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The Roar of the Argentinian Lion
Will the election of Javier Milei as Argentina’s new president finally put the country’s economy back on track?
I first met Javier Milei in Buenos Aires back in 2016 through a common friend who, like us, was part of Latin America’s free market movement. When we met one day for coffee, Milei asked me to sign for him my 2009 book “The Fatal Ignorance,” which looked at how collectivist ideologies in my country, Chile, were taking over government institutions and predicted that this would eventually lead to the destruction of the free market system there. Unfortunately, a few years later, that grim prediction became reality.
The rise of collectivism in Latin America was certainly a concern that captivated Milei then, and that concern has taken on a new significance now that Milei has been elected president of neighboring Argentina. Milei has emerged as one of the free market’s staunchest defenders in the region, and as he takes office, look for him to move quickly to ensure that Argentina’s economy doesn’t end up like Chile’s did.
Head of a Libertarian Revolution
The fall of Chile’s free market deeply impacted Milei. During the recent presidential campaign, he often made the case that the only way to turn around Argentina was to create a new cultural hegemony capable of replacing socialism, Keynesianism and Peronism. Thus, unlike former president Mauricio Macri and most Argentinian technocrats, Milei came to believe that winning the battle of ideas on every possible level was the crucial issue—and so he left the private sector to become a public intellectual with the goal of changing Argentina’s prevailing collectivist narrative.
The apostolic zeal with which Milei defended freedom from the cast of “parasites” that have run Argentina into the ground, coupled with his aggressive and uncompromising style, transformed this previously unknown second-tier soccer player and economist into the leader of the most transformative grassroots revolution in Latin America’s modern history. Entering the public sphere six years ago and politics much more recently, he has completely changed the terms of political debate in Argentina, harnessing voters’ anger over triple-digit inflation and rising poverty and setting in motion a true libertarian revolution.
The magnetism of Milei’s preaching can only be compared to that of statist caudillo Juan Domingo Perón. Perón surfed a collectivist wave that had been awakened decades before he came to power in 1946. Milei, on the other hand, created a libertarian movement nearly out of thin air in a country that was collectivist to the core. This makes him a political phenomenon even more unlikely than Perón and a case study for the entire Western world. It is not the case, as many have argued, that people who support him do so mainly because they reject the current establishment and want someone radical to punish it. Rather, Milei has truly achieved a structural change in the mindset of millions of people—especially the young, by bringing them closer to libertarian ideals.
The Messi of Argentine Politics?
Even though Milei had been an outsider dismissed by just about every political analyst in the region, I always believed that he could become Argentina’s next president. After that first coffee we enjoyed back in 2016, he and I gave a series of lectures around the country. From the first moment we entered the stage to speak in front of a thousand or so university students, I realized that this eccentric character possessed what German sociologist Max Weber called “charismatic leadership.” Charismatic leadership, explained Weber, requires an extraordinary ability to inspire others with one’s vision and mission—and it’s something that Milei possesses in spades.
In a way, Milei’s mission in Argentinian politics is a lot like the mission of another son of Argentina. Last year, Lionel Messi led Argentina to victory in the World Cup, restoring Argentina’s status as the greatest soccer nation in the world after decades of frustration. Politics may be a far messier business than soccer, but just as Messi gave hope to desperate Argentinian fans, Milei has also given hope to millions of his fellow citizens that the country’s former economic glory can be restored.
Working Back to an Economic Golden Age
Unlike most Latin American countries, Argentina indeed has an economic golden age to look back to. In the late 19th and early 20th centuries, Argentina had a per-capita income surpassing that of Italy, Japan and France. In 1895, it even achieved the highest per-capita income worldwide, according to some estimates. Moreover, Argentina’s 6% annual GDP growth for the 43 years preceding World War I is the largest in recorded history. Argentina’s impressive economic performance was not based on the export of raw materials alone: Between 1900 and 1914, the country’s industrial production tripled, reaching a level of industrial growth similar to that of Germany and Japan. All of this was accompanied by unprecedented social progress. In 1869, between 12 and 15% of Argentina’s economically active population belonged to the middle class; by 1914, this number had reached 40%. At the same time, illiteracy was reduced to less than half of the population.
The foundations for Argentina’s prosperity had been laid by Juan Bautista Alberdi, the intellectual father of the nation’s 1853 constitution. An admirer of the American founding fathers, Alberdi conceived Argentina’s constitution to restrict the government’s ability to interfere with economic freedom and individual liberties. The Argentine Federal Constitution contains “a complete system of economic policy, insofar as it guarantees, by strict provisions, the free action of labor, capital, and land, as the main agents of production,” explained Alberdi. But with the election of Perón, Peronism came to dominate economic and social life. Under his leadership, price controls were introduced for the first time, and dozens of companies were nationalized. The constitution was reformed, free trade was restricted and public spending increased, leading to an explosive surge in inflation.
While other countries later abandoned the anti-market policies they had embraced during the 1930s, Peronism became so entrenched in Argentina’s institutions and political culture that the country never managed to restore economic freedom. In 1975, around the time of Perón’s death during his third term as president, Argentina ranked 10 among 106 countries in the Economic Freedom Index published by the Fraser Institute of Canada. In 2020, it ranked 161 among 165 countries. Put simply, Argentina—once the richest countries in the world—has become a corrupt, impoverished, rent-seeking society with 150% inflation yearly, a poverty rate of almost 50% and a massive exodus of young professionals looking for better opportunities elsewhere.
This is why Milei often cites Alberdi and never misses an occasion to remind Argentinians of the glorious past that free market institutions made possible. Alberdi once said that the root of most problems was the reliance of individuals on government assistance, and now Milei argues that all Argentinians need is to have faith in themselves and be willing to take the risk of embracing freedom. “I did not come here to herd sheep but to awaken lions,” he declared almost every time he spoke in front of crowds during the presidential campaign. It’s not surprising, then, that Milei’s campaign symbol was a roaring lion, with a voluminous mane and teeth bared. Its message was clear: Milei came roaring onto the political scene, and the oligarchy is afraid of him because they know he means business.
Milei certainly faces challenges as he takes the nation’s highest office. From day one, he will have to take immediate action to fix the economy—otherwise, he will lose his political capital overnight. However, his chances of success might be greater than anyone thinks: His solid double-digit victory over Peronist candidate Sergio Massa gives him a clear mandate to implement drastic changes. Moreover, Milei managed to win all but three provinces across the country and get support across different social, economic and age groups. Argentinians have shown that they prefer to take the harder uphill road of structural reform rather than the familiar downhill slope of economic decline. It will now be up to Milei to tame the Argentine economy and ensure that his roar is backed by real action.