Milei’s economic chainsaw massacre has significance far beyond Argentina

When Javier Milei first swam into the consciousness of global media, proclaiming the gospel of free markets, tousle-headed and wielding a chainsaw, he was regarded as good copy, but a libertarian eccentric of no serious political significance. Today, he is president of Argentina and he began this year by providing economically basket-case Argentina with its first monthly budget surplus in 12 years, and the first surplus for the month of January since 2011.

“Delivery”, the Holy Grail of democratic politicians, was achieved, on that front, by Milei in his first full month in office. Continuing to deliver, however, will be a mountainous task. The one asset Milei possesses is a popular mandate: he won the presidential election with 55.69 per cent of the vote, a level of public endorsement for which the Sunaks and Macrons of western Europe would give their right arms.

This, however, is not reflected in Congress, where his party La Libertad Avanza holds only 38 out of 257 seats, and just seven out of 72 seats in the Senate. With most of the parliamentary establishment wedded to the intolerable status quo – Argentina’s inflation rate reached 276 per cent last month – Milei realised from the beginning that he could not get his reforms through parliament.

Nevertheless, he tried. He went through the motions, by attempting to pass an “omnibus” bill of reforms in taxation, the penal code, election law and the party system. By watering it down considerably, he got it through the lower house, but when the Senate began to shred it even further, he withdrew it. 

Milei has decided to effect as many changes as he can by presidential decree. The Latin-American left can hardly credibly object to that, since its hero, Salvador Allende in Chile, never commanding a parliamentary majority, attempted to use presidential decrees, enforced by the murderous thugs of his quaintly-named “Groups of Personal Friends”, to turn Chile into a Marxist dictatorship.

Milei is beset on all sides. Just 45 days into his presidency, with his mandate fresh as paint, the CGT confederation of trades unions launched the fastest strike in Argentina’s history. This demonstrated contempt for the 56 per cent of the electorate who had voted Milei into office just a month before. That should be borne in mind: nobody could claim that Milei was elected on a false prospectus; throughout the election campaign he hammered home the message of his policies; once elected, he immediately attempted to implement them. People in this country, who experienced Parliament’s attempt to frustrate the popular will over Brexit, will recognise the syndrome.

Again, recognisably, activist judges declared Milei’s reform of labour laws “unconstitutional”. The president is now trying to influence lawmakers by holding provincial governors’ feet to the fire over distribution of tax revenues between the central authorities and the provinces. Governors have strong influence over parliamentarians in their province; Milei has struck at an Achilles’ heel of the establishment.

But his reforms have by no means been completely frustrated. He hit the ground running, from his inauguration onwards. “I want you to understand,” he said, within hours of his election, “that Argentina is in a critical situation. The changes our country needs are drastic. There is no room for gradualism.” This made it easy for consensus-bound Western journalists to portray Milei as Liz Truss with a chainsaw. But the reality was different, as soon became apparent.

Milei devalued the peso by 50 per cent in December; inflation then rose to a 30-year high of 254 per cent. Markets reacted favourably and some bonds rose to four-year highs. The IMF was sufficiently impressed to release $4.7bn in loans, of the $44bn Milei is seeking. He sacked 30,000 public sector workers; to Western sentimentalists that sounds brutal, until one recalls that there are 200,000 sinecurists on the public payroll in Argentina, appointed by political cronyism, with no actual work involved. Milei also cut the number of government ministries from 18 to nine, in a body blow to bureaucracy and regulation.

Unfortunately, Milei did not attempt to implement all of his programme, recognising the formidable strength of opposition. He has not abolished the central bank or dollarised the currency. He is reconciled to progressing in crablike movements, sometimes by presidential decree, sometimes by negotiation. The leftist establishment has mobilised large-scale street protests, partly to persuade foreign media that a “far-right” ideologue is demolishing workers’ rights, in pursuit of an infatuated free-market dogma.

In fact, the elephant in the room is the dogma that has paralysed and impoverished Argentina for generations: the toxic presence of Peronism, arguably the first “populist” ideology on the Latin American continent, a deadly compost of authoritarianism, personality cult, welfarism, cronyism, corruption and economic illiteracy. The provincial governors with whom Milei has locked antlers are among the chief pillars of Peronism today. It is a slightly more polished version of socialism than the undiluted Marxism prevailing in the rutted streets of Cuba and Venezuela.

In 2007, Álvaro Vargas Llosa, son of the famous Peruvian novelist and a renowned free-market crusader, wrote an article on “The Return of the Latin-American Idiot.” It was an update of a book he had written in 1999, jointly with the Colombian writer Plinio Apuleyo Mendoza and the Cuban writer Carlos Alberto Montaner, entitled “Guide to the Perfect Latin American Idiot.” It was a forensic and devastating analysis of the forces that, for much of the 20^th century, had kept Latin America, by natural resources and potential, one of the richest regions in the world, mired in poverty.

