Newsline , Society

Argentina’s Rising Populist Rock Star

Posted on Wednesday, August 16, 2023
by Daniel Berman

AMAC Exclusive – By Daniel Roman

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Voters in Argentina went to the polls for primary elections this past weekend, and while the major alliances will face each other once more in the fall to select their next president, vice president, and members of the National Congress, the primary results nevertheless represented an earthquake.

The long-dominant left-wing Peronists managed a mere 27 percent of the vote, slightly behind the traditional center-right opposition with 28 percent. Leading the field, however, with 31 percent of the vote was Javier Gerardo Milei, a businessman and member of the lower house of the Argentine National Congress who describes himself as an “anarcho-capitalist.”

The leader of the conservative La Libertad Avanza coalition, Milei has spoken out against “cultural Marxism,” is pro-life, and favors private firearm ownership. His self-professed political heroes include former Brazilian President Jair Bolsonaro and U.S. President Donald Trump.

However, Milei is far from a traditional strait-laced conservative. Sporting hair that he brags about never combing and an advocate of free love who once played in a rock band, he makes an unusual candidate for a right-wing savior.

But given the country’s dire economic issues, Milei’s outsider approach may be just what is needed. Argentina is perhaps the most statist country in Latin America, where the government’s role in the economy is taken for granted. Argentina’s economy, however, is predicted to shrink by 3.5 percent this year, and while inflation has come down from recent highs, it is still set to clock in at a mind-boggling 114 percent in 2023.

Yet what makes the situation in Argentina somewhat unique is that voters blame the entire political system, not just the government, for Argentina’s problems – problems which are far from new.

In 1923, the average Argentine was richer than the average Frenchman. Today, Argentines earn less than the median Bulgarian or Greek. Unlike their Greek or Bulgarian counterparts, however, they lack the excuse of a German occupation, or decades of Soviet rule.

Today, public anger is focused on the administration of President Alberto Fernandez, who is seen as a puppet of his vice president, Cristina Fernandez Kirchner, who, along with her former husband, Nestor, dominated Argentina for 16 of the last 20 years. Kirchnerism has come to be considered its own ideology in Argentine politics, absorbing the more traditional Peronism.

Kirchnerism is merely the latest manifestation of Peronism, the non-ideology which dominated Argentine politics after Juan Peron was swept to power on October 14, 1945. Efforts have been made to define Juan Peron as a fascist, or to place Kirchnerism in the same boat with the leftist “Pink Tide” which produced Evo Morales in Bolivia, Hugo Chavez in Venezuela, and most recently Gustavo Petro in Columbia.

But this misses the point. Peronism is not really an ideology so much as a theory of government. The never-ending cycle of boom and economic collapse Argentina has experienced since 1945 is not a bug in the system but its primary feature, as it ensures that Peronism will rule except during the deepest of busts.

Traditionally, the Left believes in redividing the pie, and the Right in growing it. Peronism, by contrast, believes in mortgaging the pie, using the proceeds to pretend it is bigger, and then to default when the debt becomes unsustainable.

It would be too generous to suggest Juan Peron, much less his successors, had a coherent vision for building the Argentine economy. They were not economists, but political bosses, and their vision was for using the economy to build a political machine. The result was that Peronism gave money to everyone – provided they were a Peronist. This included small farmers, unions, industries, and local governments. The focus was not just on the poor or workers, but on the middle class as well, with Argentine governments subsidizing luxury imports from abroad.

On an economic level, these policies often conflicted. What was the point of subsidizing domestic manufacturing of machine parts in the 1950s or electronics today if the government also subsidizes the import of competing foreign goods? As the lyrics in the song The Money Kept Rolling In from Evita say, “That is not the point my friend.” The point was to create the illusion of growth and prosperity, rather than invest in the tradeoffs required to achieve that growth and prosperity in reality.

Peronism had several forms, but they all amounted to the same sleight of hand. Peron went for direct subsidization during his tenure. Carlos Menem, heralded as a more free market-oriented reformer, pegged the Argentine Peso to the U.S. dollar in the 1990s, which allowed him to adopt the same policy of subsidizing imports, but in the Wall Street Journal-friendly guise of “stabilizing the currency” and “increasing consumer spending power.” When the Argentine government predictably ran out of dollars with which to inflate the Peso in 2001 and the country fell into crisis, with five presidents in that many weeks, the country had the chance for a reset.

Instead, it got the Kirchners. Nestor Kirchner was elected on a platform of ending the austerity agreed to with the International Monetary Fund, arguing that Argentina could spend its way to recovery. The result was regular currency crises, which had the unexpected benefit of weakening the classes opposed to the Kirchners.

Cristina Kirchner especially has flirted with anti-American leftists, arguing that Argentina should join the BRICS coalition and wooing an uninterested Beijing with the prospect (certainly horrifying for the Chinese Central Bank) that Argentina could adopt the Chinese renminbi.

What of the opposition? Ronald Reagan once said that the problem with socialism was that eventually you always ran out of other people’s money. The dilemma for the foes of Peronism since 1945, when Juan and Evita first swept to power, has been that Peronism tends to be very popular until it runs out of other people’s money. Consequently, the foes of Peronism have only come to power when the money has run out. As they slowly rebuild the economy, Peronists reappear, making the argument that there is once more enough money to be spent to make everyone rich.

The most recent center-right government from 2015 to 2019 followed this pattern.

