But the economy has proven beyond repair for dictators and democratically elected leaders alike, left and right. Since independence from Spain was achieved in 1816, the picture has been marred by inflation, defaults on foreign debts and various convertibility schemes.

‘Taxes are theft’

Milei won over voters last year by promising to end this long economic ordeal by ending what he sees as the root cause of all evil: “the aberration called social justice.” Much of his economic policy was inspired by the work of Murray Rothbard, a 20th-century American libertarian economist who was friendly with Holocaust deniers and accused by critics of supporting racial segregation. Elements of Rothbard’s ideas were important principles of Milei’s presidential campaign, including his slogan ‘Taxes are theft’ and his promise to abolish the Argentine central bank.

Milei blames progressive governments such as that of Cristina Fernández de Kirchner, who was in power from 2007 to 2015, for the many ills plaguing the country. He has already begun to dismantle Argentina’s welfare programs and withdraw the government from education and health care.

So far, Milei doesn’t seem averse to putting democracy on the rack, as his vision of a libertarian paradise faces political resistance. On March 14, the Senate overturned a presidential order giving himself authority to pursue cost-cutting reforms without congressional approval. (However, the decree will remain in force unless the House of Commons, where the president has a better chance, also rejects it). Last month, congressional opposition also forced him to withdraw the omnibus free-market bill that was the cornerstone of his economic plan and would have allowed him to privatize state-owned companies and deregulate large parts of the economy.

According to a report, Milei said he was going to “piss off” on governors who refused to support his bill and added that he could shut down Congress. He called the lawmakers who voted against the bill “parasites.”

Inflation

It remains an open question whether Milei has misjudged his voters as to how far they are willing to go to change the Argentine economy. Perhaps he is testing the limits of Argentina’s on-and-off democracy to realize his dream of transforming the country from a soft, populist nation dominated by prosperity and social rights into a libertarian utopia where the strongest can realize their full potential, unhindered by redistribution . Even if Milei’s policies ultimately lower the prices of basic goods, Argentinians may not accept being denied the public health policies that generations of their countrymen have enjoyed, or seeing their elected leader threaten to sideline the legislature.

After all, Argentina is not as much of an economic disaster as Milei and like-minded critics make it out to be. The country has a diversified industrial base and is a major agricultural exporter. It has the second highest Human Development Index in Latin America and is the third largest economy in the region, with a highly educated population and a still strong, if battered, middle class that knows how to fight for its rights.

In January, shortly after taking office, Milei went to Davos with a message for the world’s business people. “Don’t let anyone tell you that your ambition is immoral,” he said. “You are the true protagonists in this story, and rest assured that from today Argentina is your faithful and unconditional ally.”

As the enthusiastic responses from Musk and others show, his message has been well received by the wealthy. But Milei will have to make an equally convincing appeal to the real protagonists in this story: the people in the streets and roads of Argentina. Their patience may run out faster than expected if Milei does not quickly tame inflation, something few have done in Argentina’s long history.

If he fails, he won’t be remembered as the libertarian genius that Trump and Musk make him out to be. He will then go down in history as yet another in a long line of South American would-be caudillos who failed to deliver on their promises, but made life difficult for millions.

_{© The New York Times}