March 15, 2024   6 mins

Javier Milei, Argentina’s self-styled “anarcho-capitalist” president, enjoys an almost Christ-like status among heterodox conservatives and MAGA-style Right-wingers, almost on a par with Trump himself. Like lovestruck teenagers, a certain type of conservative drools over Milei’s over-the-top mannerisms and “based” speeches against “libtards” and “communists”.

There is, however, a problem: aside from his questionable hairstyle and swamp-draining rhetoric, Milei actually has very little in common with Trump. For all his faults, Trump stood on a platform that rejected the neoliberal orthodoxy that had defined the Republican Party ever since the Reagan era. Trump’s agenda, by contrast, was markedly anti-libertarian: he advocated economic nationalism and protectionism, lambasted globalisation, promised to protect social welfare programmes, vowed to support local industries, and even courted the labour movement.

Though he didn’t deliver on all those fronts, Trumpism, like analogue national-conservative movements in Europe, encapsulated an intuitive understanding that the values cherished by conservatives — family, community, religion, solidarity — can only flourish in a context where the state intervenes to restrain the socially destructive effects of unfettered capitalism. Trump’s former US Trade Representative Robert Lighthizer captured the new conservative zeitgeist when he said that libertarianism is “a philosophy for stupid people”.

In this regard, as Sohrab Ahmari has noted, Milei represents a rejection of “nearly everything ‘MAGA’ populists… claim to stand for”. Milei is a self-described ultra-libertarian and pro-market extremist who has vowed to “liberalise and privatise everything” (including organ transplants), slash welfare programmes, gut workers’ rights and permanently shackle the Argentine economy to the Federal Reserve by abolishing the Central Bank of Argentina and adopting the US dollar as the national currency. “The state is not the solution. The state is the problem itself,” Milei said at the latest WEF summit, echoing Reagan’s famous inaugural address.

And yet, his agenda doesn’t so much resemble the Western neoliberalism of Reagan and Thatcher as the much more extreme neoliberal regimes implemented in the Seventies and Eighties by the US-backed military juntas that ruled much of Latin America at the time. Even Milei’s rhetoric seems to be plucked straight out of the Eighties playbook: he claims to be on a holy crusade against “communism”, which he accuses of being the root of all Argentina’s, and indeed the West’s, ills.

Of those ills, none is of greater concern to ordinary Argentines than inflation — or rather, hyperinflation. The country has been suffering from soaring prices for years. By the time of last year’s presidential election, the rate of inflation had reached a staggering 150%. No wonder Milei’s anti-elite rhetoric and promises to take a sledgehammer to the economy resonated with so many Argentines. Unfortunately, however, Milei’s slash-and-burn policies will only make a bad situation worse.

While Milei has only been in power for a few months, the consequences of his scorched-earth economic approach are already being felt. His first decision was to devalue the Argentine peso by 50% — part of an “economic shock therapy” that he claimed was necessary to fix the country’s problems. Yet, as was to be expected, the drastic devaluation of the peso has only caused inflation to skyrocket even further, almost doubling to 250% since Milei took office in December. Since then, the price of gas has doubled, while food prices and healthcare costs have risen by roughly 50%, according to official government data. Meanwhile, salaries and pensions have failed to keep up, leading to the largest contraction in workers’ purchasing power in decades.

To make matters worse, Milei has stayed true to his promise of taking a metaphorical “chainsaw” to public spending, slashing subsidies in a wide range of sectors, from transport to utilities — on top of shutting down half of the country’s ministries. For ordinary citizens, the effects have been devastating. According to a recent study by the Catholic University of Argentina, poverty levels have risen to 57% — the highest level in 20 years, and an almost 10% increase since the end of last year, when Milei took over.

“Milei has stayed true to his promise of taking a metaphorical “chainsaw” to public spending.”

Milei says this is a necessary pain the country must endure before things get better. But there’s no evidence for this. If anything, the worst is likely yet to come, considering that Milei’s drastic fiscal austerity will probably lead to a further economic contraction amid already-floundering growth. No wonder the IMF has already slashed Argentina’s GDP forecast for 2024.

So why, Milei’s defenders might weigh in, does a recent poll show that a majority of Argentines continue to support him? Because, as the Argentine journalist Lautaro Grinspan explains, Milei “has placed responsibility for households’ mounting economic difficulties on his ‘inheritance’ from Peronist predecessors, and the blame game seems to be working”. But for how long? After all, resistance is already mounting, with workers going on strike in several sectors and anti-Milei mobilisations filling the streets. If his policies don’t start to deliver results soon, Milei could find himself with a full-blown social uprising on his hands, similar to the one that shook the country in 2001.

