If you know nothing else about Argentina’s new president, Javier Milei, you probably know two things: He has weird hair, and he’s a self-described anarcho-capitalist who believes the government should have as little role in society as possible.
Milei, who was sworn into office a week ago, has been in the public eye in Argentina for over a decade as a bombastic libertarian television fixture, dressing up in bizarre costumes and blasting the political elite. He has no real governing experience, save for a mostly absentee term in the lower house of Argentina’s parliament. While his appeal to Argentines battling triple-digit inflation makes some sense when looking at Argentina’s economic history and political dysfunction, whether it means the country will correct course or be consumed by chaos remains to be seen.
Milei took a chainsaw with him to rallies and campaign stops, revving it as a symbol of what he would do to Argentina’s government if elected. And a week into his tenure, he’s already cut nine of 18 government ministries, and promised to stop new infrastructure projects, lay off newly hired government workers, cut transit and energy subsidies, and reduce payments to Argentina’s provinces, the New York Times reported. That, he and his ministers say, will cut Argentina’s unsustainable deficit — hopefully encouraging more foreign investment and pleasing the International Monetary Fund (IMF), which has loaned the country some $44 billion it’s currently unable to repay.
“I welcome the decisive measures announced by President @JMilei and his economic team today to address Argentina’s significant economic challenges—an important step toward restoring stability and rebuilding the country’s economic potential,” Kristalina Georgieva, the head of the IMF, posted on X Monday.
Milei’s economic plans, he has told Argentines, will be extremely painful in the short term, especially in a nation where some 40 percent of people live below the poverty line, and many depend heavily on government assistance to get by. But whether he can actually make those plans a reality is another question; his party, La Libertad Avanza, holds a minority of seats in the parliament, and Milei’s ability to compromise and form a consensus is unproven. That could prove a serious impediment to implementing his policies, possibly driving the country into even more chaos.
Though the focus is on Argentina’s economic problems, it’s important to consider that Milei’s economics — like all economics — are ideological. And while a large part of Milei’s ideology is centered on economics, that’s not all that he’s promising.
Argentina’s past is key to understanding its present problems
Milei is the son of a bus driver-turned-entrepreneur and a homemaker. Raised in Buenos Aires, he played soccer and sang in a Rolling Stones cover band as a kid. But growing up in the 1980s, during a period of hyperinflation and debt crisis similar to what Argentina faces today, influenced him to study economics at the University of Belgrano, and later the Institute of Economic and Social Development and Torcuato Di Tella University. While there, he learned about libertarian economics and the ideas of Murray Rothbard, who articulated the political and economic theory of anarcho-capitalism, and Ludwig von Mises and Friedrich Hayek, pioneers of libertarian economics.
“If you mix Milton Friedman, Robert Lucas, also from [the Chicago school of economic theory], [Friedrich] Hayek, the Austrian economist, you will have Javier Milei,” Pablo Schiaffino, a professor of economics at Torcuato Di Tella University in Buenos Aires and personal friend of Milei, told Vox. Milei is so devoted to his economic heroes that he’s named some of his cloned English mastiffs after them. (He also claims that Conan, his original mastiff dog from whom the others were cloned and who died in 2017, contacted him via a medium and told him to run for president, Reuters reported.)
“Most of his ideas come from the fact that, first of all, you need a free market economy. In his mind, everything starts with economics, then comes the politics, then comes the society,” Schiaffino said.
To understand Milei and his appeal, it’s important to understand Argentina and its economic and political history. As Vox’s Emily Stewart wrote in March:
Argentina’s economy has been troubled for decades, its history punctuated by various episodes of crises, of hyperinflation, of booms and busts. There was a brief moment of relative calm in the 1990s, but it ended in deep recession and skyrocketing poverty. “Since the ’60s and ’70s, Argentines’ confidence in their currency and their economic institutions has been eroding,” said Roy Hora, an Argentine historian. “What Argentines have done is to adapt to that scenario.”
Politically, Argentina has primarily been governed by Peronists, a hard-to-define ideology named after Juan Perón, the longtime president of Argentina who, along with his wife Eva, instituted a strong social welfare state oriented toward the working-class. Peronists, represented currently by the Justicialist Party, are still quite politically powerful, particularly in the trade unions and political classes, but Milei’s tenure will be one of the very few times — barring periods of brutal military dictatorship — that a Peronist will not be in power.
