Javier Milei

Zach Weissmueller | 12.5.2024 2:30 PM

Argentina elected the first self-identified libertarian president in history. Is he a madman? Or a savior?

Can his libertarian ideas transform Argentina into a beacon of prosperity? Reason visited Argentina to find out if Javier Milei's reforms are working.

On the ground in Buenos Aires six months after Milei took office, a massive protest filled the public squares and streets outside the national legislature and presidential palace. Congress was voting on a reform package that would deliver on part of his agenda.

Nearly one in three Argentinian workers belong to a union, and organized labor holds tremendous political power and the ability to mobilize large protests like the one we witnessed opposing Milei's reform package. Participants say Milei's agenda helps the rich and handicaps the poor.

"None of what's happening [with the law] serves the interests of the people," says Sylvia Saravia, national coordinator for a left-wing populist political party present at the protest called Free Movement of the South, which opposed Milei. "For example, fiscal reforms that benefit the rich and hurt the poor."

If Milei gets his way, unions will be crippled by the time he leaves office. He wants to privatize sectors like the airline industry, which is dominated by organized labor, and to end the mandatory deduction of union dues. That would mean workers would have to actively choose to hand over part of their salaries to these groups.

"What [Milei] is doing is destroying science, destroying technology, destroying public education," says Saravia.

Protesters waved Marxist hammer-and-sickle flags and pictures of Che Guevara, the communist icon. Che was the ideological brains behind the Cuban revolution—but he was born here in Argentina.

"We stand with Che and everything he fought for," says Daniel Aguirre, a protester with the Argentine Rebel Movement, a Marxist political group. "We must share the wealth. It shouldn't be concentrated in the hands of the few."

Argentina was never communist, but the government has played an outsized role in the economy since the end of World War II. Protestors regularly take to the streets to defend the status quo against Milei's agenda—but that status quo has brought the country to the brink of ruin.

Argentina faced 25 percent monthly inflation when Milei took office because the government was printing money to pay for things it couldn't afford. As a result, roughly half of the people in this country of nearly 50 million were living in poverty.

Milei blames Argentina's downfall on "la casta," which essentially means the "elite political class."

As the protest grew in front of the legislature and presidential palace, across town a different-looking crowd was gathering to hear Milei speak. At the luxurious Hilton Hotel, it was the final day of a conference cohosted by two libertarian think tanks, Argentina's Fundación Libertad y Progreso and the Washington, D.C.-based Cato Institute.

"After repeated failures, we've forgotten that economic freedom brings prosperity," Milei told the crowd.

Ian Vásquez, Cato's vice president of international studies, who brought Milei to the stage, says that Argentina was once a "classically liberal country."

"So [Milei] draws on those traditions to make his case and overturn 80 years of statism," says Vásquez.

Nineteenth-century Argentina was never anything close to a libertarian utopia—it had a large government under the sway of wealthy landowners. But thanks to its 1853 constitution, which was modeled after the U.S. founding document, it became a more or less a laissez faire democracy.

Tellingly, about 6.6 million European immigrants migrated to Argentina in the late 19th and early 20th centuries, seeking economic opportunity and refuge from war. They coined the phrase "rich as an Argentine."

The economy grew by 7 percent a year before World War I—faster than that of the U.S., Australia, and most of Europe.

Buenos Aires' historic buildings hint at the nation's former grandeur. Now, many are decrepit and in need of updating. Milei wants to reverse the century of decline and restore Argentina to its former glory.

"The history of the last 100 years of our homeland was a warning," Milei told the conference attendees. "It's a small window into what can happen in the free world if you let down your guard and let yourself be seduced by socialism.…Guys, I'm a libertarian. I'm not going to do that kind of crap. I believe in freedom. I don't believe that politicians are gods."

Vásquez describes Milei as having "become an international leader at a time when so many countries are going in the other direction," one whose influence extends far beyond Argentina. Elon Musk beamed in as the warm-up act for Milei. During his first six months in office, Milei, the first Argentine president to become an international celebrity, spent significant time in the U.S. meeting with business leaders.

Milei, an academic economist, made tackling the monthly double-digit inflation and spiraling deficits left behind by his predecessors the central theme of his speech at the conference.

"We were facing what was going to be the worst crisis in all of Argentine history," says Milei.

Since he took office, Argentina's inflation has dropped to under 4 percent per month, which is still dreadful but also a spectacular improvement. His spending cuts led to the first budget surpluses in more than a decade. And while the economy was shrinking for six months prior to his election, six months into his term, economic activity increased year over year, despite predictions to the contrary.

Milei eliminated stringent regulations on rental contracts, and the supply of available apartments in Buenos Aires roughly doubled.

"Nobody expected the turnaround that much," says Vásquez. "We always knew that this policy change, and especially this thoroughgoing libertarian reform agenda in Argentina, was going to be a titanic task. I mean, the Peronists are still in Congress."

What Milei calls "la casta" has its origins in the post–World War II era, when President Juan Perón built vast patronage networks and gave political interest groups outsized influence over the economy. Perón was inspired by the orderliness imposed on society by the Italian fascist dictator Benito Mussolini, whom he once called "the greatest man of our century."

The Eva Perón Foundation, named after the first lady who is still a cultural icon, displaced the Catholic Church as the main provider of Argentina's social safety net, funding its so-called social justice mission largely through state subsidies, union dues, and big business shakedowns.

The song "And the Money Kept Rolling In" from the musical Evita offers a critical take on Peronism. As the money rolled in, it came with a heavy........

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