Javier Milei, the new president of Argentina, has been a vocal critic of socialism, central banks, and government intervention. He has expressed an interest in immediate change and seeks to abolish Argentina’s central bank and introduce the US dollar as the country’s dominant currency. Milei’s fiscal policy is more in the free-market direction than any other head of state in a country with 46 million residents. He has admired the work of Murray Rothbard, F.A. Hayek, and other centrist economists. Milei self-identifies as a supporter of the Austrian School of Economics.
If Milei remains committed to reining in or abolishing the central bank, lowering taxes, and cutting government spending, he has the opportunity to push through real economic reforms that could provide relief to the beleaguered Argentinian middle class. Many libertarian supporters of Milei have responded with celebratory enthusiasm, with some assuming that his election will translate into actual implementation of his stated policies. However, the hard part has only begun. Milei may be sincere in his stated goals and apparent commitment to radical opposition against the disastrous status quo in Argentina. However, after Milei’s election comes the real test, as he may be unwilling to carry out such policies if they prove unpopular.
Milei, a potential president, may lack the political skills necessary to harness and exploit the existing free-market sentiment in the country. To push through any reforms, Milei must convince a significant portion of the voting public that his policies will work or are working. This doesn’t necessarily mean a majority must be enthusiastic with him at all times, but he must use public opinion to pressure the legislature and powerful interest groups.
In democratic countries, even dictators face opposition from entrenched interests. The reforms proposed by Milei, a skilled politician, may hurt interest groups that have benefited from inflation and high government spending. The productive class may suffer, while millions of politically active voters believe they benefit from Peronist-style economic policy. Those who believe they stand to lose from reform will resist. Suppose Milei and his supporters lose the battle of ideas. In that case, they may face criticism from the media, economists, and the public, who will argue that Milei is hurting ordinary people, destroying the economy, or threatening democracy.
These tactics are especially dangerous in the short term, as cuts in government spending and an end to easy monetary policy tend to pop financial bubbles and drive government-dependent industries into decline. If the public can’t be convinced that this pain will lead to better days ahead, the public is likely to abandon Milei and his policies in short order.
The battle of ideas in academia, media, and the public is crucial for free-market reformers to succeed. Intellectuals, activists, columnists, and speakers must constantly recapitulate the truth about freedom, free markets, and peace. As long as a significant portion of the public believes the Peronists “get it right,” no free-market reformer can win. The only reason people quote Austrian School economists or appreciate the wisdom of free-market classical liberals is because they learned those ideas from a teacher, publication, or organization.
These battles of ideas provide the foundation for political movements that build upon these ideas. However, these movements can only succeed if the public learns why fiat money is bad, state power is a problem, and high taxes are disastrous. The public must believe in freedom and free markets as good things.
It remains to be seen if the voting public is willing to give Milei a chance to try beyond the short term. Much of this depends on whether Argentine libertarians have managed to preserve or advance some lingering measure of pro-liberty sentiment. If not, Milei will fail politically, regardless of his political skills. Free-market activists and intellectuals must continue the fight until the political situation again favours a viable free-market candidate.
