Wolverine meets Milton Friedman
Will Argentina’s new president offer a blueprint for reining in unsustainable spending?
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Argentina’s newly elected president, Javier Milei, triumphed with 56 percent of the vote in his nation’s electoral contest. He is, to put it mildly, unique. Milei is an economist, soccer player, and member of a rock band who entered his nation’s Congress and then rapidly ascended to its presidency. He is a self-described “anarcho-capitalist,” which is to say he believes a free economy can do almost everything with minimal interference from the government.
The 53-year-old president has a bizarre hairstyle he refers to as being shaped by “the invisible hand” of Adam Smith. The hair is accompanied by sideburns often described as being in the style of Wolverine, the character played by Hugh Jackman in the popular X-Men film series. Piercing blue eyes gaze out from under the untamed mane. In a very real sense, he is not far from being a comic book character himself, as he lives with five English mastiffs—the original and four clones. Together, his four-legged family weighs close to half a ton. One of them is named Milton, almost certainly a nod to the American free-market economist Milton Friedman, author of Capitalism and Freedom.
When Americans hear or read the name of Argentina, we tend to have thoughts of Juan and Evita Peron. Peron, even now many decades after his time leading the nation, continues to provide a frame for Argentina’s politics. Peron was a dominant political figure who, in his later years in power, brought a strong left-wing cast to the politics of his country. Those policies led in large part to the economic struggles that have beset the people for decades. During the past quarter century, Argentina has become one of the world’s financial basket cases, a mascot for profligate fiscal policy.
Milei haș proposed a radical change of course for the Argentinian economy. He poses with a chainsaw and plans to cut half of the federal agencies. In addition, he intends to reduce ties with China, and to dispense with the severely devalued peso in favor of building a new foundation on the U.S. dollar. This last choice is not as novel as it sounds. A number of other nations, such as El Salvador and Ecuador, have done so as well. By conducting the country’s business in dollars, Milei hopes to escape the uncontrolled printing of pesos to pay national obligations, which creates runaway inflation. During the past year, Argentines have dealt with the extraordinarily destabilizing effects of a 143 percent inflation rate. In order to comprehend how difficult such high levels of inflation would be, Americans need only consider how painful we have found years in which inflation hovered closer to ten percent. Imagine that challenge magnified by a factor of 14 or 15. Fortunately, such an experience is alien to U.S. citizens.
In addition to his libertarian economic theory, Milei is an outlier in other ways, as well. He argues that the idea of man-made climate change is a myth. He has also called for a repeal of the country’s law legalizing abortion. The new president believes the public education system should be replaced with vouchers. Finally, the iconoclastic new head of state has said he is studying Judaism and plans to convert.
Milei’s election is important because Argentina is the world’s 22nd largest economy. That means that much attention will be paid to the public policy he manages to implement. Social science can’t really be conducted in a lab. Even pilot experiments in a local community can prove quite challenging. But here we will have a major country to observe. Will Milei’s strong medicine of budget cuts, privatization of public agencies, and the dollarization of the Argentinian currency prove effective?
If he is able to enact his agenda, the results could lend support to those dedicated to abandoning the financially unsustainable path the United States appears to be on as it rolls out yearly trillion-dollar deficits. The economist John Kenneth Galbraith argued that governments needed the courage to turn affluence into more public goods via greater taxation. Milei could show that relying too heavily on government spending ends up eliminating affluence or greatly reducing it.
But will this eccentric man be able to govern? Many politicians figure out the electoral code without necessarily solving the kinds of problems that persist after the campaign. As a new politician, he doesn’t have an existing party structure in place ready to mobilize as he encourages the legislature to act. What he does have, however, is a mandate. He prevailed with approximately 56 percent of the vote in a contest against the finance minister of the previous elected government. If the representatives of the people listen to the voters, they’ll give Javier Milei a chance to lead.
These daily articles have become part of my steady diet. —BarbaraSign up to receive the WORLD Opinions email newsletter each weekday for sound commentary from trusted voices.