At the heart of Buenos Aires lies the lovely Calle Florida. The experience of walking through this street that is exclusively dedicated to pedestrians was anything but lovely though, since in the one kilometer from one end to the other I was besieged—albeit politely–by some 200 men and women barking, “cambio, cambio,” competing to give me the most pesos for my dollars.

It’s a seller’s market, with the “Benjamins”–$100 notes—especially valued. When I began my walk at one end of the street, I was offered 1,100 pesos to the dollar; by the time I reached the other end, the offer had climbed up to 1,400. The online price that morning was 963 pesos. I thought I had a good deal, but an Argentine friend later told me I could have done better.

The daily depreciation of the peso relative to the dollar is a key indicator of inflation, which everyone says is the country’s prime economic problem. The conventional analysis is that the uncontrolled rise of prices stems from the government’s equally uncontrolled printing of pesos to cover its budget deficit. Thus, the peso has lost its function as a store of value, forcing people to resort to the black market for dollars. With the private sector hoarding dollars and international creditors hesitant to lend, owing to Argentina’s having defaulted on its $323 billion sovereign foreign debt in 2020, tourists have become a prime source of dollars for ordinary Argentines and small- and medium-sized enterprises.

The inflation rate for 2023 was over 211 percent. This was not in the order of the 3,000 percent annual inflation rate in 1989 and 1990, but as in that earlier period, inflation has resulted in the coming to power of regimes touting radical stabilization policies. In the 1990s, Carlos Menem, the populist Peronist turned neoliberal, famously imposed, among other stringent measures, the one-to-one peso-to-the-dollar exchange rate. The experiment led to chaos, with the country declaring itself unable to service its sovereign debt in 2001.

Last November came the turn of the self-described “anarcho-capitalist” Javier Milei, who has promised not only to make the dollar the medium of exchange in place of the debauched peso but to also lop off whole ministries of government and thousands of government jobs. His controversial but winning image during the November 2023 elections was his going around with a chainsaw to symbolize his determination to radically slim down government, which he regards as a “criminal operation.”

The question on everyone’s mind is, will Milei succeed where previous regimes failed?

Milei has been in office for less than a year, but he has taken his chainsaw to the government, as he promised. He chopped off half of the government ministries, devalued the peso by 50 percent, and slashed fuel subsidies. That was just the beginning. In the teeth of bitter opposition in Congress and in the streets, he got his “Bases Law” passed, which would allow him to roll back workers’ rights, provide tax incentives to foreign investors in extractive industries such as mining, forestry, and energy, reduce the tax burden on the rich, and provide him with the power to declare a one-year state of economic emergency with special powers to disband federal agencies and sell off about a dozen public companies. In order to get the Bases Law through Congress, Milei has postponed his plans to adopt the dollar as the national medium of exchange and “blow up” the Central Bank, as he puts it, deliberately invoking an image associated with Khmer Rouge’s destruction of the Central Bank of Cambodia when they came to power in the late 1970s.

As anticipated, the austerity measures are leading to the contraction of the economy, with the International Monetary Fund, which has signalled its........

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