Peronism has brought about insular economic policies, which has resulted in Argentina’s current lack of liquid foreign assets, Schiaffino explained. Without foreign currency, the country can’t participate in the global economy and can’t pay off foreign debts. And without creditworthiness, it can’t take on more debt.
None of this — the deficit, credit crisis, and exploding inflation — is new in Argentina, Gregory Makoff, senior fellow at the Mossavar-Rahmani Center for Business and Government at the Harvard Kennedy School, told Vox. And that’s what Milei is responding to.
[“Milei] is Argentine. He’s an Argentine media character. And what he’s doing is very domestic,” he said. “He is coming out of the collapse of a fiscal political economic system, and saying things that are relevant and come from the history of the country and its failures. And he’s saying, I understand our failures, and I’m going to fix our failures. It’s why he’s resonating, because he’s speaking to Argentines about their lived experience.”
That primarily comes through in his framing of his economic policy as an antidote to inflation, which is about 140 percent in Argentina.
“We’re totally dedicated to ending inflation, hyperinflation,” he said in a social media address this week. “That’s why we came up with a super orthodox program to end the fiscal deficit and bring the financial deficit to zero.”
Can he get this stuff done? And can it actually fix Argentina’s economy?
Already, a crucial part of Milei’s campaign promise has come into doubt — his plan to defeat inflation by replacing the peso with the US dollar and shutter the central bank. That would mean the government could no longer demand the central bank print more money so the government can make purchases, a key source of the present overwhelming inflation.
But the lack of reserves hasn’t kept politicians from overspending in the past, so it’s not clear how dollarization would change that pattern, as the Economist pointed out. Furthermore, it’s an expensive prospect; it could cost some $40 billion, according to estimates by his own team. For a country that’s $44 billion in debt to the IMF, it’s not clear where that money would come from.
Luis Caputo, Milei’s finance minister, has not mentioned the plan thus far in his economic announcements and has reportedly said in private that the plan is dead.
Milei has apparently moderated some of his more extreme proposals, including payments to donors to solve the problem of insufficient organ donations and cutting ties with China, one of Argentina’s largest trading partners. Though some observers are relieved, the Financial Times reported Saturday, his more sober attitudes and policies could be a disappointment to the people who voted for him.
“His support is very ephemeral and very volatile. Voters made a bet on him but that bet has an expiry date,” Alfredo Serrano, the head of left-leaning think tank Centro Estratégico Latinoamericano de Geopolítica, told the Financial Times.
And though he may be able to form a coalition with other right-wing parties, there’s no guarantee that Milei will be able to push through all of his reforms, given that his party has so few seats in the parliament. Even if his economic plans were sound, Argentina’s political infighting and dysfunction could keep Milei’s government from making a coherent plan and seeing it through.
“For me, it’s much more the person plus the political context — whether they can get anything done,” Makoff said.
Though by far the biggest issue Milei needs to address is the economy, it’s important to remember he has policy ideas and ideological positions on other issues, too — specifically, the right to an abortion, hard-won by Argentina’s newly galvanized feminist movement in 2020.
“For sure, Milei is not the first populist leader-elect to seek abortion restrictions within a broader agenda of opposing sexual and reproductive rights,” Camilla Reuterswärd, assistant professor of political science at Uppsala University, and Cora Fernandez Anderson, chair of the politics department at Mount Holyoke College, wrote in a blog post for the European Consortium for Political Research. “His views largely follow the anti-gender blueprint of most right-wing populist leaders.”
Milei, whose supporters are mostly men, Reuterswärd and Fernandez Anderson point out, has expressed interest in holding a referendum on the 2020 law, which allows abortions before 14 weeks.
Milei’s security minister and former political rival Patricia Bullrich has also announced the decision to crack down on protests using force and arrests following the announcements of economic reforms. “Let them know that if the streets are taken, there will be consequences,” she said at a press conference last week.
There’s no question that Argentina’s economy is in a dire situation. And though Argentines voted for Milei’s promises to fix it, there’s no guarantee that his plans will work, or that the government will even be able to see it through.