What, then, makes Milei different? He is the son of a bus driver in a system based on familial dynasties. Patricia Bullrich, the center-right candidate, is a direct descendent of one of Argentina’s first presidents and the Mayor of Buenos Aires at the turn of the century. His Peronist foe was Kirchner’s chief of staff and was brought into politics when he married into the then-first family in the 1990s. Both were professional politicians who, despite their current differences, started out within the Peronist youth organization.

By contrast, Milei is new to politics. After receiving three degrees in economics, he worked for HSBC Bank and a series of private hedge funds before serving as an advisor to the World Economic Forum. As a professor of economics, Milei has become an outspoken critic of Keynesian economics and a defender of the monetary theories of the Austrian School. He sees Argentina’s current situation as remarkably similar to that of Britain when Margaret Thatcher came to office.

As an outsider, Milei has been able to argue that the system itself is the problem. Margaret Thatcher, when she became British Prime Minister, quickly realized that the problem was not just that the government was spending too much money. The problem was that the government was spending too much money because unions and entrenched interest groups were more powerful than the government and therefore able to extort money. Thatcher grasped that it was impossible to reform the British economy merely by changing economic policy. The political power of the unions would have to be smashed.

Milei has identified the wider Argentine political culture where voters look to local political machines not just for benefits, but jobs or projects, as one where it is impossible for any party or politician, Peronist or otherwise, to enact reforms without destroying the basis of their support. Even liberalizing regulations for companies would mean businessmen are no longer dependent on staying on the right side of local politicians and might do the unthinkable – donate to opposing candidates. Reducing the size of the bureaucracy would reduce patronage opportunities.

Milei’s proposals, then, involve not a shift in economic policy or reductions in government spending but destroying the basis of Argentina’s parasitical economic system. Milei’s support for abolishing the Argentine Central Bank and allowing the use of foreign currency along with crypto is not mere ideology. It is an effort to remove a tool of control regularly abused by governments. Privatizing the state sector and allowing school vouchers may improve efficiency. It would be hard to make things less efficient. But the true benefit will be to remove them from beyond the patronage of corrupt local bosses.

This explains the hostility the libertarian Milei, who has no personal objection to same-sex unions, displays toward cultural Marxism and even abortion. For Milei, cultural Marxism represents the latest evolution in the culture of dependency that has reduced the Argentine people to the level of serfs. It has provided a method for university and school administrators to purge dissidents while creating additional patronage positions and teaches Argentina that only the government can protect them from each other.

Gender ideology, in Milei’s view, is an assertion of governmental power to define reality, and the acceptance of it by the center-right opposition implies an acceptance of the Peronist view of society. Maybe Bullrich will seek to run the system better, but she nevertheless aspires to preside over the same feudal system.

Milei’s proposed changes are radical, especially for a population used to being told that nothing is their fault and the government will take care of everything. But with 114 percent inflation, some seem to be questioning why they are no better off now than a century ago.

Milei has yet to win. The primary is just a preliminary election where the candidates for each of the alliances run together. However, he appears to be in the driver’s seat. Argentine presidential elections require a candidate to receive 45 percent of the vote or lead their nearest opponent by 10 percent. If they do not, a runoff is held among the top two finishers.

It seems unlikely many center-right voters would cast their ballots for a Peronist over Milei, who is much closer to them ideologically. At the same time, many Peronist voters, unlike left-wing ones in the United States and Europe, are populist. The provincial Peronist machines have been fighting those of the center-right parties for decades. Backing Milei will likely provide a greater prospect of change for Peronist voters, and of bargaining power for Peronist bosses.

In any event, Argentine voters this fall will now have the chance to break out of a century-long doldrum. It is time to stop crying for Argentina and to start praying for someone who can revive it.

Daniel Berman is a frequent commentator and lecturer on foreign policy and political affairs, both nationally and internationally. He holds a Ph.D. in International Relations from the London School of Economics. He also writes as Daniel Roman. 

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10 months ago

Melei has the right ideas to turn around a badly broken country and restore some semblance of economic growth and prosperity to the nation, but he will face the same Peronist controlled legislature that has doomed ever other reformer that has come before him. Just like his predecessors, who also had the right policy ideas to put Argentina back onto a low inflation, higher economic growth path, the socialist dominated legislature will support and pass none of it.

When Argentina foolishly elected Juan Peron, an ardent socialist as President many decades ago, the people of Argentina essentially committed economic and thus national suicide. If the people of Argentina truly want the reforms Melei is promising, then they also have to oust, by whatever means at their disposal, most of the members of the legislature at the same time and replace them with like-minded people who will support Melei’s vision for Argentina’s future. Otherwise, even if Melei wins the election, none of his proposed reforms will ever be enacted.

10 months ago

I pay only cursory attention to foreign politics, but this was interesting, historically. I hope Milei wins the election and can transform the cesspool, but he will face the same headwinds as Trump, I’m sure.

10 months ago

Its fun to watch but once people get used to and expect their govt to steal for them, they lose their taste for freedom. A majority of humans are all too willing to trade their liberty for subsidized food, housing and medical care. The socialist idea is like a perfect virus in that a large segment of the populace will vote for it. Once ruined there’s no way to go back to being un ruined. But maybe there are miracles.

8 months ago

Well, they Peron’d bigger and harder, and it saw them through the first round.

10 months ago

He’s a member of the WEF. I don’t trust him for that very reason.

Poor fellow
Poor fellow
10 months ago

“Ronald Reagan once said”

Ronnie doesn’t say much these days. Must have been the stoke lol

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