Faced with such disorder, Milei has already started to crack down on the right to protest — including proposals to identify protestors and then bill them for the cost of mobilising security forces and even remove them from welfare support lists. Some fear even harsher forms of repression. According to one lawmaker in Milei’s coalition, protestors should be dealt with with either “prison or bullets”.

More than anything, the threat served as a telling reminder that while neoliberals like Milei often claim to be libertarian and anti-statist, in practice neoliberalism requires powerful, even authoritarian, state apparatuses to impose its logic on society — and stifle any challenge to the dominant order. It’s no coincidence that the extreme free-market experiments pursued in Latin America in the late 20th century relied on extensive state terror. Nor is it surprising that Milei has repeatedly sought to downplay the crimes of the military junta that ruled Argentina between 1976 and 1983, and which was responsible for the death and “disappearance” of an estimated 30,000 people — though it certainly calls into question the president’s commitment to “freedom”.

Moreover, contrary to Milei’s claims, many of the economic problems faced by Argentina can be traced back to the legacy of those policies — not to “communism” or statism. Even after the end of the military rule, several Argentine governments experimented with “pro-market” neoliberal policies. Under Carlos Menem, who ruled from 1989 to 1999, Argentina “flexibilised” the labour market, deregulated virtually every sector of the economy, privatised several state-owned companies, liberalised international trade, pegged the peso to the dollar, and took on large amounts of dollar-denominated debt. Those policies dealt a serious blow to the country’s competitiveness, eventually resulting in a deep recession that the government was unable to overcome. The experiment ended catastrophically with the financial collapse of 2001.

This was followed by a decade-long economic recovery and boom, buoyed by strongly redistributive policies. The subsequent slowdown led the conservative Mauricio Macri to attempt to rekindle the economy by once again embracing market-oriented reforms — and taking on more dollar-denominated debt. When the country’s foreign-debt obligations ballooned to unsustainable levels and the peso collapsed against the US dollar in 2018, Macri made the questionable decision to take another $50 billion loan from the IMF — its largest-ever credit package.

To make matters more precarious, in recent years, the economic impact of the pandemic, the rise in commodity prices and then the Federal Reserve’s post-pandemic interest rate hikes have all contributed to the massive inflationary surge. Thus we can see that Argentina’s problems aren’t rooted solely in “excessive government spending” and “money printing” — in fact, Argentina’s fiscal balance was actually in line with the regional average throughout the decade to 2022, and last year was smaller than the US’s — but more specifically in the country’s over-reliance on dollar-denominated debt and an outward-oriented development model. It goes without saying that further tying the Argentine economy to the American one by going for full-blown dollarisation would only make things worse. It would mean fully submitting Argentina to American monetary governance — though it would, of course, once again make the country “safe” for global capital.

But if this is true, why are so many MAGA-conservatives attracted to Milei? It’s partly down to the growing importance of culture-war issues in the formation of people’s political outlook: Milei’s non-conformist stance on issues such as vaccines and climate change automatically makes him “based” regardless of what his economic policies may be.

In more strictly political-economic terms, however, it shows that conservatives, particularly in the US, still very much live in the shadow of Reaganism: they adhere to a cartoonish form of libertarianism, where the state is the source of all evil and oppression, while the self-regulating market — or “true capitalism” — is framed as a promised land capable of delivering freedom and prosperity.

This is tragically naïve. For all the problems of government overreach that we face today, and its threat to human freedom and autonomy, conservatives would do well to reflect on the fact that the alternative — subordinating social life to the logic of the market — leads to equally toxic outcomes: it breaks down social and communitarian bonds, weakens forms of collective identity, and breeds atomised and alienated individuals. In this sense, it’s not an alternative at all; it’s the world we already live in, one in which authoritarian states coexist with equally authoritarian, socially destructive market-based logics. By contrast, as Karl Polanyi observed, the true “conservative” alternative consists in “embedding” the economy in society, in subordinating it to its citizens’ material needs, beliefs, values, customs and traditions — in other words, the opposite of Milei’s authoritarian libertarianism.

Thomas Fazi is an UnHerd columnist and translator. His latest book is The Covid Consensus, co-authored with Toby Green.