A libertarian just won Argentina's presidency... what's going on?
November 21st, 2023
If you're wondering how the heck a hardline libertarian just won the Argentinian presidential election, here's some background.
First, a key fact is that the government is printing money at an accelerating rate, resulting in 143% annual inflation as of the most recent count. The economy is deteriorating rapidly, the poverty rate has spiked to more than 40%, and the daily indignities of Argentina's topsy turvy monetary policy are mounting. If you ask an Argentinian, it's a question of when hyperinflation will kick in, not if.
Second, the race came down to two candidates:
- Sergio Massa: Current Minister of Economy, in charge of the state treasury. (Yes, he's the head guy overseeing the economy just as the government prints all of those increasingly worthless pesos!)
- Javier Milei: A political outsider with hardline libertarian beliefs who wants to dramatically reduce the scope of government and is seen as a loose canon for his eccentric personal beliefs.
Milei's radical platform included plans to:
- Dollarize the economy, i.e. adopt the US dollar as the country's currency so that leaders like Massa can't just keep printing money. This is like Argentina tying itself to the proverbial mast.
- Cut a huge portion of the government to curb rampant corruption and patronage. An astonishing 55%* of workers registered in Argentina work for the government and directly benefit from increased government spending, so this will be extremely unpopular. (*The 55% number is a bit misleading because a lot of Argentina's economic activity is in the informal sector, so a huge portion of the workforce is not registered.)
Massa represents the incumbent establishment:
- Massa identifies as a Peronist, the same party as the current sitting president, Alberto Fernández. Many Argentinians think that Massa has been the top dog leading the government since Fernández's popularity waned dramatically in the past few years. (Fernández decided not to run again even though he's only in his first term.)
- Practically this means that electing Massa would have meant more of the same. He would have continued solving political problems by handing out subsidies/jobs and solving the resulting fiscal shortfalls by printing more pesos.
In short, this was an election between continuity vs change. Few predicted that Milei would win because he is... quirky, to say the least. All you need to do is watch some of his YouTube videos to see that he's a bit unhinged. Sure, Massa is associated with the country's current economic woes, but people thought "at least he's a known quantity and has experience in politics".
But to everyone's surprise, Milei won in a landslide victory! Here's Milei's victory speech laying out his vision. His 12 point lead made it clear that Argentinians are angry – so angry that they're willing to accept abrupt, extreme changes in hopes that it gets the country on a better path.
I guess once you frame the choice as "vote for (a) the current Minister of Economy who's actively guiding Argentina towards hyperinflation or (b) a guy who thinks that's a bad idea", it sounds insane that Massa was even considered a reasonable candidate, let alone a top contender! And yet he still got 44% of the vote...
Don't get me wrong, I have my reservations about Milei. I disagree with him on some key issues, and his temperament may create more problems than it solves. But I think he has the right ideas for most pressing issues Argentina is facing (namely economic ones), and I'm happy that someone is finally pointing out that the emperor has no clothes and trying to change it, rather than simply continuing down the same path that got Argentina into this mess in the first place.
No one knows if Milei has what it takes to achieve the goals he's set out for the country. He's good at capturing attention, but is he good at leading? He lacks experience pushing policies through, and Argentinians have a tendency to ignore and resist changes from a centralized authority, so we'll see how far he gets.
But this is at least a good first step. I'm happy to see Argentinians sending a clear message that the current leaders who are leading the country further down a path of ruin that they do not have popular support. I'm cautiously optimistic that this could be a turning point in the country's history. Argentina is a wonderful place and deserves better. Viva la libertad, carajo!
Keep in touch!