The conclusion, regarding the “Idiot” species that had ruled Latin America for too long, was: “Its beliefs – revolution, economic nationalism, hatred of the United States, faith in the government as an agent of social justice, a passion for strongman rule over the rule of law – derived, in our opinion, from an inferiority complex.”  

Vargas Llosa and his associates recognised that the Idiocracy had faltered in the early 1990s, but was being restored by such new-minted idiots as Hugo Chávez in Venezuela, followed by Evo Morales in Bolivia and Cristina Kirchner in Argentina, the toxic legacy that Milei is struggling to dispel. In Argentina, the additional problem is the existence of a unique, if contrived, national ideology, in Peronism, which managed to exercise a wider Poujadist appeal than Marxism. Milei sees it as his historical responsibility to emancipate Argentina from its past and release its potential for wealth creation. He is fighting against not only Peronism, but failed Keynesianism and Latin inertia, to abolish the status quo.

His struggle has significance far beyond Argentina. What else is Britain, under the dead hand of uni-party government and the deep state embedded in Whitehall, but another, less extreme, Argentina? When Milei presented himself at the World Economic Forum (WEF), the supposed senate of free-market capitalism, and expounded his capitalist views, he enjoyed the popularity of a wasp in a nudist colony.

In a speech that went beyond viral on the internet, Milei told the serried ranks of crony capitalists, subsidy junkies, too-big-to-fail bankers and Soros-sedated ESG and DEI addicts that constitute Davos Man: “Today, I’m here to tell you that the Western world is in danger.” Berating his audience for its “socialist agenda, which will only bring misery to the world,” Milei dared to enunciate the sentiments that once inspired Western capitalism, but which have long departed from the counsels of the WEF.

“The main leaders of the Western world have abandoned the model of freedom for different versions of what we call collectivism. We’re here to tell you that collectivist experiments are never the solution to the problems that afflict the citizens of the world – rather they are the root cause. Do believe me, no one [is] better placed than us Argentines to testify to these two points.”

Although Milei is not generally associated with culture wars, he told this assembly, whose policies had progressively reduced Western populations by disadvantaging the family and attempting to compensate with mass immigration, that abortion was “a tragedy”. Domestically, he has intervened to suppress the excesses of “trans” activism, as socially and economically destabilising.

Milei’s chief focus, though, is on the economy, pure and simple. That presents a sufficient challenge. His opponents’ tactics are transparent: to resist his reforms in Congress, in the courts and on the streets, until they can weary and intimidate the public to the extent of shaving seven or eight per cent off the support he attracted in the presidential election, to reduce his mandate and prevent a second term. They are assisted by the fact that, as in former Soviet satellite states in the 1990s, the pain of transitioning from a command economy to a market one comes long before the benefits.

The Peronists’ hope is that the initial shock of the reforms Milei manages to implement will destroy his popularity and enable them to represent him as a crank, whose wild policies have failed, so that Argentina can return to the status quo, wrap its gums around the statist teat again and resume business – or, rather, the lack of it – as before. 

Milei may just be made of stronger stuff, giving him some chance of success. Despite incumbency, he is still campaigning: recently he boarded an airliner just before take-off and shook hands with all the passengers. He recognises the need to maintain contact with his base, the Argentine electorate.

Another unexpected development may offer him an opportunity of becoming a force on the geopolitical front as well. The disturbances that have broken out this week in Cuba – the state that is the antithesis of Milei’s vision – could give him a new role on the Latin American continent. When Cuba similarly erupted in 2021, Milei, then just an aspiring politician, uttered some characteristically demotic denunciations of the Marxist regime. It is only a matter of time before the Cuban house of cards collapses, after 65 years of political terror and economic sclerosis.

If Milei were to put himself at the head of a free-market consensus to encourage the populations of Cuba and Venezuela to liberate themselves, that would give his presidency an added significance. He knows that Cuban and Venezuelan activists are among the demonstrators attempting to derail his reforms with road blocks and marches orchestrated by the CGT. It is time those two toxic totalitarian regimes, which have succeeded in creating grinding poverty even in oil-rich Venezuela, were removed.

There is a statement online attributed to Milei, condemning the Cuban regime, but it is impossible to authenticate it and it may simply be a re-run of his remarks in 2021. However, if the mission to deliver Latin America from the last, dying clutches of communism were to come from one of its leading states, rather than from Washington, that could lend an important geopolitical dimension to Milei’s presidency.

At all events, whether he succeeds or fails, Milei’s government has already secured a place in history, for at least attempting to implement the wishes of the for-too-long silent majority in Argentina and to bring the developed world back to an awareness that wealth moulders and dissipates if it is not constantly created and capitalism re-energised. He is also significant, like other recent electoral victors such as Geert Wilders, as representing the now unstoppable tide of eviction of globalist sock puppets and “hate crime” tyrants, of which Leo Varadkar, humiliated in two referenda results, is the latest victim. Milei is fighting a battle on behalf of all of us.

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