There’s something happening here. What it is, ain’t exactly clear.
Around the world, there is growing impatience with the orthodoxies and condescension of the progressive left. In the past two years, right-leaning parties have outperformed electoral expectations in Belgium, France, Germany, Italy, the Netherlands, and Portugal, and countries such as Hungary, Poland, and — again — the US.
But the country with the most happening, and the least clarity, is almost certainly Argentina. Just over a year ago, Javier Milei won the presidency in what may be the most “out of nowhere” election ever. It is tempting to lump Milei’s success in with the general electoral tilt to the right, but that’s not correct; Milei is different. As a podcast produced by The Economist, put it: “Milei is above all a zealous believer in free-market economics. That is his absolute guiding understanding.”
This zeal has taken a narrow view of economic orthodoxy, with academic dissenters labeled “econochantas,” Milei’s portmanteau neologism combining “economist” with “fake shaman” or boastful fraud. And he has acted on these beliefs, in ways that are unusual for elected officials. When he was a member of the Argentine House of Representatives, he announced that since his monthly salary was taken from taxpayers and therefore “stolen,” he would raffle it off.
Incredibly, Milei’s central campaign goals, and his actual actions in his first year in office, included two things none of the other leaders have even said, much less actually done. The first is to cut spending; the second is to reduce state meddling in the determination of prices.
Consider what Milei has done in his first year:
Cut the number of cabinet departments from 18 to 8
Suspended public works other than the absolute essentials
Cut salaries and salaries for remaining public jobs
Held down rate of increase of pensions, lower than the rate of inflation, cutting government pensions in real terms
Delivered a series of budget surpluses, month on month, and ended 2024 with a fiscal surplus, for the first time in more than a decade
Overseen a sharp reduction in inflation
Increased national reserves of foreign currency, including dollars
Forced substantial reduction in regulations and requirements for permits for travel, apartment rentals, and new construction
Cut public spending by more than 30 percent
Milei’s campaign prop was a “motosierra” (chainsaw), and his constant threat to government programs was “afuera!” or “out with it!” He often shouted, “se viene la motosierra profunda,” announcing the coming of “deep” cuts in spending.
The media consensus was that his heavy-handed cuts would create a catastrophic recession, followed by a storm of political unrest. But things were so bad in Argentina for the past decade that even some of his detractors would now admit that change was needed.
Milei’s popularity has rebounded, after some initial bumps. In the past two months, it has actually risen, putting paid to the notion that Argentines are unwilling to suffer short term pain for longer-term prosperity. While there was a recession for much of 2024, the fourth quarter saw growth, and the economy is expected to grow by five percent or more in 2025, just the kind of prosperity that had been promised. And there is a good chance of foreign investment, reflected in the reaction of the JP Morgan “country risk index,” which has fallen from 2000 (“keep out!”) to 750 (“welcome!”).
But there are two other aspects to Milei’s program, and to his success, that have not been noticed, or at least that have not been much commented on. The first has been the aggressive, and largely successful, restoration of order and protection of property rights by the police and military.
Before his election, many parts of the country, including “narco” hot spots such as Rosario, were lawless, anarchic enclaves of gang violence and street crime. And the cities were frequently shut down, for hours or even days, by “picquetes,” a uniquely Argentine word for “pickets,” or lines of protesters demanding some sort of government payoff or special benefit. The narcos, and the picqueteros, had effectively broken down commerce and property rights nationwide.
Thus, far from bringing anarchy, Milei ended it. Crime rates, and the number of murders, have fallen by more than 50 percent, with the biggest increases in the areas that the previous administration had largely given up on. Patricia Bullrich, an erstwhile Milei rival, was appointed to the position of Director of the Ministry of Security. She immediately announced: “We are going to bring order to the country so that people can live in peace. The streets will not be taken. Let them [picqueteros] know that if the streets are taken, there will be consequences.”
The other aspect of Milei’s program has been putting an end to the anarchy that had characterized Argentinian economic and industrial policy. FA Hayek’s Road to Serfdom famously argued that the problem with central planning and price controls — which is what Hayek meant by the generic term “socialism” — lead to a cascade of regulations that fix the distortions caused by the previous round of regulations that fixed distortions of the original policies. Trying to achieve social goals by managing prices blocks the information function of a freely adjusting market system, and leads to gross inefficiencies and shortages.
Milei has a wonderfully descriptive name for his policies in this area: “Sinceramiento los precios relativos,” or “make the prices accurate (sincere).” Calling prices “sincere” is a genius move, because it gives a human face to the otherwise impersonal action of markets in signaling scarcity. This innovation has allowed Milei to claim (rightly) that the price of housing and some foods had been artificially low under previous governments, and that allowing prices to find their market level would solve the chronic shortages people had suffered. Though there were objections, and attempts at protests (thwarted by the crackdown on picqeteros; see above!), about this increase in “inflation,” Milei has been able to defend his policies as simply being necessary changes in relative prices (precios relativos) rather than actual monetary inflation.
Unsurprisingly, the promise of sincere prices has spurred a housing boom, with both new units being built and a large number of rental units that had been locked down under price controls rejoining the market. The bottom line is that, a year into his presidency, Milei has outperformed any reasonable expectations, except perhaps his own. It is worth watching him in action, and delivering his signature line, “Viva la libertad, carajo!” If I were translating that for my mother, I’d say it meant, “Long live liberty, gosh darn it!” No other world leader is even saying that. Miei actually means it.
