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June 21, 2024
Economic neoliberals have utilized the ammunition of failed government intervention in the economies of countries like Venezuela; however, now, with the rise of Javier Milei in Argentina, progressives advocating for greater government intervention in the economy will need to watch closely and see if they can use Argentina as a counterexample, should Milei fail to turn around the nation’s economy.
Milei, a former professor of macroeconomics, won the 2023 Argentine presidential election with 55.65% of the vote. His campaign gained notoriety for his extreme antics, such as holding a chainsaw in front of his crowd of supporters to indicate his plans to destroy big government and excessive government expenditures in Argentina. Milei won during a time when Argentina was suffering from very high inflation, which peaked in December (just as Milei took office), with a massive monthly inflation rate of 25%, according to Reuters’ Miguel Lo Bianco.
Already, inflation has declined rapidly, with Lo Bianco reporting that May saw the monthly rate fall to 4.2%. Robert Plummer of BBC describes that the significant decline in inflation has coincided with some months of budget surplus, in sharp contrast to the deficit the government had been running before Milei assumed the presidency. In order to get there, Milei “…slashed state subsidies for fuel, and cut the number of government ministries by half,” as Plummer points out.
Milei, because of his confident libertarian economic philosophy, is the recipient of great praise from prominent figures worldwide, including Elon Musk. Musk recently posted a photo with Milei in which both men are holding their thumbs up. The billionaire subsequently advocated, “I recommend investing in Argentina.” Milei’s supporters reach well beyond Musk, however. Milei recently spoke at Stanford University’s Hoover Institution. He received great applause, ending his speech with optimism that the future will prove better than the present, “… and it will be much better if we remove the state from our lives.”
Milei still has much work to do in shaping Argentina with his vision, and it is unclear how long Argentine citizens will endure the pain imposed by Milei’s radical moves. Al Jazeera notes that when the Argentine Senate recently passed more economic reforms aimed at privatizing state-owned businesses and encouraging investment in the country, “… thousands of protestors poured into the streets, burning cars and throwing Molotov cocktails as hundreds of federal security forces pushed back with rounds of tear gas and water cannon.”
Javier Milei’s presidency calls for close monitoring by both those who support and oppose the macroeconomic policies he preaches. Ultimately, Milei’s Argentina could become economic neoliberals’ most prized example of success from their methods, or it could become a dreaded failure raised by opponents seeking to discredit the economic philosophy. Watching and waiting as the economic and political situation develops in Argentina is likely the only choice both Milei supporters and opponents have.
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