Javier Milei has been elected president of Argentina with a result that many people did not expect. He secured 55.95% of the vote, compared to 44% for his left-wing challenger, the Minister of Economy Sergio Massa.
This is the first time that a self-described “anarcho-capitalist” has been elected president of a country, although Milei’s views have much in common with those of Ronald Reagan and Margaret Thatcher. Both leaders implemented programmes built on tax cuts, privatisation and deregulation to reform the US and UK in the 1980s.
For me, Milei’s election victory was no surprise. I have studied the libertarian movement in 30 countries over the last two years, but never have I encountered such a strong libertarian movement as in Argentina. I first heard about Milei when he explained in a newspaper interview that he was reading the Spanish edition of my book The Power of Capitalism. Last year I was in Argentina and spoke to representatives of his movement.
Normally, when their country is in a serious crisis, large numbers of people tend to gravitate to the far Left or far Right of the political spectrum, but in Argentina libertarians are the beacons of hope, especially for young people. Among voters under the age of 30, a majority voted for Milei in the first round, where he achieved only 30 percent of the vote.
The elections took place against the backdrop of a dramatic economic crisis and an inflation rate of over 100 percent, one of the highest in the world. Argentina has been run down by statists for decades and is now one of the most economically unfree countries in the world. In the Heritage Foundation’s 2023 Index of Economic Freedom, Argentina ranks 144th out of 177 countries. Even in Latin America, only a few countries (first and foremost Venezuela) are less economically free than Argentina. For comparison: Chile, although its position has worsened since the socialist Gabriel Boric came to power in March 2022, is still the 22nd most economically free country in the world and Uruguay is 27th (the United States is 25th).
But as far as popular opinion in Argentina is concerned, many Argentines have simply had enough of left-wing Peronism and are turning away from the statism that has dominated their country for decades. In a survey I conducted last year, Argentina was among the group of countries in which people were most supportive of the market economy. From April 12 to 20, 2022, I commissioned the opinion research institute Ipsos MORI to survey a representative sample of 1,000 Argentines on their attitudes toward the market economy and capitalism. The survey was also conducted in another 33 countries in Europe, Asia, the United States, Africa and Latin America. The result: In only 5 out of 34 countries (Poland, the United States, the Czech Republic, South Korea and Japan) is there even greater support for the market economy (see Figure 1: https://onlinelibrary.wiley.com/doi/full/10.1111/ecaf.12591)
This explains why an avowed fan of capitalism such as Javier Milei, Professor of Austrian Economics, has a chance of winning the elections in the country. Milei entered the election campaign calling for the abolition of Argentina’s central bank and for free competition between currencies, which would probably lead to the US dollar becoming the most popular means of payment. He also called for the privatisation of state-owned companies, the elimination of numerous subsidies, a reduction in taxes or the abolition of 90 percent of taxes and radical labour law reforms.
It will be interesting to see whether Argentines have enough patience for the urgently needed capitalist reforms that Milei has announced. After all, wherever capitalist reforms have been implemented, the situation has initially deteriorated before getting much better. This is because problems that were previously partially hidden (such as hidden unemployment) suddenly become obvious.
This was the case with Margaret Thatcher’s reforms in the UK, Ronald Reagan’s in the United States and Leszek Balcerowicz’s in Poland. All three admired the same economists that Milei holds in such great esteem, such as Friedrich August von Hayek and Ludwig von Mises. The reforms of these three politicians in the UK, United States and Poland dramatically improved the lives of the people in their countries, but only after conditions initially got worse. Hopefully Argentina, which has been so badly mismanaged over the last 100 years, is now going to get the fresh start it deserves.
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