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It took a second round of voting, but the libertarian Javier Milei has defeated his Peronist rival to become president of Argentina.
A month ago, Javier Milei unexpectedly lost the first round of the Argentinian general election to his left-wing Peronist rival, Sergio Massa, after the latter had cynically promised zero taxes as a way to bribe voters.
In my column on the lessons South Africa could draw from that election, I said: ‘Let’s hope Argentinians see the light before Massa and Milei face off in the run-off election.’
Happily, they did see the light.
After decades of economic malaise under a government that for most of the last 30 years has been socialist, corrupt, wasteful and incompetent, leaving Argentina eighth from last in the Fraser Institute’s Economic Freedom of the World Report 2023, they elected Milei, a libertarian firebrand, in the biggest landslide since Juan Perón’s election in 1973.
Milei becomes the first libertarian president, not only of Argentina, but in the world. The closest precedent that comes to mind is that of Calvin Coolidge, the small-government conservative president during the Roaring Twenties in the US, but Milei is far more radical than that.
‘Today the reconstruction of Argentina begins’, he said, after winning 56% of the vote in the head-to-head race. That was also his first lie as president-elect, since he doesn’t actually take office until 10 December, but we’ll let that slide.
Radical
To describe Milei as radical would be putting it mildly. He has described the country’s ruling elite as thieves and the government as ‘a criminal organisation’. He has promised to abolish ten of the government’s 18 ministries. He said he would do away with the central bank and dollarise the Argentinian economy.
‘The model of decadence has come to an end’, he told his supporters. ‘There’s no going back. We have monumental problems ahead. Inflation, lack of work, and poverty’.
Milei is an accomplished economist, and largely follows the Austrian School of individualist free-market economics. He has variously described himself as an anarcho-capitalist and a minarchist (an anarchist who accepts the legitimacy of a small government dedicated to protecting life, liberty and property).
He has been extraordinarily outspoken on the evils of socialism and statism, and how they turned Argentina from a once-wealthy world power into an over-indebted, poverty-stricken, underdeveloped basket case.
Mainstream media
The mainstream media, with its largely left-leaning bias, has compared Milei to former presidents Donald Trump of the US and Jair Bolsonaro of Brazil.
‘Argentina set for sharp right turn as Trump-like radical wins presidency’, trumpeted the Washington Post.
‘Argentina Elects Javier Milei in Victory for Far Right’ was the headline in the New York Times, which added: ‘Argentina’s next president is a libertarian economist whose brash style and embrace of conspiracy theories has parallels with those of Donald J. Trump.’
The ‘embrace of conspiracy theories’ is a particularly vicious jab. Readers would have to follow a link to find an explanation, and it turns out that the Times only referred to Milei’s allegations of polling irregularities, which have not been tested.
It is entirely plausible that Argentina’s electoral system is less secure than that of the United States, and that the incumbents – who went as far as abolishing taxes in order to engineer a win – might have been involved in some electoral skulduggery.
Allegations of election fraud are very common on all sides of the political spectrum, and do not, in and of themselves, rise to the level of the debunked claims of Trump, and his attempt to derail the orderly election of his rival.
Authoritarians
More importantly, both Bolsonaro and Trump are alt-right populists. They are moral authoritarians – not liberals – and appeal to collectivist – not individualist – principles such as nationalism and protectionism. They have often, rightly, been described as fascist, which is just as antithetical to libertarians as is left-wing socialism.
That both former presidents expressed their support for Milei has a lot more to do with shared anti-socialist positions than any real congruence in their political philosophy.
Milei has himself rejected the right-wing label, and indeed, his classical liberalism (for which ‘libertarian’ in the American sense is a synonym) does not yield to a simplistic left-right analysis. Rather, it falls on the liberal end of an authoritarian-liberal scale, and on the progressive end of a conservative-progressive scale.
Sour-grape-ish
Milei does have some views that are questionable, or traditionally associated with the conservative right, such as his anti-abortion stance and his rejection of climate alarmism.
Neither define him, however, and both are issues on which libertarians can and do disagree.
By similar logic, Milei’s promise not to dismantle Argentina’s extensive social welfare programmes does not make him some sort of left-winger.
In focusing on incidental agreements between Milei and leaders like Trump and Bolsonaro, and ignoring the fundamental philosophical differences between the former’s individualist, free-market, small-government ideas and the authoritarianism, nationalism, populism and protectionism of the latter, the media does both Milei and their readers a great disservice.
