By: Joseph Schneider
Edited By: Alexandra Huggins
On November 19th, the world took note of a seismic shift in Argentine politics. After a bitterly fought election, Argentine voters chose libertarian economist Javier Milei as their next president in the second round of the presidential election. They did so by the largest margin ever recorded since the return of democracy in 1983, with more than 55% of all votes. However, although Mr. Milei’s victory over Sergio Massa was impressive, this was not the main shift. What represented a shift in Argentine politics even more than Mr. Milei’s victory was the repudiation of Peronism, the country’s main political current since 1946.
To understand the implications of this event, we must bear in mind that, except for a brief period in the 1990s under Presidents Carlos Menem and Fernando de la Rúa, questioning the tenets of Peronism was anathema in Argentina despite the presence of right-wing military dictatorships and center to center-right democratic governments headed by the Radical Civic Union. Peronism helped develop the dependency theory that took Argentina away from free trade and towards a protectionism so extreme that exports were even discouraged through tariffs to suppress the exit of valuable agricultural produce instead of being encouraged through subsidies. Peronism also created widespread patronage networks and implemented social spending programs that are unrivaled almost anywhere in Latin America in terms of scale. These policies, sometimes applied separately and sometimes applied in tandem, have led to several balance of payments and inflation crises that increased in intensity starting in the late 1980s. Now, with an annual inflation rate of around 140%, a currency continuously decreasing in value, a poverty rate of roughly 40%, and many corruption scandals, Argentines are hungry for a change.
Mr. Milei is seemingly willing to fulfill that desire. During the campaign, Argentina’s newly sworn president brandished a chainsaw to symbolize substantial cuts to public spending and a reduction in the number of government ministries. Regarding monetary policy, he promised to “dynamite” the central bank and to replace a peso “not even useful as fertilizer” with the US dollar. Mr. Milei even went as far as to propose a voucher system in education, to declare his openness to legalizing the sale of human organs, and to propose severing diplomatic (but not commercial) relations with China and Brazil. The fact that Mr. Milei remained more or less consistent during the campaign is extraordinary, given his many eccentricities, which include conferring with his dead mastiff — which he had cloned into five puppies —, overly relying on his sister, practicing as a professor of tantric sex, and having his theme song based around a lion roaring in the middle of the avenue.
However, whether Mr. Milei will be able to implement all his proposals once he is invested on December 10 remains to be seen. So far, he has been able to slash the number of ministries and even warned Argentines about a shock therapy so intense that would last from “18 to 24 months.” However, Mr. Milei faces a precarious political position. It is possible that Argentina’s Peronist-dominated trade unions could succeed at derailing some of his proposals by imposing pressure on the streets. However, the main problem for Mr. Milei is that his party, Freedom Advances, lacks a majority in both the Chamber of Deputies and the Senate. Therefore, Argentina’s newly sworn president has begun to strike agreements with the Pro, a center-right political force dominated by failed presidential contender Patricia Bullrich and former president Mauricio Macri, with the remnants of the Radical Civic Union and smaller regional parties. This is why Mr. Milei has been deferential to other right-wing forces, backtracked on severing relations with Brazil, and even invited President Lula da Silva to his inauguration. For these reasons, only time will tell whether Javier Milei will succeed in transforming Argentina. Nevertheless, there are two certainties. The first certainty is that the days following December 10 will be interesting. The second one is that Argentina will never be the same again.