19th November 2023 marked a big day for the free-market movement. For the first time, a libertarian president was elected to the highest public office. But who is the guy that the global left has been losing their mind over for the last weeks? What are the proposed policies of this person who is being smeared by the leftist-dominated media in its typical meta-reporting fashion (no substance or logical argument, just name-calling and emotion-stirring)? The framing includes terms such as populist, far-right, reactionary, nutcase, “Trump of the Pampas”, and many more unfitting descriptions – the irony of the inherent repugnancy of some of these words shall not be lost on the careful reader. But what led to an utterly surprising victory the projection of which two years ago would have led the most respectable pollster to be committed to an insane asylum?
Who is the designated Argentine president and landslide election winner Javier Milei?
To understand the astronomical rise, it is worthwhile to take a step back and look at the conditions that enabled it. After all, historical outliers are commonly associated with rare political, economic, or strategic constellations. A look at the recent Argentine history merits our expectations.
Going back to the beginnings of modern Argentina, particularly 1885, the country lacks any signs of economic weakness. The opposite is true. Blessed with a wealth of natural resources such as oil, gas and lithium, the country consistently ranked among the top 10 countries by GDP per capita for more than 60 years up to ca. 1945.
Position in GDP/Capita Ranking (Maddison Project)
The end of WW2, however, marks the beginning of the slow but accelerating decline of (relative) economic strength through leaders infringing on civil and especially economic freedoms and bloating the government. Firstly, the infamous socialist Juan Perón took over for nearly ten years. The subsequent years saw a period dominated by military dictators battling for the reign of the country until 1983. The establishment of democracy in 1983, however, did not change the situation for good. Since then, socially left-wing, and socially right-wing parties with a shared love for big government spending orgies have further been undermining the Argentine economy and its markets.
This finally leads us to the observation of Argentina’s most recent history representing its most hideous chapter. What paved the way for Javier Milei’s utterly surprising victory was the ongoing and accelerating lack of fiscal responsibility paired with massive corruption. While Argentina’s ninth default (yes, you read that number correctly!) further weakened the economy, a mega-scandal concerning the current Vice President and former two-term President Cristina Fernández de Kirchner eventually eroded the last piece of trust in the political class. Kirchner was sentenced to six years in prison and a lifelong ban on holding public office on the charges of corruption and abuse of power; nevertheless, she remained in office even after the verdict. Meanwhile, the population is shouldering the burden of a 10-year average annual inflation rate of 38.8% (2013-2022), with this year’s rate very likely to top 100%.
Position in Global Corruption Index 1995 - 2022 (Transparency International)
Annual Inflation Rate 2013 - 2022 (INDEC Argentina)
Inflation Rate by Month September 2022 - October 2023 (Statista)
Overall, the situation can only be described as preposterous. A country blessed with natural resources and an early economic powerhouse deteriorates through out-of-hand stimuli, price controls, extensive money printing, and other economic “experiments”. Consequences such as those mentioned above can be foreseen by logical reasoning and history. Yet, the current socio-political environment paired with the reassuring figments of the left-wing economic elite disguises those properties and draws a blurred picture at best, and a fake picture at worst. Thus, the average voter’s first response to dire situations is to believe the overwhelming rhetoric of suddenly-turned-greedy entrepreneurs, big oil conspiracies, or akin fairytales and scream at the government for help.
But as we have known long before (allegedly) Einstein: “The definition of insanity is doing the same thing over and over again and expecting different results.” After some 80 years of decline, the Argentines have finally come to the right conclusions. Rainer Zitelmann’s capitalism attitude ranking shows Argentina as number 8 out of 35 states, indicating an unexpectedly positive attitude. More surprisingly, the libertarian movement is growing rapidly among adolescents. Javier Milei won the majority of the young vote (under 30) even in the first round of elections. These developments led to the president-elect winning the largest majority (56% - 44%) since the return to democracy in 1983, without being a member of the (previously) dominant parties.
Naturally, this raises a pressing question for both the Old and the New World. Does the situation have to become as dire for the populace to realize that more socialism, central planning, and government spending is not the antidote to the perceived nausea but the poison slowly rotting the (once) strong body from within? A question the citizens will have to answer…
“Socialism in general has a record of failure so blatant that only an intellectual could ignore or evade it.” – Thomas Sowell