That a politician does not perfectly reflect all one’s personal political or moral views is in any case far less of a concern when that very politician proposes as far as possible to keep government out of people’s personal affairs and to leave most of the world’s problems to the private sector.
‘When your response to everything that is wrong with the world is to say, “There ought to be a law,” you are saying that you hold freedom very cheap’, said Thomas Sowell.
Moreover, it seems extraordinarily petty and sour-grape-ish to complain about a few differences of opinion with a candidate who promises radical change in a country that is mired in economic crisis, thanks to the policies of its incumbent rulers.
Music to the ears
Sniping from the mainstream press aside, the rise of a truly libertarian president in one of the world’s most economically unfree countries should be music to a classical liberal’s ears.
Who doesn’t want to radically slash the size of government? Who doesn’t question the inflationary monetary policy of highly indebted countries? Who doesn’t want to see free enterprise flourish, and witness the departure of a government that strangles business with red tape and taxes, and tries to pick winners by throwing subsidies at favoured companies?
On the face of it, this should be an excellent experiment to show whether the libertarian prescriptions for government do, indeed, produce a better outcome than the socialist quagmire in which Argentina has been stuck for so long.
Pain and gain
Practically speaking, however, there are reasons to remain skeptical.
First, we’ve only seen Milei’s talk, and not his walk.
Second, making drastic changes in the structure of a country’s government and economy, as Milei proposes, will be painful.
It is arguable that the short-term pain is justified by the long-term gain, but electorates are rarely forgiving to those who inflict necessary pain. Witness Margaret Thatcher, who saved Britain from the socialist economic malaise of the 1970s, but remains hated to this day by those who bore the brunt of her reforms.
Dollarising an economy does not produce immediate results, for example. It can take years before the stabilising effect of dollarisation filters through to low inflation rates. It can, however, immediately harm people and even increase poverty levels, depending on the exchange rate at which existing deposits are converted.
Drastically reducing the size of government will also face much immediate opposition, especially from civil servants who stand to lose their jobs.
Privatising healthcare, education or other government functions is also fraught with transition difficulties. Much depends on exactly how such privatisation is carried out. It can fail, and even if the eventual outcome is a success, it could cause years of disruptions and dissatisfaction.
Then there are the entrenched patronage networks of the incumbent socialist government, who will be highly upset – and fight back vigorously – when the taps of corrupt fiscal spending get turned off.
Finally, few voters have the patience to wait five or ten years for radical free-market reforms to have a positive impact, and Argentina’s president only serves a four-year term before facing the electorate again.
Legislative opposition
A further obstacle to Milei’s reforms is that he will not be the philosopher-king of every libertarian’s dreams. He will not be a dictator.
He will simply be the head of the executive in a constitutional parliamentary democracy, with strictly circumscribed powers.
And the elections did not result in a similar landslide in the legislature.
Argentina has a 72-seat Senate, or upper house, and a 257-seat Chamber of Deputies, or lower house. Together, they make up the Argentinian National Congress.
In both houses, Milei’s libertarian coalition, Liberty Advances (La Libertad Avanza, or LLA) took more seats from the conservative coalition, Together for Change (Juntos por el Cambio, or JxC), than from the socialist Peronista coalition, Union for the Homeland (Unión por la Patria, or UxP).
In the Senate, this leaves the Peronistas as the largest coalition, with 32 seats. It would need 37 seats to command an outright majority. The conservative coalition, JxC, retains only 27 seats. As the third-largest party in the Senate, Milei’s LLA only has six seats, which even in coalition with the conservatives is not enough for an outright majority.
In the lower house, the picture is similar. UxP has 104 out of 257 seats, JxC has 93, and LLA has 38. The only difference is that here, a JxC and LLA coalition can command a simple majority.
This leaves Milei at the mercy first of the conservatives, who would welcome market-oriented reforms and a departure from socialism, but by their very nature would be reluctant to endorse Milei’s more radical, disruptive proposals. Once Milei has cleared that hurdle, he needs to gather a majority in the upper house, which will be even harder.
Argentina is also heavily indebted, including to the International Monetary Fund, and creditors are likely to have a say in how the country is run. Anything that scares them will raise the cost of credit, which Argentina can ill afford.
Wait and see
Once the initial euphoria of seeing a true libertarian in power has cleared, then, we are left with the sobering realisation that Milei may not be able to achieve anywhere near as much as he has promised.
Turning failing countries around is not for the faint-hearted, and it always comes with social upheaval and economic pain.
Even if Milei gets the good ship Argentina pointed in the right direction again, the prevailing winds and currents may still dash it – and its captain – upon the rocks.
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