The inflation rate is the third highest in the world. Prices are skyrocketing. Wages are plummeting. Four out of every ten people live in poverty. It is not hard to understand why Argentines don’t want more of the same. Or do they?
The results of the electoral first round might have you think that Argentines prefer the status quo. The ruling coalition candidate and current economic minister, Sergio Massa, took the lead, however, he will now contend directly against a political newcomer who is shaking up the status quo.
While Davos is trying to push woke capitalism worldwide, a true free-market economist is fighting back in Argentina. Javier Milei, a libertarian populist, won more than 30 percent of the first-round vote and is preparing to go head-to-head with Argentina’s economic minister in the ballotage on November 19.
But before Milei even has the chance to win, outlets like The Economist are attempting to paint him as everything that is wrong with Argentina. They’ve even attempted to brand him a “danger for democracy.” Nothing could be further from the truth.
First and foremost, while Milei may indeed be a threat to cosmopolitan sensibilities about who the people should support, if he comes to power at all it will be through popular means. Secondly, the three-hour interview that The Economist conducted with Milei reveals that he not only isn’t a threat to democracy in the slightest but that, if he becomes president, he will vehemently oppose authoritarian powers.
When asked about the People’s Republic of China (PRC), for instance, Milei responds that the PRC “does not respect the conditions on which I decide who my allies are. Freedom, democracy, peace.” He also insists that he will not align with communist regimes or Latin American leaders sympathetic to the Chinese Communist Party: such as Brazil’s Lula da Silva, who made his first official state visit to China this past April, or Chile’s Gabriel Boric, who just traveled to Beijing last week.
In short, if Javier Milei is a threat to democracy, then China is the leader of the free world. But no one seriously believes this propaganda, least of all Argentine voters, who are increasingly rallying around Milei.
The real reason Milei upsets The Economist and others isn’t his supposedly anti-democratic rhetoric, but his anti-establishment policies. Take his call for dollarization or his promise to eliminate the Central Bank, for example. Such policies might threaten the international financial system, but they could potentially help Argentina, considering that the government’s addiction to mass public spending—financed by the central bank printing of pesos—has made the country’s economy one of the weakest and most volatile in the world. It doesn’t have to be this way. Almost a century ago, Argentina was among the richest countries in the world. It even earned the nickname “the world’s barn” thanks to its natural endowment of rich topsoil and remarkable ability to export agricultural goods worldwide.
Then, in 1946, the country was hit with its first tsunami of economic malpractice in the form of Peronismo, named after Juan Peron and his wife Evita. In addition to giving sanctuary to Nazis, together the couple trashed the Argentine economy and eroded the country’s future by expanding the power of labor unions, creating lavish welfare programs, engaging in massive deficit spending, and introducing a form of “corporate socialism” that put Argentina on a path toward cronyism that continues today.
Some sixty years and several debt defaults later, Argentina entered a depression and was hit with its second political tsunami called Kirchnerismo. Once again, a presidential power couple placed Argentina along the path of economic peril. Néstor Kirchner, who was president from 2003 to 2007 along with his wife, Cristina Fernández de Kirchner, who became president for the following eight years to 2015, began their political careers as members of the Peronist youth and brought Argentina back into the fold of poor economic management.
Under the Kirchnerista leadership, Argentina grew addicted to debt-fueled public spending that prompted inflation to rise. By 2012, currency controls were in full effect and Argentina’s foreign currency reserves started plummeting, introducing the “dollar blue” as the unofficial exchange market that opened the country to massive money-laundering and corruption. Last year, Cristina Kirchner was convicted of public corruption by an Argentine Federal Court for stealing nearly $1 billion from false public works projects when she was president. The conviction bars her from public office once she finishes her term as the current vice president of Argentina and is likely the reason she did not run for president this year.
This is the history that is making Javier Milei popular today. He is a verbose but practical economist who promises real reform, in stark opposition to the Peronis
t-Kirchnerist movement and its presidential candidate, Sergio Massa, who steered Argentina into an economic abyss. And perhaps Milei is on to something.
After all, Argentina did not need a central bank to become an economic powerhouse. The largest period of economic growth in Argentina’s history (between 1880 and 1914) came well before the creation of its Central Bank in 1935. And the sixty years prior, GDP grew at an annual rate of 6%, the fastest in the world at the time. With the bank’s excessive printing of pesos spurring a recession and now driving inflation over 100 percent for the first time this century, Argentina finds itself at a dangerous inflection point. While Javier Milei might have a populist style, his country’s survival could depend on radical reform, and his economic proposals may be precisely what is needed to not only save Argentina’s economy, but also its democracy.
Joseph M. Humire is the executive director of the Center for a Secure Free Society and a visiting fellow in the Douglas and Sarah Allison Center for Foreign Policy at The Heritage Foundation.