My intense support for Javier Milei is not because I care deeply about Argentina (though it is a very nice country and I want it to prosper). Instead, as I explain in this one-minute clip, I’m mostly hoping Milei’s economic and political success will encourage other governments to copy his policies.
I especially want some Milei copy-cats to emerge in the United States, where we desperately need the kind of spending restraint that Argentina is now enjoying (and it also would be nice to have some leaders who understand and appreciate the benefits of free trade!).
In my fantasy scenario, Milei triggers a global renewal of pro-market reforms, much as we saw a few decades ago when Reagan and Thatcher helped usher in an era known as the “Washington Consensus.”
The good news, building on what I wrote last week, is that Milei-ism is attracting more and more attention. Here are some excerpts from an article in the U.K.-based Economist.
Mr Milei’s spending cuts are perhaps the deepest and fastest ever imposed on a country through broad democratic consent. When he won the presidency, promising intense austerity, voters had not yet felt his chainsaw. Now they have… And yet the voters have backed him again….This matters beyond the Rio de la Plata. Many rich-world governments are struggling with fiscal deficits and soaring debt. Their problems are not at Argentine levels, but rich-country leaders can still learn from Mr Milei. His success shows the power of tough-but-coherent economic messages that are proclaimed with clarity and conviction. …The president now has a welcome opportunity to launch a second tranche of reforms. …Liberalising labour markets and simplifying the tax system would be a good start. This would reinforce the financial reforms, boosting the economy and Mr Milei’s popularity, paving the way to dealing with tougher policies like pension reform. …Mr Milei has a chance to improve Argentina in a way that will last long after he leaves office, by transforming the terms of political debate. …his journey already holds lessons for the world—and it may soon offer more.
One of the reasons I’m citing an article in the Economist is that it is not a libertarian publication. Indeed, I think it leans a bit to the left (see here, here, and here).
In any event, it’s definitely an establishment outlet, so it’s noteworthy that even it is observing that Milei’s libertarian revolution “holds lessons for the world.”
Another establishment outlet is Project Syndicate. It’s a good site to visit for wonks who care about both domestic and international economic policy and it publishes articles I don’t like (see here, here, and here) and articles I do like (here, here, and here).
Interestingly, it just published an article by Nouriel Roubini, who has a very establishment pedigree (Clinton Administration, Wall Street, IMF, etc). Yet he has an article that makes many of the same points I’ve made.
Breaking from the pattern of past failed economic-stabilization episodes…Argentine President Javier Milei used his 2023 election victory to implement the strongest fiscal-austerity and structural-reform policies in the country’s history. In 2024, the primary fiscal adjustment (excluding interest payments) amounted to 5% of GDP, setting the stage for a strong economic rebound… Now, for the first time in ages, Argentina may escape the policies that have repeatedly driven it into debt defaults and high inflation. After the most recent Peronist administration had pushed the country close to an inflation spiral and another default, Milei started cleaning up the mess with ruthless efficiency. While many have criticized his draconian approach, the results of the October election show that the Argentine people would prefer short-term economic pain over a return to Peronist policies. Milei will now…continue his program via legislation, rather than decrees, starting with labor-market and tax reforms. Further economic liberalization will then attract a surge of domestic and foreign investment, ensuring strong economic growth for the future. …The market reaction to the October election confirms that investors are on board with Milei’s strategy. The panic leading up to election day was not about him, but about the prospect of a Peronist return. With the recent electoral uncertainty behind it, Argentina now has a clear path to political stability. We will likely see significant inflows of FDI, allowing growth to accelerate over time. Argentina may even become a model for the kind of market-oriented economic reforms and fiscal austerity measures that are needed in other Latin American economies, such as Chile, Brazil, and Colombia – all of which will hold elections in the coming years.
For purposes of today’s column, the part I like is when he wrote “Argentina may even become a role model.”
Let’s hope so. And not just that Argentina may be a role model for Chile, Brazil, and Colombia.
Of course, I’m mostly focused on Milei being a role model for the United States. Surely there are some Republicans (and maybe a few Democrats) who will be emboldened to do what’s right, especially since Milei has confirmed my Fourth Theorem of Government.
